What’s helping people to take decisions is problematic, the question we should be asking “what’s helping people to take the right decision”. In an earlier blog in this series looking at the FCA Financial Lives 2024 survey, it became clear that many people are confident they knew what they needed to know;- without much evidence that they did.

It is good that provider’s retirement packs encourage people to consider spending their savings. But we need to ask if they’re prompting the right questions.

Nearly three quarters of people with private pensions acknowledge they’ve had a pack and done something as a result.

40% of people who know they’ve had a retirement pack consider their options in the round, a third do this by themselves , a different third call in an adviser to help them and (maybe as part of discussions elsewhere) 27% of people have a conversation with Pension Wise (the Government’s support service).

16% have done none of these – which may constitute people who have done nothing at all.

It is fascinating what people get information about from pension providers. The most relevant discussions are about “tax implications”, then how long people are going to live. The latter is a little down from last year but suggests that a lot of people do consider “pots” as potentially “pensions”.

That 60% of people claimed to have had “regulated” advice gets some of the most severe questioning from FCA’s interviewer. People are likely to discuss a formal conversation with a provider or MaPs as well as those with IFA’s. There is a hint to the FCA that people might start thinking of “regulated” with reference to what they paid to get it. In my experience working with people who get advice on transactions, they are not fully aware of what they are paying. Considering the difficulties that advisers have getting paid by most people, the thought that 60% of people who get at their pension pots , pay advisers- is ridiculous.

People struggle to understand why they need to pay for getting their money paid to them.  While some of the subjects which people need help on are sophisticated (means testing, guarantees and “shopping around”) not all of them are stocks in trade for advisers. Except for Gareth Morgan, I know of no advisers who advise on means testing (pension credit for instance). This is brilliant work from the FCA but more work is needed for us to understand what should be “regulated” and how people understand what they need.

The key number for me is that nearly three quarters of those who did not use what they understood to be “regulated” advice, thought there was no need for it. there were other reasons which were critical of financial advice but the central lesson is that people object to having to pay for what they think is included in the “pensions” they have bought over the years,

This is interesting about the type of use of MaPS. My experience is that AI is killing the integrity of websites, people now want a quick synopsis of the answers to their questions and do not regard a Government site as any more authoritative than others. What MaPS, a Government paid for site offers, is the chance to speak with someone human, this is something that AI does not offer (or MaPS site). We should not underestimate the benefit to people of articulating their problems and getting answers they can query. This is a sourcing problem for MaPS but may be its salvation over time.

I read these numbers as neutral, MaPS should be getting more people using them and it’s worrying that it is not getting a third using it , strongly agreeing it is helpful. Indeed nearly half of those using it give a lukewarm reaction to what they got.

What follows is perhaps demonstrative of people’s inventiveness in seeking information or the failure of pension providers to give them obvious solutions to the question “what should I do?”.  Only 11% of people talked about having a one on one session with their provider, more got information from the web (a third) while the bulk of sources quoted were over a long tail of sources. This has to be disappointing to Government and providers.

It is good that people see the quality of information on pensions as high. The problem is that it leads to a range of decisions which are questionable in quality and give knowledge about options which is incomplete or just a misunderstanding of the truth.

This brings us back to the irony of support. There simply isn’t the product in place to help people manage pension freedom. It is time that the product matched the need people have for an answer that doesn’t need advice but the instruction of default.

Those who want to make their own choices must be free to do so, those who don’t want to choose should be satisfied by a product that they can recognise as a “pension”.