Accessing your pension for the first time? Pension Wise guidance is now a requirement

MSE_Clare

From 1 June, if you're accessing or transferring your pension for the first time, you'll need to be offered a free Pension Wise appointment. Read our news story here.

We'd love to know your experiences with this free impartial Government service, and what your thoughts are on getting guidance (from Pension Wise or otherwise) when accessing your pension for the first time.

allsort

I am leaving my employment later this month, at the end of a very longstanding contract.  I'm still undecided about whether I will or won't work again but am preparing as though I am retiring.  I have a combination of DB and DC pension and had an appointment with a Pension Wise advisor about six months ago, mainly out of curiosity and because it seemed like a sensible thing to do.

Whilst the advisor was very enthusiastic, she delivered her advice to a set script and I found this appointment fairly valueless for me because I'm planning on drawdown and didn't learn anything I that I hadn't already learned by reading MSE's pension forum.  I suppose I had thought it might be like having a meeting with an IFA but it wasn't.  The advisor is unable to discuss how to sequence DC with DB pensions and the meeting is highly generalised and not tailored in any way to individual circumstances.

I feel it might be a helpful service, however, for anybody who doesn't routinely inform themselves about pension access options through online research..

dunstonh

Accessing your pension for the first time? Pension Wise guidance is now a requirement

That is not correct.      Pensionwise must be offered but it not a requirement for the individual to use it.

We'd love to know your experiences with this free impartial Government service, and what your thoughts are on getting guidance (from Pension Wise or otherwise) when accessing your pension for the first time.

In my experience, where I have seen new clients that have had a pensionwise appointment and then look for an IFA, they have come to use with pre-conceived ideas of what they want to do only to end up with a solution that was different.

This is not because pensionwise are doing anything wrong.  It is just that it is focused on generic options rather than suitability.  

Dazed_and_C0nfused

From 1 June, if you're accessing or transferring your pension for the first time, you'll need to be offered a free Pension Wise appointment

It only relates to DC schemes so the opening statement is misleading.

Albermarle

allsort said:

I am leaving my employment later this month, at the end of a very longstanding contract.  I'm still undecided about whether I will or won't work again but am preparing as though I am retiring.  I have a combination of DB and DC pension and had an appointment with a Pension Wise advisor about six months ago, mainly out of curiosity and because it seemed like a sensible thing to do.

Whilst the advisor was very enthusiastic, she delivered her advice to a set script and I found this appointment fairly valueless for me because I'm planning on drawdown and didn't learn anything I that I hadn't already learned by reading MSE's pension forum.  I suppose I had thought it might be like having a meeting with an IFA but it wasn't.  The advisor is unable to discuss how to sequence DC with DB pensions and the meeting is highly generalised and not tailored in any way to individual circumstances.

I feel it might be a helpful service, however, for anybody who doesn't routinely inform themselves about pension access options through online research..

They can not offer any kind of personalised advice.  . An IFA will ask you lots of questions about you, your situation and all personal details of your finances ( not just pensions) before offering any actual financial advice. Just this fact gathering will take a lot longer than the hour you get with PensionWise.

As a regular reader of this forum, it probably means you already know more about pensions than more than 90% of the population. The Pensionwise interview is really aimed at this 90%, to try and make sure they have at least some understanding of what they are doing and the implications. As you say is probably helpful in this respect.

Many pension providers will not let you access a DC pension anyway, without going through a long conversation regarding all the possibilities and implications, especially about the possibility of running out of money too early. In this case not sure a Pension Wise chat would add anything . Maybe it is because some providers skim over this part rather quickly, or just require you to tick a few boxes to cover them?

Malthusian

Albermarle said:

Many pension providers will not let you access a DC pension anyway, without going through a long conversation regarding all the possibilities and implications, especially about the possibility of running out of money too early. In this case not sure a Pension Wise chat would add anything . Maybe it is because some providers skim over this part rather quickly, or just require you to tick a few boxes to cover them?

The Pension Wise appointment will surely replace that long conversation, otherwise some consumers are going to be rightly annoyed at being made to jump through the same hoop twice.

The secondary purpose of the "yeah... yeah... yeah..." checklist is to protect pension companies, not consumers. It is to guard them against complaints along the lines of "I shouldn't have been allowed to take all my money out" or "I should have been warned." (Its primary purpose is to protect George Osborne.)

Replacing conversations with pension companies with a single PensionWise one standardises their approach and protects them against the possibility that some of them might be "skimming over it too quickly" compared to the others.

As Dunstonh said the headline is inaccurate.

This is an even more serious inaccuracy:

You don’t have to wait for your pension provider to tell you about this service though, you can book an appointment yourself, as long as you’re over 50 - though bear in mind you'll be heavily taxed if you take anything out of your pension before you're 55.

Leaving aside ill-health retirement and protected early retirement ages, you cannot take anything out of a pension before 55. Tax doesn't come into it. 

There is a recurring myth that because there are penal unauthorised payment charges for illegally paying out pension money before 55 (and scheme sanction charges, and de-registration charges), you can take money out of a pension before 55 if you are willing to pay a 55% tax. This is false and a myth peddled by scammers.

It is the same mistake as the sentence "you can park on double yellow lines if you're willing to pay £80".

No legitimate pension scheme will let you take out money before 55 (unless the exceptions mentioned above apply).

cfw1994

I used them a couple of years back prior to my retirement.

Pretty basic, I would say - I think regulars on this forum will likely know at least as much than the person they speak with, but they were able to confirm things I thought I understood, so handy in that regard. 
It didn't feel like an hour completely wasted (unlike the 2.5hr afternoon 'cake & tea' seminar we had with a local well-regarded and award-winning IFA firm later on....we really did learn nothing from their presentation, but at least the tea was lovely 🤣)

As mentioned above, they are not able to offer any advice, but are able to clarify options that could be available.
& as always, it might depend who you speak with - they are not robots, but humans 🤷‍♂️

Albermarle

The Pension Wise appointment will surely replace that long conversation, otherwise some consumers are going to be rightly annoyed at being made to jump through the same hoop twice.

The secondary purpose of the "yeah... yeah... yeah..." checklist is to protect pension companies, not consumers. It is to guard them against complaints along the lines of "I shouldn't have been allowed to take all my money out" or "I should have been warned." (Its primary purpose is to protect George Osborne.)

Replacing conversations with pension companies with a single PensionWise one standardises their approach and protects them against the possibility that some of them might be "skimming over it too quickly" compared to the others.

One advantage of the 'chat' with the pensions provider, is that you can go into the nitty gritty of how their system works. For example do they keep crystallised and uncrystallised pots separate? Do they offer full flexible drawdown?, or is it restricted?, does the client have to sell to cash each month before a certain date for regular withdrawals etc.
All these providers seem to have their own ways of doing things, when it comes to withdrawals. 

L9XSS

allsort said:

I am leaving my employment later this month, at the end of a very longstanding contract.  I'm still undecided about whether I will or won't work again but am preparing as though I am retiring.  I have a combination of DB and DC pension and had an appointment with a Pension Wise advisor about six months ago, mainly out of curiosity and because it seemed like a sensible thing to do.

Whilst the advisor was very enthusiastic, she delivered her advice to a set script and I found this appointment fairly valueless for me because I'm planning on drawdown and didn't learn anything I that I hadn't already learned by reading MSE's pension forum.  I suppose I had thought it might be like having a meeting with an IFA but it wasn't.  The advisor is unable to discuss how to sequence DC with DB pensions and the meeting is highly generalised and not tailored in any way to individual circumstances.

I feel it might be a helpful service, however, for anybody who doesn't routinely inform themselves about pension access options through online research..

My thoughts too, felt that my knowledge was far superior to that of the advisor.....however I may sure it’s very useful for those who don’t know much about pensions, be it state, dc, dB etc....

Brie

Is this for each new pension or just that you need to do this once?

dunstonh

My thoughts too, felt that my knowledge was far superior to that of the advisor.....however I may sure it’s very useful for those who don’t know much about pensions, be it state, dc, dB etc....

It may have been a typo on your part but the pensionwise people are not advisers.     Their training is nothing like as comprehensive as an adviser.   And probably a good thing too because they would inevitably become frustrated by the limitations of what they can offer.

Is this for each new pension or just that you need to do this once?

You don't need to do it at all.  The thread title is wrong.