Financial advisers look set to pay around £4million for the cost of the new pensions guidance service in its second year.
The Treasury has announced an estimate for the running of the scheme – revealed today as being named Pension Wise - as £35m for 2015/16.
The ongoing cost will be funded by an FCA administered levy on regulated financial services firms.
The Treasury will pay the set up costs for the first year, starting from April.
The FCA said in November that the A13 funding block comprising advisory arrangers, dealers or brokers would pay 12% rather than the originally proposed 30%, following a consultation. This would equate to advisers paying about £4.2m for 2015/16.
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An HM Treasury report stated today: "The initial estimate of the cost in 2015/16 is £35m; this will be confirmed in March, in the FCA's fees consultation paper.
"The operation of any service in its first year naturally carries a higher than usual degree of uncertainty. This is especially true here, given the number of people who have deferred a pension decision in 14/15 and may wish to access the guidance alongside those coming up to that decision point during the year itself.
"Rather than incorporate a contingency element into the initial levy, HM Treasury has decided to cover any costs above the levy value itself in the first instance, and reclaim these from the subsequent year's levy (consistent with the policy that the service should be funded by industry).
"This ensures both that the industry will only be asked to pay for what it can be said with confidence is required to fund the service, and that incentives to deliver an effective, efficient service, providing value for money, are fully aligned."
A public pilot of the online guidance service is planned to start in February.
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