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The Treasury and DWP have announced that the Money Advice Service, TPAS and Pension Wise will be merging into one service that provides consumers with financial information and guidance.
This makes sense. There is already a considerable crossover between the existing three agencies, so this is surely a positive step forward. Alongside the proposed pensions dashboard, it could even lead to pension savings being more easily included in regular budgeting and financial decision-making.
Nowadays pensions are a consumer product, like bank loans and life insurance. Pension schemes no longer have huge teams of administrators waiting to talk members through the decisions they may need to make. As things are at the moment, a member might be directed to four or five different places for information and guidance. This means are they are often confused and put off from seeking advice in the right places. It all seems too much like hard work. Unfortunately, this can lead to people not making the most of their savings and being financially worse off.
A one-stop shop could be an excellent opportunity to increase engagement and create a more joined up service, but it won’t be easy. Currently the pensions communication space is still bogged down with jargon and mixed messages. A great example of this is how the Money Advice Service has the word ‘advice’ in its title, whereas Pension Wise talks about guidance. Both only provide information and guidance. The challenge for the new service will be to give clear and engaging information to people at all stages of saving and receiving retirement income. This needs to be consistent with the information they receive from their individual schemes or providers and delivered in plain English. If successful, employers, providers and consumers will all benefit.