Now That It Has A Name, Here’s 5 Things To Know About The Government’s ‘Guidance Guarantee’
The brand name for the government’s Guidance Guarantee has been released and we can now all look forward to “Pension Wise.” Here in this week’s blog post we take the opportunity to list 5 key things to know about the government’s retirement Guidance Guarantee.
With the Guidance Guarantee from the government due to begin this year, what is there to know? We break the key points down into the 5 easy-to-digest points below.
1. It’s now got a name … and a catchy motto
It was announced this week that the Guidance Guarantee will be named “Pension Wise: Your Money, Your Choice.”
The Economic Secretary to the Treasury, Andrea Leadsom, announced: “We want people to be empowered to make informed and confident choices and I’m delighted to announce Pension wise: Your money. Your choice as the brand name for the impartial guidance service we are building.”
2. It starts very soon - in fact it already has
Pension Wise will run from April 1st this year, beginning at the same time as the new pension reforms in order to provide impartial guidance to those about to retire on the new pension freedoms which come into force on the same day.
Before April 1st, however, there will be pilot schemes running with the aim of testing the systems in place and helping the guidance providers to see what works well and what doesn’t. It’s possible to register your interest in taking part in the pilot schemes at www.gov.uk/pensionwise
3. We know who’ll be providing the guidance and how
It may have taken a while for the final decision on who is to provide the guidance, but we now know that The Pensions Advisory Service (TPAS) and Citizens Advice across England, Scotland, Wales and Northern Ireland will give the guidance.
Citizens Advice will offer guidance on pension and retirement options face-to-face, while TPAS will conduct its guidance sessions over the phone.
4. What the Pension Wise Guidance sessions will cover
The guidance sessions won’t be able to outline specific financial products or providers to use, but will give personalised advice and point users in the right direction.
The following outlines exactly what each guidance session must do:
- Inform consumers of the scope, purpose and limitations of the session
- Request information from the consumer about their accumulated pension pots
- Request information about the consumer's financial and personal circumstances
- Alert consumers to other sources of information and advice
- Identify options relevant to the consumer
- Point out tax implications and debt obligations
- Set out the next steps for consumers to take
- Provide consumers with a record of their guidance session.
5. We know that the Guidance Guarantee is not a substitute for regulated advice
As much as it’s a nice thought to provide everyone in the UK coming up to retirement with a guidance session to discuss retirement options, the government’s Guidance Guarantee sessions are not a substitute for regulated retirement advice from a financial adviser like DAM.
The Financial Conduct Authority said itself that, “Guidance does not replace financial advice given by regulated advisers.” Furthermore, many Pension Wise Guidance Guarantee sessions are actually expected to recommend seeking further advice from a financial adviser, so the guidance sessions are not a substitute for advice but may simply be the step before it.
If you’d like further info on the regulated retirement planning financial advice that DAM can provide then check out our dedicated page to it or drop us an email at email@example.com with any questions or queries and we’ll let you know how we can help.