- It helps consumers make informed choices
- It is commercially advantageous
- Non-participation risks public censure.
In a damning statement, Pension Bee has quit the service after only a year. The tool is failing in all respects.
- It is not helping consumers make informed choices
- It is not giving commercial advantage to those participating as providers.
- The providers who don’t use the service risk no censure.
This blog endorses Pension Bee’s resignation and asks why MaPS won’t engage with a positive alternative, that puts value rather than price as the key metric for its guidance.
Like PensionBee, AgeWage takes this tool very seriously. It is currently an enormous opportunity lost. We would rather see the site work.
The story from Pension Bee
Pension Bee was one of nine providers who volunteered to be on MaPS comparison tool. A year later, it has asked to be taken off the tool and for the tool to be taken down as not fit for purpose.
Less than 6,000 unique referrals were made to pension providers through the MoneyHelper tool since launch
A Freedom of Information request from PensionBee, reveals that only 5,989 unique referrals took place from the MoneyHelper investment pathways price comparison tool from its launch in February 2021 to January 2022, despite significant efforts dedicated to building and maintaining this tool.
PensionBee wrote to MaPS in March 2021 raising its concerns that the tool was highly misleading and not fit for purpose. It challenged the decision to display ‘a hodgepodge of incomparable products’ side by side in a way that suggests they should be compared.
It warned that solely focusing on charges without sufficient consideration given to other important features such as target returns, past performance, ability to make small withdrawals, and availability of planning tools was to the detriment of transparency and consumer outcomes.
Additional concerns were also shared around the approach to the tool’s design, which left it subject to provider manipulation, where inappropriate products could be placed under the hood of each pathway simply to rank better.
PensionBee called for urgent changes to be made to ensure the tool offered consumers a representative market comparison of their available options.
In its correspondence, PensionBee questioned why so many major pension providers, who were eligible to appear on the tool, were conspicuously missing.
Despite assurances from MaPS that it was in the process of onboarding additional providers, on a voluntary basis, and that the tool would be kept under review in line with FCA guidance, we have not seen any changes that would enable meaningful product comparisons, and efforts to onboard other major providers appear to have been unsuccessful.
Disappointed by a lack of progress, and exceptionally low levels of consumer engagement, PensionBee again wrote to MaPS on 15 February 2022 requesting its immediate removal from the tool.
Romi Savova, CEO of PensionBee, commented:
“Last year we asked MaPS how it measured consumer outcomes from the tool, and what success looks like. Today it is clear from the number of unique referrals that the tool is pointless and not fit for purpose.
The low level of consumer engagement is extremely disappointing given the huge financial investment that has gone into the tool. As a result, we have lost confidence in it and requested our immediate removal.
Only if sufficient progress is made to ensure that the tool enables meaningful product comparisons and helps consumers make better decisions about what to do with their pensions at retirement, would we consider rejoining in future.”
AgeWage view – the site is failing to assess Value or engage Savers.
Our experience is similar. AgeWage has written to MaPS three times over the year offering to upgrade the comparison site so it compared outcomes from investment pathways rather than price.
Other price comparison sites , such as Martin Lewis’ SIPP service, focus on products that provide administration and can be compared on a commoditised basis, through price and quality of service. But the main value of an investment pathway is – as the name suggests – in the investment of money. Investment is not a commoditised service, it is a service that can achieve a large range of results ranging from financial ruin to stellar success.
The way to judge investment products is through their outcomes. Though the pathways were made available in February 2021, the investment solutions have typically been in existence for five – often ten years. It is quite possible to assess outcomes using real-life drawdowns, charges , returns and volatility. These returns can be compared using Value For Money Scores
A white elephant?
The site is not being used and is failing both its customers and the providers who supply information to it.
MaPS is not bringing onboard the providers who refused to join at launch, nor will it until it can show a better means of comparison both to providers and to consumers.
We have received no response from MaPS to our offer. We have continued to call out the comparison tool as a bad example of guidance, focussing members purely on price, ignoring what was going on with the investment of the money and delivering messages which were likely to lead to bad decision making.
That the site has been constructively used by less than 6,000 people over the year, suggests that is has been failing in its purpose of providing guidance.
To re-quote Philip Brown, writing in Corporate Adviser,
To this end, it’s vital to make it a requirement that all workplace and retail pension schemes publish their value for money scores. Value for money should not just be a description but an order: if you do not show the value, you should not be able to accept a member’s money.
A work in progress?
The site is said to still be in “beta” but , the tool was required by the FCA as part of its flagship initiative to get people to follow investment pathways. According to the FCA’s Retirement Income Survey, over 600,000 personal pensions get accessed for the first time by savers every year. This suggests that less than 1% of those plans accessed, used MoneyHelper’s tool. This is simply not good enough for a service that is uniquely positioned and funded by a levy on the financial service industry.
The site should not be abandoned but improved so it is no longer in “beta”. But, as PensionBee point out, there has been no work done on the site over the last 12 months.
MaPS’ VFM
As I have been saying a lot recently, MoneyHelper and its tools are not free, their costs are passed on to advisers and providers who in turn pass them on to people buying advice and pension products. So the public should expect value for money.
It is sad but not surprising to see Pension Bee buzzing off. The good news for MaPS is that there is a way of sorting this, we have a remedial plan – let’s hope that MaPS will listen.