Anticipating this, the Government set up Pension Wise, one of several guidance services now offered by the Money and Pension Service (MaPS). During a Pension Wise appointment, savers receive free and impartial guidance about the options available when they access their pension savings.

So far though, only a small proportion of savers tapping a DC pension pot for the first time have used the Pension Wise service. This is despite providers being required by The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) to ‘signpost’ retirees to Pension Wise, in addition to providing retirement risk warnings.

Several initiatives have been designed to increase bookings and attendance of a Pension Wise appointment. MaPS appointed a Behavioural Insights Team to help develop a behavioural nudge, which the DWP plans to implement. Not before time: three years ago this week, the Financial Guidance and Claims Act 2018 committed the Government to regulate for a stronger nudge: a final opportunity to take Pension Wise guidance before accessing pensions savings.

However those provisions, in sections 18 and 19 of the Act, have still not been brought into force; so we haven’t seen draft regulations yet. No time frame has been offered. Meanwhile though, the FCA is not hanging about: opening a new consultation this week, ahead of regulations, on “The stronger nudge to pensions guidance”, with draft amendments to the Conduct of Business Sourcebook (COBS).

The idea is that the nudge, explaining the nature and purpose of pensions guidance, should be combined with the retirement risk warnings, and include an offer by the provider to book a Pension Wise appointment. What the individual does about it should also be recorded, as well as whether they went on to get regulated advice.

Interestingly, the FCA acknowledges that while this stronger nudge will be useful, there is significant debate about what else can be done to increase take-up of Pension Wise guidance, most recently during the passage of the Pension Schemes Act 2021. Proposals to make a Pension Wise appointment mandatory, or at least offered five years before normal minimum retirement age, were voted down.

So the current consultation, which closes on 29 June, goes further by seeking views on whether savers – or ‘consumers’, as the FCA persistently calls them – who decline the offer to book a guidance appointment (or cancel, or fail to attend one) should be required to wait during a ‘cooling off period’ before accessing their pot.

Should the nudge be given earlier? There is evidence that some people have already decided how to access their pension by the time they contact their provider to do so. So guidance at this point may, therefore, have limited influence on how they wish to proceed.

Facilitating access to guidance before the individual has made up their mind what they want to do makes sense; but compelling them to do so before they can access what is after all their own money looks like a non-starter.

There are those who feel confident enough in their own capacity to make decisions about their retirement income to ignore offers of guidance, even when it is free, well-informed, and delivered face-to-face. There are plenty more pension savers who don't want guidance because they know they will only be told about their options - i.e. what they could do with their pension pot. What they really want to know is what they SHOULD do - which means advice.

Evidence suggests that only a tiny percentage are able and willing to pay for professional financial advice, similar perhaps to the proportion of the population who pay for private medical treatment. Meanwhile increasing regulatory requirements, levies, and PI cover are combining to reduce the availability and increase the cost of financial advice.

Ultra-low interest rates too are contributing to a problem which is getting worse, as more people fall victim to scammers. Hence initiatives such as the Regulators’ long-running (since 2017) Scam Smart campaign, and calls for more and earlier financial education.

Pension Wise and supplementary initiatives will continue to make only a marginal difference to life in retirement: until we accept that that our financial well-being is just as important as our physical and mental health. Financial advice free at the point of delivery, like medical advice, is the solution we need.

The Citizens Advice network already offers free debt advice, as well as operating Pension Wise. The government could, and should, build on this existing foundation.

Ian Neale, Director, Aries Insight