We need to take people and their pension savings more seriously.


There is a section of the FCA’s rulebook  entitled PERG/8/28 which deals with the vexed subject of guidance and advice.

. When answering the question “do you give advice?” PERG/8/28 is helpful.

The Pension Advisory Service  sees advice as “delivering a definitive course of action” which in less flowery language means telling people what to do. I feel a little responsible for the fancy definition as Michelle Cracknell says I gave it her, I may have done but I didn’t make it up.

People who operate in the unadvised space want to give their customers the information they need to make informed decisions. One of those decisions may be to take advice , referring people to advisers is something that goes on all the time, not least from the Government’s own Money and Pensions Service.

There is a useful distinction to be made between information and “meaningful information”, the latter you can take action on, the former is noise. In a recent conversation on value for money, the FCA wrote me

“in order to be meaningful we need the IGC to obtain data on what each employer’s scheme is achieving for its members”

This is meaningful information about meaningful information. It confirms that value for money is specific to the entity analyzing it. But the statement is also inferring that current IGC VFM information is less than meaningful to employers, because it does not refer to them.

If you take this logic a stage further , you can see that value for money information is only meaningful for savers, if it relates to them. A statement that the IGC considers its provider is delivering value for money is not meaningful information unless a saver considers he or her is typical.

Most people resent being treated as typical, especially when something as important as their financial savings are involved. They want to know about their money and their value and don’t like being lumped together as anonymised members of a scheme. This is fair, they are the people taking the risks of things not going right and even if they opt out of taking control of their investment decisions, they still hold those who manage their money accountable.

At the heart of what AgeWage does is the measurement of value for money through an AgeWage score.  This is not a subjective process, the score is derived from data on contributions and outcomes of contributions and uses an algorithm which assures consistency. The score is information as it shows people what has happened to their savings, but it is not telling them what to do.

As Perg/8/28 puts it

The provision of purely factual information does not become regulated advice merely because it feeds into the customer’s own decision-making process and is taken into account by them.

If  an assessment of “value for money” is ever going to help those who aren’t being told what to do, to take decisions, then it is going to have to be delivered in a way that is meaningful and feeds into the customer’s own decision making process. It will only be taken into account by customers if it is meaningful to then which means it has to be personalized.

Taking customers seriously

AgeWage scores tell people what they have done with their money, how it has grown since they said goodbye to it. But they don’t not tell people what to do with their money.

People are not stupid and they know that there’s more to a pension than the investment of their contributions. People are interested in the quality of service they get and they get that what happens when they start spending their money is different from when they are saving.

People get that their money could run out before they do, that their are other ways to fund their retirement spending than their pension and they know they have choices.

Where they choose to invest their money after they stop saving may be quite a different place than when they were saving for a host of reasons, including tax.

People are prepared to be guided towards options which interest them and we are testing what is of interest and how much guidance people need in our FCA test going on at the moment.

Our view is that if people have been given meaningful information about their pensions , they are more likely to trust the information that comes after because the trust deficit has been repaired. Getting people on your side means treating them seriously.

What we give people at retirement is not meaningful

Most wake up packs struggle to deliver meaningful information because of the delivery mechanism (paper), the format – a lot of words and because simple questions like “how have I done” aren’t either addressed or answered.

Pensions Wise is good but it is only a start – it too struggles to give people meningful personal information

Wake up packs and Pensions Wise simply can’t do the job that people need doing when they are taking decisions on later life finances.

The past is ignored as if it were irrelevant, but for savers, their savings are full of meaning. Each contribution was made at the expense of that money being spent elsewhere. Cars, holidays and items of everyday living weren’t bought so that pension contributions went on. Giving people an idea of what’s happened to the money they sacrificed is about taking them and their savings seriously.

Our view is that value for money scores can help people compare their pension savings accounts and create the engagement needed to get people ready to make the big decisions about aggregation, investment pathways and holistic retirement planning. For many this will mean taking advice, but many will find ways to struggle through themselves.

Giving people meaningful information about their savings is not advice, it’s just common financial decency that takes customers and their money seriously.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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