The number of people not showing up or cancelling their Pensions Wise guidance appointment is increasing despite the stronger nudge initiative.
Data from the Money and Pensions Service, analysed by Quilter, revealed the initiative has had a 'disappointing' impact thus far.
The stronger nudge to pensions guidance was intended to normalise people taking Pensions Wise guidance as part of the process for applying to take or transfer their defined contribution benefits.
In the first year following the implementation of the stronger nudge, there were a total of 124,316 guidance sessions attended from June 2022 to May 2023.
However, the data has shown that in the second year since the implementation the number of sessions attended has decreased year-on-year to 117,862, just 8 per cent higher when compared to attendance figures before the implementation.
The number of guidance appointments arranged compared to before implementation rose by 24 per cent in the same period in both 2022-23 and 2023-24.
Despite this, there was also an increase in the number of no shows and cancellations rising from 25 per cent, prior to the stronger nudge, to 30.5 per cent in 2022-23, and is expected to rise again to approximately 34 per cent in 2023-24.
According to Quilter, the FCA’s retirement income market data recently revealed that the total number of pension plans accessed for the first time in 2022-23 was almost 740,000, up from 705,666 in 2021-22.
This suggests that although the number of people accessing their pension savings year on year is rising, this is not being reflected in a continuous increase in Pension Wise appointments attended.
Jon Greer, head of retirement policy at Quilter, said: “Accessing your pension funds is one of the biggest financial decisions you can make, and guidance can be invaluable for those who opt to go it alone. However, despite the stronger nudge, we are still seeing the minority of people attending Pension Wise guidance sessions.
“Though well meaning, the timing of the stronger nudge to pensions guidance comes when many people will already have decided to access their pension savings and have an idea of the action they wish to take. They may therefore view guidance as a barrier to their plans.
“However, there are likely a great number of people who are opting out and going ahead with their plans with no support at all which could have a serious impact on their financial wellbeing in later life.”
Reasons for opting out
Quilter has suggested one of the factors contributing to the number of no shows and cancellations is the length of time customers often have to wait before being able to access a Pension Wise appointment.
Since the introduction of the stronger nudge, there has been more than a month’s wait for these appointments due to a lack of resources.
Quilter has said for guidance to become normalised it has to be repeatedly marketed in the mainstream media.
