Article by Mhairi
The level of demand for pension transfer advice is growing. According to the Financial Conduct Authority (FCA), pension providers dealt with 1 million pension transfer requests in the last 12 months.
Concerns have been expressed about delays in the supply of pension statements by providers, but the FCA says that the average transfer time was 15 days and the shortest 5 days. That doesn’t seem unreasonable. However, there are delays earlier in the transfer process. These delays are at the start of the process when dealing with initial Letters of Authority (LOA’s). These LOA’s need to be processed initially to allow pension providers to acknowledge the authority of financial advisers to deal with the pension transfer advice for a customer in the first place.
One of the other areas of delay is where the pension transfer is flagged as a potential scam. At this point the pension provider has to conduct further investigations to protect the customer. This adds delay and pushes the average transfer time back to as many as 160 days. Unfortunately, over 90% of transfers are flagged at the outset. That’s despite them, being simple transfers between UK pension providers. It’s this part of the pension transfer advice process which needs looking at.
State Pension under review
Another reason why pension transfer advice is in demand might be concerns over the state pension.
State pension age will already rise to 67 in 2026 and then up to 68 by 2044, but the government is now looking at the whole state pension system. The reason is increasing life expectancy. For example, 66 men are already expected to live for almost 20 more years on average. It’s estimated that by 2050 25% of the population will be over 65. That will place an unbearable burden on public finances. Something will need to change.
But people rely on the state pension. It makes up 50% of household income for the over 70’s. People are rightly concerned about any cuts to the pension.
Most of the solutions to the pension crisis would be deeply unpopular. These might include:
- Removing the triple lock.
- Moving public sector workers into private pension schemes.
- Means testing for the state pension.
Targeted and Simplified pension Advice
As we reported recently, the FCA intends to widen the spectrum of pension transfer advice to reach a wider audience. This will include both targeted and simplified advice. These will not require a full disclosure of individual financial circumstances but will work on broad brush guidance. However, the FCA has just announced that both targeted and simplified advice will require separate authorisation for both the financial adviser and the advice firm. This will ensure that they can maintain control over standards of conduct and potentially offer some levels of redress for customers. More detail will come as we get nearer to the implementation date.
They’ve also said that they expect targeted advice to be mainly run by bigger companies, using technology-based solutions. This probably means that we will see Banks and Insurance Companies back in the “advice” market.
Pension Attention campaign launched
The pensions industry has joined together to launch a new Pension Attention advertising campaign. This time actor Ross Kemp is the face of the campaign which is running ads on social media.
The idea is to compare getting your pension in shape with getting yourself in shape physically. The campaign is directing people to the Pension Attention website.
Women most concerned about pension advice
According to Pension Bee women are less certain than men when it comes to pension arrangements. They found that:
- Only a quarter of women felt that they had control over their pension and retirement plans. Compared to nearly 40% of men.
- Only 33% thought they were close to meeting their pension goals.
- Falling to only 8% of women over 45.
Christina offers pension transfer advice for women.
Joint pension advice
It is always advisable to get pension transfer advice together with your partner. In fact, Christina will only advise if both partners are going to be present. One of the reasons, as Hargreaves Lansdown found in their latest survey is that a third of people are reliant on their partners pension in retirement.
The survey also found that:
- 40% of people said that they wanted a guaranteed income in retirement so that they knew where they were financially.
- 10% said that they wanted their pension to perform better than inflation.
- 7% wanted flexibility, and
- 6% just wanted to avoid having to pay tax!
Get more information.
For more information about pension transfer advice why not contact Christina today. We offer a free initial meeting to discuss your requirements and explain how our service works. You are under no obligation to use us after that if you don’t want to and we won’t pester you.
So why not call us today on 01282 614444 or e mail us enquiries@ccfps.co.uk or use our contact form online.
