Pensions guidance providers unveiled
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Citizens Advice Bureau will provide expert face to face guidance, and telephone guidance will be provided by the Pensions Advisory Service.
Expert and respected guidance providers Citizens Advice will provide free and impartial face to face pension guidance from April, the Chancellor has announced today (Saturday 18 October).
People who wish to access their defined contribution pension flexibly will be able to go to a local Citizens Advice Bureau across the UK for expert face to face guidance, or receive telephone guidance from the Pensions Advisory Service.
An online service will also be designed by the government as part of the scheme. The face to face service will be delivered by Citizens Advice across England and Wales, Citizens Advice Scotland and Citizens Advice Northern Ireland.
Today’s announcement is the government’s next step in delivering on the most radical pension reforms in nearly a century that the Chancellor announced at budget, giving hardworking people the freedom to access their money as they wish.
The Chancellor promised earlier this year that people would be able to access free, impartial pensions guidance to ensure that they can take full advantage of the new pension freedoms and manage their hard-earned money in a way that works for them. The government will legislate next week to underpin the guidance, including an amendment which will make imitation of the guidance service a criminal offence.
Speaking from a Citizens Advice Bureau in Sutton, the Rt. Hon George Osborne, Chancellor of the Exchequer, said:
Giving people the freedom to manage their own pension is the backbone of this government’s radical pension reforms and key to our long term economic plan.
That’s why I’m delighted that respected and impartial consumer advice organisations - Citizens Advice and The Pensions Advisory Service - will be offering free face to face and telephone guidance to people across the country from April, as promised in the Budget.
These organisations have years of experience dealing with a variety of consumer issues and are well placed to be accessible to everyone who reaches pension age and feels they would benefit from the guidance.
Pension expert Dr Ros Altmann CBE said:
This is a big step forwards in ensuring the pension revolution announced in the Budget will have a meaningful impact on pension savers. It is clear that, currently, most people saving for a pension don’t understand all the vital issues, and it’s really important that they receive impartial help to make the best decisions for themselves.
Both the Pensions Advisory Service and Citizens Advice have longstanding experience in helping the public with financial issues; and it is really important that people do trust the scheme, otherwise they remain at risk of stumbling into poor decisions.
Michelle Cracknell, Chief Executive of The Pensions Advisory Service, said:
The Pensions Advisory Service has been offering free, independent and impartial information and guidance about all aspects of peoples’ retirement savings for more than thirty years. We are excited at the opportunity presented by the promise of a guidance guarantee to get more people than ever engaged in thinking about their retirement options. We hope that our combined knowledge, expertise and reputation will enable us to create the best service and customer journey possible for those reaching their retirement.
We believe that it is essential that the guidance is delivered by specialists that have the experience and knowledge to respond to how people feel about this subject and get them to engage. Once we talk to people about their lives and their priorities, our experience is that we can get people to feel more confident about what they need to do next. CAB has a strong local and national presence and the partnership between TPAS and CAB has existed for many decades, so anyone who had a pension question had access to high quality free, impartial guidance on this topic. Our experience on the helpline is that our customers value the access to specialists and the bespoke and personalised conversations that we have with them about their retirement options.
Gillian Guy, Chief Executive of Citizens Advice, said:
The right guidance can be the key to a financially stable retirement. People who have diligently saved year after year towards their retirement deserve to choose how to make the most of their pension pot and good guidance is central to helping people make the right decisions for them.
As a trusted, independent charity, Citizens Advice is in a unique position to deliver face to face pensions guidance. We have 75 years’ experience working at the heart of communities, helping people get to grips with their finances. It’s a natural fit for us to help people understand their pension options and make choices for their future.
Margaret Lynch, Chief Executive of Citizens Advice Scotland, said:
Citizens Advice Scotland welcomes the opportunity to work with the government to design a Pensions Guidance Service which can be delivered through our network of local independent CABs. We would aim to ensure that members of the public who require it receive independent, impartial guidance on pensions as on many other issues.
Bill Osborne, Chief Executive of Citizens Advice Northern Ireland, said:
Citizens Advice Northern Ireland is proud to provide information and holistic advice to the entire community. As a partner in the initiative, we will help empower clients in another important part of their life journey.
At Budget the government announced the most radical changes to the way people take their pension for a century. From April 2015, around 320,000 individuals retiring each year with defined contribution pension savings will be able to access them as they wish, subject to their marginal rate of tax.
Alongside this, the government announced that it will ensure everyone able to take advantage of these flexibilities can access free and impartial guidance on their available choices as they approach retirement.
The government consulted extensively on the best way to implement this and published its response to the consultation ‘Freedom and Choice in Pensions’ on 21 July
The response confirmed that HM Treasury will hold overall responsibility for the service design and implementation until the guidance service reaches maturity. This is being led by an implementation team based in the Treasury, bringing together expertise from across Government, TPAS and the Money Advice Service, who are supporting development of the website.
Image by 401(K) 2012 on Flickr. Used under creative commons.
Published: 18 October 2014
From: HM Treasury