The brand for the guidance guarantee has been unveiled as ‘Pension wise’, under the strapline ‘Pension wise - your money your choice’.
The Treasury says it aims to build Pension wise into a strong, distinctive, trusted national brand.
Government older persons champion Ros Altmann used the launch to call for greater obligations on providers to ensure retirees take advantage of the survey, arguing without stricter rules there would be a repeat of the failures of the open market option. She also criticised the FCA’s failure to have a pension passport in place ahead of the introduction of the new flexibilities from April 2015.
Altmann also says Pension wise should highlight the value of paid-for advice and explain how buying direct can have hidden costs, such as annuity commission.
Treasury economic secretary Andrea Leadsom says: “Pension wise will be a first port of call for people with a defined contribution pension who are approaching retirement. It is a distinctive brand, making it easy for consumers to know where to go for help and guidance.”
Altmann says: “The FCA is still not forcing pension companies to issue standardised pension statements, so that customers will have the vital information about their pension that they’d need to get the most from their ‘Pension wise’ guidance session. Apparently, the pensions industry is working on this, but action is long overdue.
“Pension wise can highlight the value of paid-for advice – route planners, timetables, maps or apps to reach your destination, but not a limousine service:
“Pension wise’ should also explain the hidden commission costs and charges of buying without advice: The Pension wise guidance needs to help people understand the relative costs of advice vs. buying direct. At the moment, most people do not realise that buying an annuity direct from their pension company still costs them money as the provider deducts commission – around 1.5 per cent of their fund – when they sell you an annuity. On a £30,000 fund, a pension provider could take £500 without ensuring you are buying a suitable product, whereas with an adviser you will be paying for help to do the right thing. The whole issue of hidden commissions that customers pay, which can cost more than paying an upfront advice fee, needs to be explained.”