MSE News

Accessing your pension for the first time or transferring it? You'll now be offered a free Pension Wise guidance session 

If you’re aged 55 or over and have a UK-based workplace or private pension pot that you've paid into that you want to access for the first time or transfer elsewhere, you must now be offered guidance from the free impartial Government service, Pension Wise.

From today (1 June 2022), many pension providers must now tell you about the Pension Wise guidance service, which offers a free 45-minute appointment – in person or over the phone – to talk through your retirement options. The idea behind it is to try to prevent you from making a bad financial decision when accessing your pension - see our guide on Pension liberation for more info on this. 

But while this service is impartial, it doesn't constitute financial advice - only guidance. Pension Wise can't recommend products or providers, and it can only talk you through possible options for your pension, rather than telling you what you should do with it. It will, however, highlight the importance of understanding the tax implications of accessing your pension, as well as warning you about scams.

If you need more detailed help, you may want to consider picking and paying for an independent financial adviser instead.

Here's who will be offered the new service 

The new service will be made available to anyone accessing for the first time or considering transferring the following types of pension:

  • A defined contribution (DC) pension (which is a type of pension you contribute towards). 
  • Personal or stakeholder pensions (a type of defined contribution scheme), including self-invested personal pensions (SIPPs - a DIY personal pension that allows you to choose your own investments).  

However, while it's compulsory for pension providers to tell you about the service, you can choose to decline the offer - which will be recorded by your pension provider. If you decline, you can still access or move your pension as planned though you may want to consider taking independent financial advice from an alternative source beforehand. 

The service isn't available to those accessing or transferring out of "defined benefit (DB)" pensions, which are typically based on your final salary and years of service rather than your own contributions. In this instance, you'll need to speak to an independent financial adviser for help. See our Pension need-to-knows for full info on the different types of pension available and how they work.   

How to book an appointment

Your pension provider will have to offer to book the Pension Wise appointment for you, or give you enough information for you to book it yourself, and this must be done BEFORE you complete an application to access or move your pension.

You don’t have to wait for your pension provider to tell you about this service though, you can book an appointment yourself, as long as you’re over 50 - though bear in mind you usually can't take anything out of your pension before you're 55.

Call Pension Wise for free on 0800 138 3944 between 8am and 8pm, Monday to Friday or use the online booking form

Even if you've used the service before, you can get a free appointment again if your circumstances have changed since the last appointment.

You can also use the service to discuss the pension options of a family member or friend, but you need to get verbal or written consent from that person. If you have a power of attorney for someone, you'll need to show a copy of this before you can discuss their pension options.

What to research before your first appointment

If you have more than one pension pot, remember to gather information on all your pension schemes before your Pension Wise appointment. If you’ve lost track of any pensions, you can use the Pension Tracing Service, which is a free Government-backed service, to try to locate them.

It's also useful to get an estimate of how much state pension you might get, so check your state pension forecast.

Make sure you understand how you might be taxed when accessing your pension for the first time. Check out our guide on reclaiming pension tax if you end up paying too much.

Pension Wise is a free Government-backed service so make sure you don't pay for this guidance and beware of scammers trying to jump on the back of it. See our 30 ways to stop scams guide for full info. 

MSE weekly email

FREE weekly MoneySaving email

For all the latest deals, guides and loopholes simply sign up today – it's spam-free!