Pension Wise will be available face-to-face, over the telephone and online. The telephone service will be provided by The Pensions Advisory Service and the face-to-face service by the Citizens’ Advice Bureau at selected locations around the country.
Pension Wise is available to anyone, but is targeted at those aged 55 and over who want to make a decision around how to take their pension benefits.
Until it goes live we can’t know, of course, what will be involved in the service or what to expect but we do know already that a Pension Wise session is expected to last around 45 minutes, after which you will receive a document summarising the discussion, the areas covered and your personal circumstances.
The session is likely to work through all your pension savings and benefits as well as outlining the options available to you, the impact and consequences of each, and, of course, the tax implications of any action.
The Pensions Advisory Service itself has confirmed that the service will generally work through five options:
- Doing nothing immediately if you don’t need to access pension.
- Buying an annuity.
- Taking flexible income, either through drawdown or by taking irregular cash lump sums.
- Taking the whole pot as cash, including through trivial commutation.
- Using a blended approach combining different products.
The session will deal with issues such as how rules may differ across schemes, and prepare you for considering your needs throughout your retirement.
Most importantly it will also signpost places for further information, including in appropriate cases highlighting regulated financial advice.
The guidance delivered by Pension Wise is about getting people started on their retirement journey so that they can understand their options, ask the important questions and feel ready to take the next step. The service will be signposted in packs sent by insurance companies who will also have to ‘flag’ the service when consumers get in touch about accessing their benefits.
At Farsight Financial we believe that ‘Guidance’ will help some people narrow down their list of options; but when you are working out the best option and deciding which provider or providers offer the most suitable solution for you, that is where you really should obtain independent financial advice. After all this could potentially be a decision that affects you for the rest of your life.
The system itself will point people in the direction of listings such as the Money Advice Service directory where they can find a local, qualified, adviser.
So, if you have friends or colleagues that are intending using the Pension Wise service we would encourage them to do so, then talk to us for an in-depth follow-up and full advice.