Concern over new pension advice service

Piggy bank Image copyright PA

A leading pensions expert has said the government's new pension advice service will not be properly staffed by the launch date of 6 April.

Margaret Snowdon told Radio 4's Money Box programme that Citizens Advice had left it too late to ensure staff would have the right level of expertise.

In October the government announced that Citizens Advice would provide face-to-face "guidance" at bureaux.

Citizens Advice said the service would be "up and running" by the launch date.

However its chief executive, Gillian Guy, said her organisation was not looking to recruit "pensions experts".

From April those aged 55 and over who were due to access defined contribution pensions will have new freedom to take their pension as a cash lump sum, with no obligation to buy an annuity.

Last March, Chancellor George Osborne announced that anyone retiring on one of these new schemes would be offered free, impartial, face-to-face advice on how to get the most out of the choices available.

Image copyright EPA
Image caption The Chancellor has given pensioners greater access to their savings

Earlier this week Citizens Advice announced that 44 out of its 316 offices in England and Wales will offer face-to-face guidance under the Pension Wise scheme, with between three and seven members of staff in each office.

But critics have expressed concern that the recruitment process has started too late and staff will lack the necessary experience and qualifications to give expert advice when the scheme rolls out on 6 April.

Citizens Advice told Money Box that the recruitment process is yet to be completed.

'So important'

Once all the appointments have been made the Treasury will then be responsible for training and assessing staff before they start work in just over 10 weeks' time.

Margaret Snowdon, who was awarded an OBE for service to the pensions industry in 2010, said: "This is so important. If people who don't understand pensions and don't understand much more than the people they are speaking to that's going to be so apparent and it's going to blow the service."

Ms Snowden said the minimum requirement for some people providing the advice should be three years' experience plus a qualification.

The Pensions Advisory Service, who will be responsible for delivering telephone guidance, stated in their job advert that applicants must have experience in working pensions and specific pensions knowledge.

Its chief executive, Michelle Cracknell, has said the organisation is recruiting for the role on a similar basis to that for its advisers, who are required to have five years experience in pensions and a qualification.

Guidance vs. advice

But Ms Guy, from Citizens Advice, said there was a "fundamental difference in the interpretation of what this service is. It's quite clearly been defined as guidance and not advice and it's not regulated advice".

She added that people receiving guidance at the bureaux offering it would be signposted to places where they can receive further advice.

It has also been revealed that complaints about the new service will not be handled by the Financial Ombudsman Service.

A complaint will initially go to Citizens Advice, and if they can not resolve it it will go to an independent adjudicator appointed by the Treasury.

The Treasury is yet to decide the terms under which the adjudicator will work but will make an announcement in "due course".