30 May was the date that marked 18 months after the emergence of new pension transfer regulations. The Department for Work and Pensions has set a highly anticipated review to take place during this period. Recent Freedom of Information (FOI) reports collected from the Money and Pensions Service (MaPS) brings up interesting insights on what the DWP review should consider.
The new FOI data has been provided by the consumer charity Quilter, which is focused on driving positive change in the pensions and savings market. Quilter reports that there are three main issues the DWP ought to be focusing on when undertaking its review. It’s crucial that the DWP is aware of these and takes into consideration the solutions Quilter recommends for each issue.
The first matter Quilter believes should be addressed by the DWP is the lack of understanding and confusion in the pension transfer marketplace. From the collection of FOI data and a series of telephone interviews Quilter conducted with people who had pension advice, the evidence indicates that too many people lack an understanding of their pension or have an incorrect understanding. Quilter states that if this issue isn’t resolved, people’s retirement could be seriously undermined and therefore, the DWP needs to ensure that it’s doing everything in its power to aid clarity around pensions to reduce any consumer confusion.
The second area for consideration is customer service, according to Quilter’s findings. An alarming number of surveyed customers revealed that they had been exposed to levels of customer service that fell below expectations. Quilter has made it clear that it finds these figures unacceptable, which is why it recommends the DWP forces pension providers to monitor their customer service standards and amend them if needed. This would enable a better customer experience for all and ensure that transferring a pension is a much smoother, more satisfactory process.
Finally, Quilter believes the DWP should reform its governance structure for pensions. At present, it is said to not be operating in the best interests of those who transfer or hold their pensions. This is because, due to a lack of independence, many people are not receiving the advice they need. As a result, Quilter believes the DWP should be reforming the governing powers of pension advice so that it is fairer, and therefore, advisers have more independence when going over the topic of pension transfers with customers.
In conclusion, the review undertaken by the Department of Work and Pensions is of utmost importance for the future of pensions. The FOI data gathered and examined by the consumer charity Quilter has highlighted a number of areas that the DWP review should take into consideration when examining pension transfers for the greater good. In order to provide customers with a better overall experience, the DWP must also consider the lack of understanding in the market, the quality of customer service, and the ability of advisers to offer independent advice.