The announcement by the Financial Conduct Authority followed the Treasury’s decision to cut funding for Pension Wise by 27 per cent.
According to the DWP, the number of full-time equivalent staff providing guidance as part of Pension Wise service at the start to ensure that anyone could make an appointment regardless of where they lived in the UK.
“Pension Wise has now been running nearly a year, and we are in a better position to plan capacity. We are actively working with our delivery partners to ensure that the right resources in the right places.”
The latest figures for Pension Wise show a surge in demand for guidance, with 5,916 transactions in February, 75 per cent of these face-to-face appointments compared to 3,205 in December.
This makes February 2016 the second busiest month for Pension Wise since the service was launched, beaten only by October 2015 when there were 6,755 transactions with 79 per cent of these being face-to-face transactions.
In last month’s Budget, HM Treasury said Pension Wise would be merged with the Money Advice Service and The Pensions Advisory service. Despite the cuts, levy payers will be charged an extra £1.2m to cover the initial cost of providing consumers with guidance on the incoming secondary market for retirees to trade their annuities.
The FCA paper on fees and levies also stated that distribution of the Pension Wise funding should be unchanged from last year’s model. The unchanged distribution will also apply to the part of the 2016/17 Pension Wise funding requirement that relates to the extension of Pension Wise to provide guidance to consumers ahead of the new freedoms regarding annuity income.
(FTAdviser, April 2016, Ruth Gillbe)
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