Pension Wise is a guidance service offered by the Government, which is designed to help workplace and personal pension savers over the age of 50 make sense of their choices for retirement.

Our latest insight article looks at what Pension Wise offers, which providers link with the service, and what proposals are on the horizon

A free and independent government service from MoneyHelper to pension savers nearing retirement, the Pension Wise service has been the focus of heavy investment by the Government and the Money & Pension Service.

The service launched in 2015 following the introduction of Pension Freedoms, which changed how those aged 50 and over could access their workplace pension pots.

When workplace pension savers turn 50, they can book and appointment with Pension Wise to talk with an employee online, over the phone, or face to face.

The 45-to-60-minute appointment with Pension Wise is free and aims to help pension savers approaching retirement understand what their overall financial situation will be when they retire.

In this appointment workplace pension scheme members can discuss general retirement options such as the tax implications and basic breakdown of the options available when looking to take some or all of their pension savings at retirement.

Those under 50 with a workplace or personal pension can also call up the Pension Wise service to have basic questions around pensions answered.

The service also shares general tips about how to shop around and find the best deals for products such as annuities. 

Pension Wise employees can offer guidance on the options available, but they cannot give you any personalised financial advice.

One of the most common routes for those booking Pension Wise appointments to discover the service is through their pension provider, many of whom recommend their scheme members consult the service.

There are also many employers who recommend the service to their workers who are in the age-bracket to receive their free Pension Wise appointment.

Our data shows that almost all workplace pension providers include a link to the Pension Wise guidance service within their literature, platform and/or website.

The only provider who do not currently seem to include and link to Pension Wise is Mercer Master Trust

It is the most commonly linked to guidance service by workplace pension providers, with The Pensions Advisory Service and Money Advice Service, coming joint second.

Chart 1: Which pension and money guidance services do workplace pension providers link to?

However, despite the Government investing heavily in the service, currently only 14% of pension savers over 55 currently take advantage of the free Pension Wise appointments on offer. A further 14% take regulated financial advice.

Both the Financial Conduct Authority (FCA) and Work and Pension Select Committee have recently made proposals which they believe will help increase take up for the Pension Wise service.

In its annual policy statement the FCA confirmed that it will be requiring workplace pension providers to offer a stronger push towards the service from June when new rules come in to force.

The regulator has said providers will be required to do all they can to ensure members access the Pension Wise service when they look to access their savings.

There were calls from some for the regulator to make Pension Wise appointments mandatory for pension savers when they turn 50, but the FCA has stopped short of this for now.

In its policy paper the FCA said: “We think that providing consumers with better information to equip them to make decisions is central to achieving good pension outcomes. Since the introduction of the Pension Freedoms, we have introduced a number of requirements on pension providers to help consumers make decisions about which option – or options – to choose when accessing their pension savings. Implementing the stronger nudge to Pension Wise guidance, is a further step in improving the consumer pensions journey.”

From the 1st June, workplace pension providers will be required to refer scheme members looking to access their retirement savings to Pension Wise guidance, explain the nature and purpose of Pension Wise guidance, offer to book a Pension Wise guidance appointment “in most cases”, or provide customers with information to help people who want to book their own appointment.