The Money and Pensions Service is in a mess – and it needs to be told so.

This session of the Work and Pension Committee’s taking of oral evidence was a game of two halves. In the first half, David Fairs and Sarah Pritchard had a reasoned debate with selected MPs on how people could expect to turn their pension pots into pensions. In the second half, the Money and Pensions Service had an opportunity to show their agenda for the pension dashboard and for what they worryingly call “the guidance journey”. As you may have guessed, the first half was rather more palatable than the second.

You can see for yourself by watching it again from this link.

What is worrying is that the normally balanced Chis Curry seemed to have gone native in the company of Alex Connolly and Carolyn Jones. One MP asked why he was seeing dashboard services advertised by the private sector today, the answer is of course because of the law of supply and demand, but the response from Maps was sinister. It seemed people would be better waiting for the Government dashboard to arrive and put their retirement planning on hold – “Money Helper knows best“.

We are now in the third year of delay beyond the original dashboard availability point in 2019. In the meantime, people have been through a pandemic , many have been furloughed and many had considerable periods off work through sickness. People in their fifties and sixties are statistically more likely to be long-term unemployed because they are not suited to much of the work that is on offer. They are therefore getting more interested in their pensions and turning to the private sector in the absence of a Government tracing service that finds and displays pension pots and allows people to take decisions about combining them.

the part 2 crew

To suppose that this is preventing financial self-harm is ridiculous. Faced with the absence of affordable, accessible advice , people are turning to DIY dashboards which at the more sophisticated end are spreadsheets and at the more primitive levels are lists of policies and membership numbers with values alongside which may be pensions or maybe pots.

To suppose that people can make head or tails of what to do is to suggest that Andy Haldane is a financial muppet.

So what is Maps doing for us today?

Maps wants its flagship Pension Wise service to have a take up of 75% of its accessible market. These are the latest figures

The take up Pension Wise , five years after inception is appallingly below target. Maps repeatedly tells us that those who go to Pension Wise say it’s great, but they are a self-selecting group. If Pension Wise had the reputation its testimonials would suggest it should have, it should be going viral, but take up remains extremely low. The worry is that the people who use Pension Wise are simply validating advice they are getting elsewhere or looking for a second opinion on DIY decisions taken on an informed basis.

Pension Wise is not doing face to face appointments because of the pandemic. We were told yesterday that face to face meetings were “actively under consideration”. No one asked why the telephone was being used as opposed to web-calls, WhatsApp, Facetime and of course Zoom are streets ahead of telephone calls – even for Pension Wise’s target demographic. It is not as if a Pension Wise appointment gets to discuss people’s financial affairs in detail, even if it did, screen sharing would enable documentation to be looked at on a web-call.

So what is the game plan for Pensions Wise, apparently it is about a campaign next year called Stronger Nudge.

The Stronger Nudge to pensions guidance aims to increase take up of pensions guidance, by requiring trustees and managers to ensure that individuals have either received or opted out of receiving appropriate pensions guidance before proceeding with their application.

Pension Wise is to be more actively promoted, not just by TV ads but by those who have control of our money. To claim that a stronger nudge will get take up of Pension Wise up by even to 3% is highly speculative, to hang on the stronger nudge the aim of making a Pension Wise appointment “the normal” is absurd.

It is time that Maps provided us with evidence of why around 98% of its accessible market are turning it down, rather than comforting itself in the validation of the 2% who take it up. There is something seriously wrong with Pension Wise – it has not and is not capturing the public imagination , it is currently a waste of tax-payer’s money.

And it is up to Maps to explain why it is that we will not be getting the regulations for the pension dashboard till 2023, four years late – meaning we are unlikely to get a dashboard availability point in 2023 or commercial dashboards till 2025.

In the meantime, we are likely to see the prevalence of “back-street dashboards” increase as lead generators work out that offering a primitive tracing service is infinitely more attractive to a guidance session with Pension Wise. While much of the pension combining will go to good pensions, the unregulated dashboards of the lead generators will take people to whatever pension aggregator will pay the highest marketing fees.

Since lead generation is an unregulated activity and SIPPs can pay for leads without declaring those payments commission, we are actually aiding and abetting bad practice the longer we delay the dashboard availability point.

Sense elsewhere

Thankfully, there are people in Government who do not see Pension Wise as suitable for everyone and who are actively exploring better ways to convert pots into pensions than an hour long guidance session. David Fairs and Sarah Pritchard (who spoke in the first half of this session) appear to be among them. Fairs was adamant that Pension Wise is not right for everyone and I suspect he is as frustrated by demands for it to be “normal” as I am. Similarly Sarah Pritchard seemed unimpressed by arguments that Pension Wise should become the “norm”

But , for the most part, the debate about how we give people information about turning pots into pensions and how people do their cash-flow planning for the longest holiday of their life, seems to have got stuck in the mess called Maps.

The Work and Pensions Committee should look beyond Maps for solutions, it should look to the success stories in financial services, firms like MoneyHub and Pension Bee . The MPs should look beyond the virtue signaling they heard yesterday and ask themselves why 98% of the people offered Pension Wise aren’t bothering with it. They should be demanding that the Pensions Dashboard meets the needs of the people who are paying for it and they should be asking serious questions about the value we are getting for the money we are putting into Maps.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to The Money and Pensions Service is in a mess – and it needs to be told so.

  1. John Mather says:

    If the budget for this task were applied to time with a qualified adviser
    how many ADVICE outcomes would be bought compared with the GUIDANCE
    Maybe some of the ongoing legacy charges taken by ghost providers could be used in this way as well to fill the advice gap adding 20,000 qualified helpers to your cause

  2. Brian G says:

    Hi Henry. the average cost of a pensionwise appointment 3 years ago was £31. That’s excellent value for money. At the end of the day it is the regulator and parliament who decide what should and shouldn’t happen as regards to the norm for people looking to take their benefits. MAPS is the organisation that covers three main strands of activity i) money guidance which was previously covered by the Money Advice Service, ii) pensionwise, which is simply an appointment for people over 50 to understand their pension options. and iii) pension guidance which was previously provided by TPAS. In addition the Pensions Dashboard Programme (PDP) is headed up by Chris Curry under the direction of the MAPS executive, and has its own budget. Aside from the separate activity of the PDP the vast majority of the MAPS budget is actually used to fund external partners such as Citizens Advice Bureau and also several debt management and debt advice organisations. So the vast majority of the MAPS budget is not really spent by them, instead they commission services from partners such as those mentioned (CAB and debt advice organisations). Pensionwise is not controlled in reality by MAPS, the content of the Pensionwise appointment is signed off by the DWP and overseen by the FCA, and whilst I thoroughly agree with those who say Pensionwise is not for all (it most certainly isn’t) MAPS do not in reality control the content since the DWP and FCA are the controllers. MAPS makes suggestions, DWP decides. MAPS is an arms length guidance body. I hear what you say about the emergence of lead generators, but to be frank that has little to do with the availability or not of a dashboard to trace pensions, the vast majority of scams are caused by people wanting to take the pensions they know about and are far less perpetrated on people who don’t even know they have a pension. The FCA and the law should be far more punitive on internet search engines who don’t verify the authenticity and integrity of those using their platforms to advertise their scams. This is sod all to do with MAPS and all to do with an ineffective regulator who fails to take action until the stable door has bolted. It is also to do with not prosecuting people as criminals when they basically defraud pensioners. I would love to see a dashboard much more quickly, and don’t disagree how good it would be to get things done more quickly, so I don’t wish to disagree with that part of what you say. It is pure pie in the sky to say that 75% of all people with pension pots should have a pensionwise appointment as the number of staff delivering pensionwise would need to increase infinitesimally and there just arent that number or people to deliver them. As a result your suggestion about online services whatsapp and other forms of delivery would certainly help, but in reality even with those developments there is not the resource to give 75% of all those with pots about to be taken access to Pensionwise. The new due diligence service designed to reduce scams for those being advised to transfer away from occupational pensions (coming in October this year) will be delivered by Pensionwise too, so that trustees who identify potential transfers out which have “amber flags” can suspend the transfer until after the member can prove they have had a due diligence appointment with PW. That may stem the tide of some transfers that lead to scams. The Pensions guidance side of MAPS (along with the money guidance side) also gets involved in a lot of outreach activity where they work with employers and other organisations to inform the employees and other members of the public about their pension choices, and there are a very large number (greater than 100,000) of individual guidance sessions delivered to those whose enquiries fall outside the narrow remit of pensionwise appointments. These sessions include divorce appointments, mid life reviews targeted at self employed ,and pension loss appointments for those trying to rebuild their pensions after scams. All in all I feel that MAPS can of course seek to improve what it does, but they are not to blame for the ills of lack of advice, scams, and general shortfalls in the provision of financial help to those struggling to make decisions. Maybe there is a much greater need to look at why financial advice is so expensive, why so few people take advice and why people turn to guidance to fill in the shortfall gaps.

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