It has only been a few weeks into her new role as AJ Bell’s head of policy development, yet Rachel Vahey already says there is a lot going on.
“It seems to be almost a baptism of fire, taking on this role at this particular moment. There’s certainly so much going on, and there’s so many different elements coming forward, sometimes from different places.
“For example, we have all the Financial Conduct Authority initiatives that we’re looking at like the consumer duty, stronger nudges, non-workplace pensions, the compensation framework. And then we’ve got other things going on as well, like the dashboard.”
From June pension providers will have to give customers a ‘stronger nudge’ to Pension Wise when they decide to access their savings, including offering to book a guidance appointment in most cases.
The rules are one of a series of changes for better pension outcomes that have taken place over Vahey’s 30-year career, including pension freedoms and automatic enrolment – the latter of which she describes as a game changer.
“I think, if anything, we’re going to see progression along these lines. And I’m hoping that really what we see is engagement by people.
“Because at the moment we’ve done step one: we’ve got people saving. You look back now and at the figures of people in their 20s and 30s who are saving in their pension [versus] 10 years ago, and it’s such a difference.
“I think the thing that is going to change now – and I hope that what’s going to change – is that people are no longer scared of a pension, and think about their pension, and actively want to be saving, so it becomes part of normal life that you’re aware of how much you’re saving.
“I hope that’s what’s going to happen and that’s through lots of things that are happening. The dashboard is a really big part of that, I think, to increase that awareness and to make people ‘own’ their pension savings.
“And I think increasingly people will be getting better guidance from a variety of sources, bigger prompts and bigger nudges to think about things. I think all of those things will be changing on the outskirts and all of that means that people will be better engaged.”
Amid the new rules designed to increase the take-up of Pension Wise, Vahey envisages low use of pension guidance becoming a thing of the past.
“The comparison we’ll have is that we’ll say, ‘People didn’t take guidance or they just made decisions about their retirement options, they didn’t do anything’.”
While some fall into financial services, Vahey’s entry into the industry was a purposeful one, starting her career at Scottish Life in the early 1990s in an administration department winding up pension schemes.
