The current proposal for the Guidance Guarantee levy is to raise it from the firms that will potentially benefit from the retirement guidance service. Old Mutual Wealth agrees with this principle but says due to auto-enrolment, the vast majority of defined contribution provision will be through workplace trust schemes. Old Mutual Wealth therefore feels part of the cost of the service should be paid by workplace trust schemes some of who will also provide retirement income facilities.
Where a provider regulated by the FCA also administers occupational schemes, they should be able to opt out of the additional pensions levy amount so that they don’t contribute twice for the service.
Tom Hawkins, Head of UK Proposition Marketing at Old Mutual Wealth, comments:
“We agree that the funding of the service should be borne by those who stand to benefit from the service. However, we do not feel the proposals cast the net widely enough. trust based schemes, regulated by the Pensions Regulator, will also benefit and should pay towards the service via the pensions levy.
“Including trust based schemes will mean a more proportionate method of funding the Guidance Guarantee and potentially reduce the amount borne by financial advisers, which is currently disproportionate.”