The calendar for issuing wake-up packs will be much more congested going forward.
If packs do not have to be issued because another has already been sent out in the previous 12 months, this is likely to be relevant in lots of cases.
Moving onto the ‘what’ changes, the big development for the wake-up packs is the removal of focus on the ‘Your pension – it’s time to choose’ factsheet, as currently owned by the Money Advice Service.
The factsheet will still be required in most instances, but will now be accompanied by a single page summary of key information about the pension, as well as a number of risk warnings.
The key information included in the single page summary will have to include, among other things, the value of the client’s pension savings, the amount of contributions paid to the scheme in the last year, and the client’s given retirement date.
Key from an adviser perspective is that the summary must also include a prominent section regarding the availability of, and how to access, the government’s Pension Wise service.
This must be included, even if the provider knows that the customer is advised.
The risk warnings issued to clients must be based on the main risk factors associated with their exercise of open market options, with the specific warnings given to the client based on information the provider holds about the client.
The provider must also explain what assumptions were used to prepare the risk warnings and the personal data it used when deciding which to provide.
As with the key information, the risk warnings must be provided to your client regardless of whether they are advised.
If the risk warnings are issued between 10 weeks before the client hits 55 and seven months before they hit their intended retirement date, they must include a statement that accessing pension savings at this point may not be the best option, even where they are being issued because you have advised your client to access those savings.
The requirement to issue risk warnings at the point a customer first accesses their pension also creates an interesting anomaly. Some individuals will be provided with ‘OMO-related’ risk warnings as part of this process, as well as potentially having to answer risk questions and be provided with risk warnings related to their answers to those risk questions as part of the same process.
Impact for advisers
At a very basic level, the key point for advisers to understand is that the need to issue wake-up packs in a far greater number of circumstances than has previously been the case is a provider requirement.
