Webb reveals further detail on guidance guarantee

Speaking at a Work and Pensions Select Committee meeting on Wednesday, Webb said the details of the guarantee were still in consultation, but revealed it would involve ongoing support for members.

Part of that guidance conversation is a recognition that guidance isn’t a one-off

Pensions minister Steve Webb

“[The member] will have a legal right to guidance conversation,” he said. “The details of that – who does it, how it’s paid for, and so on – we’re consulting on, but part of that guidance conversation is a recognition that guidance isn’t a one off.”

Alongside receiving face-to-face guidance, members would have access to resources online and via telephone, Webb added.

Industry groups have raised concerns about the timescales proposed to implement the changes brought about by the Budget, especially with the wider details yet to be announced. 

“There’s quite a lot that’s going to be required in either primary or secondary legislation, or through guidance from the FCA [Financial Conduct Authority] or the Pensions Regulator,” said Joanne Segars, chief executive of the National Association of Pension Funds, in a video interview with Pensions Expert last month.

“And it’s going to be much later in the year I think before we see some certainty around that.”

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Labour MP Glenda Jackson pressed the minister on the specifics of the guarantee and how those delivering the guidance would be accredited, and making sure they do not “sit on the fence” rather than give specific direction.

“I think people will be, in this new climate, looking for more than just the usual kind of ‘it may be this it may be that’.”

Managers at household-name schemes have privately shared concerns on how the guidance will be implemented. One manager said in-person guidance would be a major issue for schemes with members dispersed around the country.

Webb said people would have the option of an in-person meeting, but that they could choose a telephone conversation if they preferred. 

“You have that entitlement but we’re not going to insist that every delivery of the guidance is done face-to-face,” he said.

Committee member Sheila Gilmore MP drew parallels between the reforms and changes in the 1980s allowing people to leave the state earnings-related pension schemes in favour of personal pensions.

“The last time I remember a government enthusing about freedom for people in pensions was in the 1980s when people were given the freedom to come out of Serps,” she said. “One result of that was a huge amount of pensions mis-selling.”

However, Webb argued that the introduction of the new single-tier state pension would provide “a firmer foundation of state pension”, and therefore more security for individuals.

Another scheme manager speaking to Pensions Expert said the quoted £20m left aside to deliver guidance would not cover the costs.

But Webb stressed that the sum would be put towards building on an existing system to develop a support infrastructure, with the guidance itself being covered by the provider.