The Government-sponsored Single Finance Guidance Body (SFGB) has lived through its first quarter, since its public launch at the start of 2019. It brings together three financial guidance bodies: the Money Advice Service, The Pensions Advisory Service, and Pension Wise.
What kind of service is the SFGB inheriting? What kind of challenges will it face? We have carried out regular research for Pension Wise over the last three years (harking back to its own launch in 2015) and found a high-performing service with remarkable consistency across multiple delivery channels.
Here’s a snapshot from our most recent research, evaluating Pension Wise customers from 2017/18.
When we surveyed 2017/18 Pension Wise customers, we found that almost all (97%) felt their understanding of their pension options had improved after their appointment.
Pension Wise customers are more likely to know the facts about their pension options than their peers. We asked a series of true or false questions to gauge this, both among customers, and among those who could have used the service over the same period, but didn’t. Seven in ten customers (68%) were certain that you don’t have to buy an annuity, vs. 44% of non-users. Seven in ten (70%) were also certain that they could mix the ways they take money from their pension pot (e.g. using some to buy an annuity and keeping the rest invested), vs. 37% of non-users.
Pension scams are on the rise, according to the Insolvency Service. We found that 92% of Pension Wise customers felt confident in their ability to avoid scams three months after using the service, compared with 78% of non-users.
Taking positive steps
We also found that Pension Wise customers are still more likely to take positive steps than non-users and shop around before finalising their pension withdrawal arrangements. In the three months following their appointment:
- Seven in ten customers (72%) had calculated the income they would need in retirement (vs. 34% of non-users)
- Seven in ten (71%) had read up about their preferred pension options (vs. 35% of non-users)
- Three-fifths (63%) had spoken to their pension provider about their pension pot options (vs. 18% of non-users).
The overwhelming majority (92%) of customers are satisfied with Pension Wise, and 95% of customers say they will recommend the service to others or have already done so.
The SFGB is charged with delivering a number of other services and priorities alongside pensions guidance – things like day-to-day money management, debt advice, and the pensions dashboard. One of the big challenges will be achieving and maintaining these kinds of positive ratings across all its areas of operation.
Pension Wise has so far shown resilience to increasing customer volumes. It started with c.4,000 customer transactions in its first month in spring 2015, and reached a high of c.15,000 a month in late 2018. A rising customer base or changes in the profile of customers in the future will bring new challenges.
For one, it will need to keep looking at ways of engaging audiences digitally, to stay useful and relevant. Ipsos's tech tracker shows that around nine in ten 55 to 64 year-olds are internet users, and 61% of those aged 55+ own a smart phone. We’ve already talked about the future of financial relationships in a new, digital age – and how it’s tough to keep an emotional connection with customers engaging purely online. Maybe we will see further developments of Pension Wise’s digital service.
So, in sum, there are many trials ahead. In many ways, Pension Wise has lived up to its name, helping customers to wise up to their pension options, and guiding them to take appropriate actions. But for the service to stay Wise, it needs to keep innovating and evaluating.