Just over one in 100 eligible defined contribution (DC) pension savers are using free Pension Wise guidance sessions in some areas of the country, according to analysis from Just Group.

New regional figures revealed by the Money and Pension Service (Maps) to Just following a Freedom of Information request showed that that DC pension savers in 2019-20 were about twice as likely to take a session in Scotland, the West Midlands and Yorkshire & Humber compared to those in Northern Ireland, London or the North East.

Estimated take-up of Pension Wise appointments was 3.1 per cent in Scotland, while just 1.2 per cent of DC savers aged between 50 and 65 were estimated to have had appointments with the service in Northern Ireland and Greater London.

The data indicated that areas where a higher proportion of the population had a DC pension, such as London, South East England and East England, Pension Wise usage was lower than average.

Just Group communications director, Stephen Lowe, said: “We estimate that in the area of highest usage, fewer than one in 33 DC pension savers eligible for a free guidance appointment take it up each year. In some areas it is more like one in 100.”

He added that concerns about scams and poor advice had led to rules being tightened in the defined benefit (DB) market and that the government and regulators now needed to anticipate emerging problems in the DC market, particularly among vulnerable and less financially confident pension savers.

Lowe commented: “We risk a two-tier system if we do not start to level up the DC safeguards towards the more stringent standards that exist for DB members. DC members are entitled to free, impartial and independent guidance but too many don’t know about it or don’t understand how it can help them.

“The pensions framework needs to lead people right to it rather than relying on signposting and hoping they find their own way there.”

He concluded: “Automatically booking DC savers onto their free Pension Wise appointments well ahead of them becoming eligible to start taking cash would help them understand the choices and give them more time to consider their options.”

Share Story: