Launched in April in conjunction with The Pensions Advisory Service (TPAS) and LEBC, the scheme found that out of those 9,000 people who were offered advice about their pension, only 225 took it up.
Pensions strategy director of Legal & General, Adrian Boulding, said the company was “surprised” by the low take up, but said this was “the value of doing a pilot [because] you discover the unexpected in time before the main event”.
He said: “I find the lack of time some people have the most worrying aspect, especially when for some reason retirement suddenly springs upon them.
“It will be important for the Government’s guidance to be delivered early in the process before people have made up their mind by themselves or come under time pressure.”
In the fourth hearing of the Taxation of Pensions Bill committee on Thursday, the Treasury minister David Gauke suggested the firm’s pilot scheme was not a measure of what will happen when the reforms are introduced in April because the scheme was “independent of the Government’s guidance service and took place before delivery partners were announced”.
He added: “It is also important to note that the pilot was available only over the telephone within certain opening hours. However, that example does provide a useful lesson on the importance of engaging people.”
Gauke also reassured committee members that the guidance should be “tailored to the individual” and “is not designed to replicate professional financial advice” by recommending specific products or providers.
“Disappointing”
In parliament, Boulding said it was “disappointing” that so few people took up the advice, but he added: “We will push it strenuously and encourage consumers to take it, but I warn you that you may see surprisingly low levels of take-up of the guidance guarantee”.
Speaking to International Adviser after the hearing he said: “What we’ve learned from the pilot is that we’ll need to make a real effort to sell it in. I believe that the pensions industry will rise to this challenge.
“It will be important to Government to work hand in glove with the pensions industry here. Together we need to deliver both the guidance and a range of retirement products to consumers at the optimum time for them.”
