Pension Wise guidance counsellors should be as qualified and experienced as regulated financial advisers, a consumer watchdog says, as it branded the current service inadequate.
The Financial Services Consumer Panel has reiterated concerns it raised previously with the FCA in a report sent to Work and Pensions Committee chairman Frank Field MP.

The panel said that those working for Pension Wise needed to be experienced professionals not solely relying on a script. It stressed that for the guidance service to be effective it must have consistent standards, whether that be on the telephone or face to face.

The FSCP report stated: “This is vital to build consumer confidence in the service, and to guarantee good consumer outcomes from every guidance session.

“The panel has argued consistently that simply stating that guidance counsellors “are competent and have sufficient knowledge and expertise to deliver the guidance” is not enough.

“We have asked the FCA to be more prescriptive about minimum qualifications and the number of years of relevant experience counsellors should have. We believe that the level of service required by consumers in this area can only be delivered by confident, competent, experienced professionals who do not have to rely on a script. “They need to be as qualified and experienced as regulated financial advisers.”

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The Government needs to be more transparent about how Pension Wise is performing, the FSCP said, while also expressing concerns about “low numbers” using the service. The panel called for information on how often and by whom Pension Wise has been used to be published- ideally every quarter.

Officials said this should include the number of sessions completed - both face-to-face and via telephone - as well as the mean and median pension pots of those who accessed the service.

The report stated: “The Pension Wise guidance service is essential to help people navigate the new pension freedoms, but it is not clear at present that it will lead to better outcomes for consumers.

“The Government needs to be more transparent about how Pension Wise is performing, and what would be considered good outcomes. The Panel believes it should regularly publish management information to show what proportion of eligible people is making use of the service. It also needs to conduct a thorough review to determine whether Pension Wise is leading to better outcomes for consumers.”

The report also called for HM Treasury and the Department for Work & Pensions to determine the best way of building a universal retirement income calculator for use by Pension Wise.