TPAS poised for pension guidance rush

The 64-year-old man with two pension pots and a "fit wife" who received a call from the government's Pension Wise service early on Wednesday morning may have not felt like a revolutionary.

But he has made history, as one of the first people in the UK to receive a free guidance session from Pension Wise, the newly-created service designed to underpin the pensions revolution.

From Monday, millions of over-55s will have new freedom to spend their pension savings as they wish, with no requirement to buy an annuity. The unshackling of retirement options will open an array of choice for savers, but also expose them to far more risk.

Much is riding on Pension Wise, a new free guidance service set up by the government to inform savers about their new options. But it has been dogged by concerns that it has been cobbled together in a rush, or staff will not be up to the job.

This week I travelled to the headquarters of The Pensions Advisory Service, as it conducted the very first telephone guidance sessions from its London call-centre.

Michelle Cracknell, chief executive, explains that she is very pleased with the team she has assembled to deliver the telephone guidance.

"It's been great actually," explains Ms Cracknell, who also manages the TPAS general pensions helpline that has been running for more than 20 years.

"Our recruits have come from a variety of backgrounds, including the insurance sector. Some are ex-IFAs, some are from the pensions regulator, others are from pension schemes administration.

"They have all met our requirements for five years' minimum pensions experience but they need those soft skills to work on the helpline."

A new wing has been created for Pension Wise in TPAS's London headquarters. During my visit, the new recruits, many in suits, are moving in and out of training rooms or are in the call-centre.

"I was attracted to the job because I want to help people and because the training is structured," says Tricia, who has a technical background and is on her first day at Pension Wise. "Pensions are an exciting world now."

Currently there are 31 staff fully trained to deliver Pension Wise appointments, with another nine to complete their training in time for April 6, the first official day of "pension freedom".

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Once the operation is fully running 49 specialists will be expected to deliver 46,000-47,000 telephone guidance appointments each year, estimates TPAS. The plan is for guiders to do five appointments per day, five days a week, with appointments running from 8.30am to around 5.20pm. There is also the possibility of some Saturday sessions.

But on the afternoon of my visit, a week before the start of the revolution, the call-centre is surprisingly quiet.

"We haven't had high volumes today," explains Ms Cracknell, adding that the Treasury 'purdah' ahead of the general election has restricted advertising for the booking line.

"But the week after Easter is pretty much going to be back-to-back appointments."

"Treasury wants to make sure that in the first year the availability is there and Pension Wise is amply resourced," she says. "I think we have got sufficient capacity to meet demand."

Michelle Cracknell takes me through the checklist that guiders work to during the guidance appointments.

"They don't work from a script," she says. "This checklist covers all the important points, but it's a discussion."

After introductions, the session starts with a statement that guidance isn't advice, and then the guider gathers information such as their martial status, health and details of their pension pots.

The longest chunk of the guidance session, accounting for about 25-30 minutes, is devoted to discussion about the expanded range of pension options: doing nothing; buying an annuity; going into drawdown; cashing in the pot entirely; or a mix of the three.

"There are five options but the amount of time spent on each is specific to each individual," says Ms Cracknell.

"We won't spend ages talking about an annuity if the person has said from the outset that they are not interested."

"We will spend a bit of time reminding them of the pros and cons of annuities but they are not going to force them into a long conversation about them."

State pensions, benefits, tax, long-term care and scams are also on the checklist of things to be discussed.

At the end of the session, the customer receives a hard copy reminder of everything that was discussed, plus info with contact numbers, and next steps.

"At this point, the guiders will talk about regulated advice and where to get it," says Ms Cracknell, adding that TPAS does not share customer information with third parties.

I listen to one of the first guidance sessions, which was recorded last week with the caller's consent.

The 64-year-old indicates he "doesn't want to go down the annuity route" but also mentions that his wife is "a lot fitter" than him.

The guider settles the caller into the session by assuring him that "pensions have a lot of jargon" and to "please stop me" at any point as "no question is too daft".

The guider is probing and the session highly interactive as he establishes the age, size and location of the caller's two pension pots, and whether they carry valuable guaranteed annuity rates as insurers may not be "overly keen on bringing these to people's attention".

I am impressed with the fluency of the session and technical skill of David, the guider. I later discover that he is a former pensions lawyer.

David explains that he joined Pension Wise because "I thoroughly enjoy pensions and want to help people in the right direction".

Since his first guidance sessions a few days ago, he says that he had a wide range of sessions, from people with modest pots, to a man with a personal pension worth more than £650,000.

"He called because he wasn't happy with his adviser and was looking for an impartial opinion," he explains. However, he adds that most people want to know what to do.

"I had one lady ask me on three occasions: I want to do this, what do you think?" he says. "I had to remind her that this is guidance, not advice."

The issue of guiders straying into advice is one I raise with Ms Cracknell. David is clearly highly experienced, but what about less experienced staff?

"People do like to be told what to do, but that is not what guidance is about," she says. "We have systems in place to monitor this by listening back to the calls to make sure guiders aren't stepping over the line (into advice)."

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