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Savers accessing pension prompted to book guidance session

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01/06/2022
People looking to access their pension money will now be asked by their provider if they want to book a financial guidance session.

From today (Wednesday 1 June), pension providers are required to offer to book a free Pension Wise appointment for any savers looking to access their retirement cash or to transfer their money into another scheme.

This applies to ‘defined contribution’ pension schemes, including Self-Invested Personal Pension (SIPPs), personal pensions and many workplace pension schemes.

Pension savers aren’t obliged to take up a guidance session and they can opt out.

Crucially, this is guidance not advice and it excludes defined benefit schemes.

The government has recently rejected calls by the work and pensions select committee to take the process a step further and automatically enrol savers into a guidance appointment with Pension Wise before accessing their money.

Jon Greer, head of retirement policy at Quilter, said: “We know many people looking to access their pension savings for the first time have usually done their research or spoken to an adviser and have a set idea about what they want to do. However, where advice hasn’t been sought, guidance can be very helpful to outline all your options, and therefore it’s a good idea to seek free Pension Wise guidance if you are at all unsure or would like to talk it through with someone.

“Pension providers will also ‘nudge’ you towards pension guidance if you are seeking to transfer for the purpose of accessing pension savings. The nudge can either be provided by the transferring or receiving pension scheme and will impact the transfer process, perhaps resulting in you being prompted to seek guidance by both pension providers in some circumstances.”

Greer added that this new process is “really a catch-all and arguably comes a bit late for people”.

“At the point of contacting their pension provider people have usually made up their mind what they want to do. It’s a good idea to consider advice or guidance much earlier in order to plan effectively for retirement. If you have a personal pension, you will receive a ‘wake-up pack’ at age 50, which is an ideal time to plan out your options if you haven’t already,” he said.

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