TPAS – taking the “scary” out of pensions!

By the end of this year, the Pensions Advisory Service will be no more, subsumed into the Single Guidance Body. By the end of spring, their vibrant “third world” offices in Belgrave Road will be empty.

Whether the goodwill that TPAS has built up can be transferred to the new organisation is open to doubt. What Michelle Cracknell and her team have built up has been quite remarkable. The word of TPAS is authorative and personal, it’s guidance but instructive guidance that has led many of us down the right path. TPAS has resolved disputes and soothed the savaged brow of many a baffled saver, many a baffled pensioner too.

What I ask of Government

I have written before that bringing together a failing institution (the Money Advice Service) with a successful one (TPAS) should be a processing of levelling up. Instead we see a levelling down. In its initial vision , Simon Kirby – the former Treasury Minister and Richard Harrington the last (in every sense of the word) Pension Minister, laid out its task.

Back in 2016, when the plan for the SGB was announced, Simon Kirby, said:

We want to help people take charge of their finances, and make the financial decisions that are right for them. This new body will ensure that help is readily available for people who need to access debt advice, information on their pensions or guidance on other money matters.

And the (full) Minister for Pensions, Richard Harrington, said:

We want to ensure that everyone has access to high quality and impartial financial guidance, to help them make the most of their hard earned savings

This new single body will be a place people can go for free, impartial financial guidance, and I look forward to hearing people’s views on our proposals.

Specifically – as far as pensions are concerned this means “guidance and information on matters relating to occupational or personal pensions, accessing defined contribution pots, and planning for retirement”.

You can hear the painful discussions about these statements, the arguments over the semantics of “advice and guidance”. There are the nods to the consumer and our “hard earned savings” and a nod to IFA in “impartial financial guidance” but there really is nothing – nor has there been anything since – that suggests anything other than a re-arranging of the deckchairs on the Titanic.

The Titanic is the failed monolith at Holborn Circus, the Money Advice Service. The Government’s intention is to lash TPAS to the sinking wreck in the hope of salvage, the fear is that the bigger ship will drag TPAS down with it.

I cannot ask of Government that it reverses its decision, but I do ask of the new Chair and CEO of the Single Guidance Body, that they understand that TPAS worked and MAS didn’t. If they understand this, they will respect the work that TPAS does , the culture it has created and respect the vision TPAS had for expanding its work.

What I ask of the pension industry

Firstly I hope that the outgoing CEO of TPAS will be recognised as she leaves service at the end of the year. I don’t know what the going rate is for gongs, but now looks a good time to nominate her for any honours going. The benches of the House of Lords have been cruelly denuded of pension talent this year. We can but hope.

Secondly, I hope that we will learn from what TPAS has and is doing. It is necessarily constrained – both financially and in terms of its terms of reference. There is much that can be done commercially that TPAS couldn’t do, but what TPAS could do is to demonstrate that it  always acted in the public’s interest. The phrase “independent” really does apply to TPAS.

I see there scope for the work of TPAS to be taken forward with the help of technology so that much of what it does can be replaced by digital services. I suspect that this would have been the plan at TPAS had it been given time and money.

I also see scope for the private sector to push harder at the boundary between advice and guidance. Simon Kirby vowed we would have access to information on our pensions via a pensions dashboard around the time the SGB was announced

Two years on we are still nowhere near having a pensions dashboard. The likelihood of that happening when needed recedes by the day. For people do not even have a proper way to find their pensions, let alone work out how they’ve done and what they can do with them, is ludicrous.

Here’s how things have detoriated.

But instead of addressing the simple issue originally discussed the various bodies who have sat on the various working committees have connived to make such hard work of giving people what they want , that we are now bogged down in the most obscure of pension arguments.

Thirdly,  I ask of the pensions industry is to stop making such hard work of it. Leave ordinary people alone so that they can see their savings pot in one place, work out if they’re any good and take action so they can spend the money as suits them.

I say the same of guidance, we need to cut through all the complexity and get back to the questions people really want answering – how much have I got, how’s it doing and what should I do with it.

We will miss the Pensions Advisory Service because it always kept its eye on the ball and – despite having the expertise to deal with the most common of issues – it was always able to help people toward answering those simple questions.

I mean….

The answer to that question is – DON’T!