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

zagfles

Albermarle said:

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?

Yes, the vast majority of people, even older people coming up to the age where they can draw their pensions, are incredibly ignorant about pensions, so pensionwise are useful for them. For regulars here, it's unlikely to tell them anything they don't already know. In fact for most regulars here an IFA won't tell them anything they don't already know!

MallyGirl

Albermarle said:

MallyGirl said:

Prompted by the title I just went and looked at how ii handle this - there are lots of words about sources of information/guidance but one of the options is 'just go ahead' so they don't insist you talk to anyone.

On the other side Fidelity insist on a approx 45 minute telephone call, and I think Vanguard do something similar.
Maybe being UK offshoots of huge US companies makes them culturally more vigilant in covering themselves, in case of later client litigation.
Probably they are both a bit OTT, whilst II is maybe too much in the other direction?

An update. OH turned 55 so we sat down to initiate his 25% PCLS from the ii pension - part of his LTA management strategy. There were actually a lot of questions to answer and big warnings about getting advice, the pitfalls, MPAA, scams etc. He was a quivering wreck by the end of it. 

Albermarle

MallyGirl said:

Albermarle said:

MallyGirl said:

Prompted by the title I just went and looked at how ii handle this - there are lots of words about sources of information/guidance but one of the options is 'just go ahead' so they don't insist you talk to anyone.

On the other side Fidelity insist on a approx 45 minute telephone call, and I think Vanguard do something similar.
Maybe being UK offshoots of huge US companies makes them culturally more vigilant in covering themselves, in case of later client litigation.
Probably they are both a bit OTT, whilst II is maybe too much in the other direction?

An update. OH turned 55 so we sat down to initiate his 25% PCLS from the ii pension - part of his LTA management strategy. There were actually a lot of questions to answer and big warnings about getting advice, the pitfalls, MPAA, scams etc. He was a quivering wreck by the end of it. 

This seems at odds with the comments in this thread about II
Unless they have a completely different procedure for taking a PCLS rather than a UFPLS

Platforms with SIPP drawdown done 100% online — MoneySavingExpert Forum

MallyGirl

It was all online but there was a series of questions to be answered. You could say no to 'have you had a consult with Pension Wise' but it was still a question to be answered before you could complete the request. There were a fair amount of dire warnings.

Silvertabby

zagfles said:

Albermarle said:

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?

Yes, the vast majority of people, even older people coming up to the age where they can draw their pensions, are incredibly ignorant about pensions, so pensionwise are useful for them. For regulars here, it's unlikely to tell them anything they don't already know. In fact for most regulars here an IFA won't tell them anything they don't already know!

The most worrying, in my eyes, are those who think they know it all.  But don't.

gm0

To me everyone seems to be operating entirely to incentives. 

IFAs say this is not proper advice tailored to circumstance which is correct but not super relevant as it wasn't meant to be.

Some already knowledgeable DIYers of a more libertarian persuasion don't like paying for it via industry levy to help the 90% with the complexity created by governments over decades .  Others of a more communitarian disposition think it beneficial *enough* for the masses without the pot sizes for advice or the interest and prior self study to have grasped pension complexity and so are more tolerant of the levy to provide support. That's politics as usual.  People doing it - it's a cushy gig by the miserable standards of telesales but not making anyone doing the scripted work especially rich.

Pensionwise are doing their thing but are concerned not to stray into what many consumers would prefer - actual help with option selection, tailoring to circumstances.  A lot (arguably too much) energy is expended on this aspect.  Not disrupting the advice market or setting the bad example the FCA wish to police in other product providers interactions with consumers.

It has been a limited very partial success with poor uptake - so FCA are trying to fix the symptom not the disease by raising the uptake.  A classic civil service response. Improve this proxy metric. Declare success. So FCA are fiddling with the COB to push providers to "sell" Pensionwise appointments more aggressively. Still stopping short of a consumer mandate" that you have to have one. Not least because they don't want to resource it and set service levels for that.  A classic - something must be done.  This is something.  So *this* must be done.  Aha uptake is poor and the underlying issue is not really addressed. No matter. Sell it harder.

I did the call. It was OK for what it aims to do. Innoffensive. My DIY research had already passed the script level. 

+1 to feedback on edge cases being poorly supported.  I had LTA questions (already knew what I thought was the answer) to which they gave me factually incorrect answers.  I subsequently double checked and corrected my understanding on web chat with the Pension Advice Service (PAS) who did know what they were doing.  This is a clear structural deficiency in the script and the support materials they use which are not broad enough in scope.  They hide behind "seek advice" on personal circumstances and have done a less effective job on these materials than they should.  That is my major criticism although I am conscious that the more comprehensive (and complex) they make it - the more the skill level they require for the script callers goes up.  Tradeoffs.

There was a consultation on the provider COB updates around these changes around PensionWise which I believe supports my PoV that the goverment are doubling down on the metrics of the existing "fix" whether or not it works.  To be fair to FCA and Pensions minister nobody has an alternative suggestion which is more palatable and addresses unmet need.  So despite my cynical description this may be the "least worst" option available.

Reducing pension complexity as part of a more macro change which solves some of the current problems yet which constrains people's options is a deeply contentious idea unacceptable to many.  Example: National pooled DC - Defined Ambition (DC+), death pooled for longevity, variable element with investment returns, a variation on the Netherlands model with some Nordic ideas mixed in.  Unsaleable now in the world as Osborne has left it regardless of the benefits or rights and wrongs at society level.

zagfles

gm0 said:

To me everyone seems to be operating entirely to incentives. 

IFAs say this is not proper advice tailored to circumstance which is correct but not super relevant as it wasn't meant to be.

Some already knowledgeable DIYers of a more libertarian persuasion don't like paying for it via industry levy to help the 90% with the complexity created by governments over decades .  Others of a more communitarian disposition think it beneficial *enough* for the masses without the pot sizes for advice or the interest and prior self study to have grasped pension complexity and so are more tolerant of the levy to provide support. That's politics as usual.  People doing it - it's a cushy gig by the miserable standards of telesales but not making anyone doing the scripted work especially rich.

Pensionwise are doing their thing but are concerned not to stray into what many consumers would prefer - actual help with option selection, tailoring to circumstances.  A lot (arguably too much) energy is expended on this aspect.  Not disrupting the advice market or setting the bad example the FCA wish to police in other product providers interactions with consumers.

It has been a limited very partial success with poor uptake - so FCA are trying to fix the symptom not the disease by raising the uptake.  A classic civil service response. Improve this proxy metric. Declare success. So FCA are fiddling with the COB to push providers to "sell" Pensionwise appointments more aggressively. Still stopping short of a consumer mandate" that you have to have one. Not least because they don't want to resource it and set service levels for that.  A classic - something must be done.  This is something.  So *this* must be done.  Aha uptake is poor and the underlying issue is not really addressed. No matter. Sell it harder.

I did the call. It was OK for what it aims to do. Innoffensive. My DIY research had already passed the script level. 

+1 to feedback on edge cases being poorly supported.  I had LTA questions (already knew what I thought was the answer) to which they gave me factually incorrect answers.  I subsequently double checked and corrected my understanding on web chat with the Pension Advice Service (PAS) who did know what they were doing.  This is a clear structural deficiency in the script and the support materials they use which are not broad enough in scope.  They hide behind "seek advice" on personal circumstances and have done a less effective job on these materials than they should.  That is my major criticism although I am conscious that the more comprehensive (and complex) they make it - the more the skill level they require for the script callers goes up.  Tradeoffs.

There was a consultation on the provider COB updates around these changes around PensionWise which I believe supports my PoV that the goverment are doubling down on the metrics of the existing "fix" whether or not it works.  To be fair to FCA and Pensions minister nobody has an alternative suggestion which is more palatable and addresses unmet need.  So despite my cynical description this may be the "least worst" option available.

Reducing pension complexity as part of a more macro change which solves some of the current problems yet which constrains people's options is a deeply contentious idea unacceptable to many.  Example: National pooled DC - Defined Ambition (DC+), death pooled for longevity, variable element with investment returns, a variation on the Netherlands model with some Nordic ideas mixed in.  Unsaleable now in the world as Osborne has left it regardless of the benefits or rights and wrongs at society level.

I think the new "investment pathways" are a good start - like during the accumulation phase, most people will use a workplace pension with a default or range of default options rather than taking individually tailored advice. Most peoples' circumstances and objectives will be broadly the same as tens or hundreds of thousands of others so taking individually tailored advice and paying a substantial portion of your pot to do so seems unnecessary for most people. 

Of course, you'll always get it justified by pointing to the extreme examples of scams, or pots all in cash, which is why using a "pathway" of 4 or 5 options like most people have during accumulation may be a good compromise.

I think your experience with pensionwise just illustrates that you should never trust a single source of information for anything important, even an IFA, we've had loads of examples here (both directly and indirectly) of IFAs getting things wrong. Anyone can make a mistake, or think they understand something they don't. Always get second, third, even multiple opinions. That's why boards like this are so useful, if someone gets something wrong they'll usually be corrected by someone else. And you can have your own opinions and understanding challenged by others.

wjr4

zagfles said:

gm0 said:

To me everyone seems to be operating entirely to incentives. 

IFAs say this is not proper advice tailored to circumstance which is correct but not super relevant as it wasn't meant to be.

Some already knowledgeable DIYers of a more libertarian persuasion don't like paying for it via industry levy to help the 90% with the complexity created by governments over decades .  Others of a more communitarian disposition think it beneficial *enough* for the masses without the pot sizes for advice or the interest and prior self study to have grasped pension complexity and so are more tolerant of the levy to provide support. That's politics as usual.  People doing it - it's a cushy gig by the miserable standards of telesales but not making anyone doing the scripted work especially rich.

Pensionwise are doing their thing but are concerned not to stray into what many consumers would prefer - actual help with option selection, tailoring to circumstances.  A lot (arguably too much) energy is expended on this aspect.  Not disrupting the advice market or setting the bad example the FCA wish to police in other product providers interactions with consumers.

It has been a limited very partial success with poor uptake - so FCA are trying to fix the symptom not the disease by raising the uptake.  A classic civil service response. Improve this proxy metric. Declare success. So FCA are fiddling with the COB to push providers to "sell" Pensionwise appointments more aggressively. Still stopping short of a consumer mandate" that you have to have one. Not least because they don't want to resource it and set service levels for that.  A classic - something must be done.  This is something.  So *this* must be done.  Aha uptake is poor and the underlying issue is not really addressed. No matter. Sell it harder.

I did the call. It was OK for what it aims to do. Innoffensive. My DIY research had already passed the script level. 

+1 to feedback on edge cases being poorly supported.  I had LTA questions (already knew what I thought was the answer) to which they gave me factually incorrect answers.  I subsequently double checked and corrected my understanding on web chat with the Pension Advice Service (PAS) who did know what they were doing.  This is a clear structural deficiency in the script and the support materials they use which are not broad enough in scope.  They hide behind "seek advice" on personal circumstances and have done a less effective job on these materials than they should.  That is my major criticism although I am conscious that the more comprehensive (and complex) they make it - the more the skill level they require for the script callers goes up.  Tradeoffs.

There was a consultation on the provider COB updates around these changes around PensionWise which I believe supports my PoV that the goverment are doubling down on the metrics of the existing "fix" whether or not it works.  To be fair to FCA and Pensions minister nobody has an alternative suggestion which is more palatable and addresses unmet need.  So despite my cynical description this may be the "least worst" option available.

Reducing pension complexity as part of a more macro change which solves some of the current problems yet which constrains people's options is a deeply contentious idea unacceptable to many.  Example: National pooled DC - Defined Ambition (DC+), death pooled for longevity, variable element with investment returns, a variation on the Netherlands model with some Nordic ideas mixed in.  Unsaleable now in the world as Osborne has left it regardless of the benefits or rights and wrongs at society level.

I think the new "investment pathways" are a good start - like during the accumulation phase, most people will use a workplace pension with a default or range of default options rather than taking individually tailored advice. Most peoples' circumstances and objectives will be broadly the same as tens or hundreds of thousands of others so taking individually tailored advice and paying a substantial portion of your pot to do so seems unnecessary for most people. 

Of course, you'll always get it justified by pointing to the extreme examples of scams, or pots all in cash, which is why using a "pathway" of 4 or 5 options like most people have during accumulation may be a good compromise.

I think your experience with pensionwise just illustrates that you should never trust a single source of information for anything important, even an IFA, we've had loads of examples here (both directly and indirectly) of IFAs getting things wrong. Anyone can make a mistake, or think they understand something they don't. Always get second, third, even multiple opinions. That's why boards like this are so useful, if someone gets something wrong they'll usually be corrected by someone else. And you can have your own opinions and understanding challenged by others.

Unless you’re seeing a one-person band who is doing their own administration, internal checks are completed a LOT before any suitability report with advice is sent. By that point, there shouldn’t be any mistakes. 

Malthusian

gm0 said:

IFAs say this is not proper advice tailored to circumstance which is correct but not super relevant as it wasn't meant to be.

[8 year old petty grievance] That's not what George Osborne said when he set it up [/8 year old petty grievance].

It is relevant to the ordinary Jo/e who (like Osborne) doesn't know there is such a thing as a distinction between advice and guidance, and think the Pension Wise assistant is going to tell them what they should do, like their GP does.

I am broadly with the communitarian side. It is a sticking plaster to deter people from cashing in their pensions en masse, blaming the Government for not stopping them and then demanding extra support from the state. It is far too early to say whether it has succeeded, but it seems to be working OK so far. (That's about all the analysis you can do without a few million quid from the Government to conduct an independent inquiry.)

zagfles

Malthusian said:

gm0 said:

IFAs say this is not proper advice tailored to circumstance which is correct but not super relevant as it wasn't meant to be.

[8 year old petty grievance] That's not what George Osborne said when he set it up [/8 year old petty grievance].

It is relevant to the ordinary Jo/e who (like Osborne) doesn't know there is such a thing as a distinction between advice and guidance, and think the Pension Wise assistant is going to tell them what they should do, like their GP does.

I am broadly with the communitarian side. It is a sticking plaster to deter people from cashing in their pensions en masse, blaming the Government for not stopping them and then demanding extra support from the state. It is far too early to say whether it has succeeded, but it seems to be working OK so far. (That's about all the analysis you can do without a few million quid from the Government to conduct an independent inquiry.)

Attitudes in and towards govt do seem to have changed a lot in the last 8 years or so. When the freedoms were announced there was a libertarian attitude - the pensions minister saying he was "relaxed" if people decided to blow their pension on a Lamborghini and live off the state pension https://www.bbc.co.uk/news/uk-politics-26649162

But since the pandemic, furlough, lockdowns etc there seems to be more of an expectation of a "nanny state" who tell you what to do and look after you and make sure you don't do something silly, and if anything goes wrong it's not your fault it's the govt's fault for letting you be silly. You see it on the BBC news practically every night - there's some social issue covered (eg poverty, obesity, debt, alocholism etc) and the implication is it's always the govt's fault for not doing enough, never the affected peoples' fault for making bad decisions.