Behavioural trials to establish the best way to persuade more people to take Pension Wise guidance before accessing their pension savings are getting under way.
Under the leadership of the Money and Pensions Service (MaPS), the research is being conducted by the Behavioural Insight Team - an organisation that was set up to apply nudge theory to try to improve government policy and services.
The trials will be conducted with two different approaches to directing savers towards Pension Wise when they first access their pension savings or call to discuss their options.
The trials are being carried out with three providers – Aviva, Hargreaves Lansdown and Legal & General Investment Management - to ensure a broad spread of customers.
The approaches being tested see the provider offering to book a Pension Wise appointment for the customer and the customer being transferred to MaPS to make an appointment.
The research will cover 4,300 conversations and will test the effectiveness of these approaches against the existing signposting to Pension Wise, which is prescribed by regulations.
The evidence will help both the Financial Conduct Authority (FCA) and Department for Work and Pensions (DWP) enable the delivery of the commitment made in the Financial Guidance and Claims Act 2018. This included provisions setting out a requirement for a stronger nudge towards pensions guidance at the point people apply to access or transfer their pension savings.
Jackie Spencer, senior policy and propositions manager at MaPS, said: “More than nine out of 10 people who use Pension Wise are positive about their experience, but we know too many people continue to make decisions about their lifetime savings without getting any form of guidance or advice.
“Working out the best way to encourage people to have these conversations has the potential to change people’s lives in retirement – helping them think through all of their needs and how they will fund them.”
The number of Pension Wise appointments has almost trebled since the service launched in 2015/16, rising from 61,000 in 2015/16 to 167,000 in 2018/19.