The Financial Conduct Authority faced a grilling from MPs on its pension guidance work as the chief executive of the regulator admitted it did not have a target uptake in mind for the Pension Wise service.
Speaking at his second Treasury Select Committee meeting yesterday (November 4) Nikhil Rathi, the newly-appointed chief executive of the FCA, said there had been a rise in the number of consumers using the free government-backed guidance service Pension Wise.
But he acknowledged more was to be done to increase its reach among consumers.
When asked by Julie Marson MP about a target uptake of the service, the FCA boss admitted there was not a collective target in mind between the watchdog, The Pensions Regulator and the Department for Work and Pensions.
Mr Rathi said: "There is also a question of the funding of the service as well and the capacity versus demand.
"I think giving everyone appointments would be quite an expensive way of running that service.
"But what we are quite keen to do is work on these measures around nudging consumers and where we do need to put in some mandatory points around firms contacting proactively and much more frequently we will do so."
Ms Marson branded the actions proposed by the FCA to improve the uptake of Pension Wise as "slightly vague".
The DWP is expected to publish regulations which will require trustees and managers of occupational schemes to present taking pension guidance as a “natural” part of the process when looking to access or transfer a pension. But it stopped short of making guidance mandatory.
At the point at which a saver indicates they would need to take guidance, providers will be expected to incorporate booking an appointment with Pension Wise into the process.
As well as encouraging people to use the service, the DWP said these proposals would help protect savers from scams as they will be able to make more informed decisions.
Meanwhile, there have also been calls for Pension Wise to operate a low cost form of advice, in particular to help those looking to transfer out of their defined benefit pensions, even if the value is less than £30,000.
But advisers have warned if this were to go ahead it would need to be operated properly to avoid causing further confusion and undermining the advice profession.
rachel.mortimer@ft.com
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