One in four of the 80,000 callers to the Pensions Advisory Service last year were signposted to advice, but that the service would never given a definitive course of action, TPAS chief executive Michelle Cracknell told delegates at the CA Summit.
TPAS staff deal with the remainder of the calls by explaining the difference between execution only and self serving, helping them use online retirement tools, providing information and mediation.
The reason for calls ranged from at retirement queries (15 per cent) triggered by ‘wake up packs,’ to questions about tax free cash, expats and concerns that the perceived cost of advice is too high.
Calls to the service trebled at the time of the March budget. A large number of callers were annoyed that their pension scheme had not changed the scheme rules to enable them to use the new pension freedoms announced in the budget. Many callers had not registered that cash withdrawn from pensions will be taxable.
Cracknell said: “Our biggest fear is that the default behaviour is for people to take cash, put it in the bank without a plan and the money evaporates.” Another was that people would shun annuities and enter drawdown without understanding it.
In response to a question from Steve Herbert on what people would get out of guidance, Cracknell said TPAS has put proposals to the Treasury for callers to receive an output document summarising the conversation they had.
An announcement on face-to-face guidance would be made shortly, she said. The Treasury was also trying to gauge the likely take up rate and preferred channels for guidance.
Cracknell urged advisers needed to work with TPAS. “Too many people are reaching retirement with no advice at all.”