Source · Select Committees · Women and Equalities Committee
Recommendation 5
5
Acknowledged
The Government should reform family law to better protect cohabiting couples and their children from...
Recommendation
The Government should reform family law to better protect cohabiting couples and their children from financial hardship in the event of separation. We recommend an opt-out cohabitation scheme as proposed by the Law Commission in its 2007 report on the financial consequences of relationship breakdown. The Government should make a commitment to publishing draft legislation for pre-legislative scrutiny in the 2023–24 Session of Parliament. In the meantime, the Ministry of Justice should commission a refresh review of the Law Commission’s 2007 proposals to see if they need updating. (Paragraph 64) Death of a partner
Government Response Summary
The government accepts the recommendation in principle, but will consider whether non legislative broad guidance would be appropriate, having assessed the matter with the Pensions Regulator and key stakeholders first.
Government Response
Acknowledged
HM Government
Acknowledged
We accept in principle this recommendation. The Government regards the diversity of pension offers as one of the strengths of the UK system. We therefore consider that it should remain up to employers and trustees to determine the right level and shape of benefits to offer, as schemes are best able to make this judgement themselves. The Government, however, appreciates the Committee’s aspiration to see more guidance, enabling citizens to make informed choices. We will thus consider whether non legislative broad guidance would be appropriate, having assessed the matter with the Pensions Regulator and key stakeholders first. Although the rules will vary from scheme to scheme, many occupational schemes provide some form of benefit for dependants in the event of a member’s death. These may be payable to surviving spouses, civil partners or unmarried partners (often with a financial dependency or inter-dependency requirement for the latter), and dependent children, depending on the scheme rules. There are already minimum legal requirements around these schemes, beyond that it would not be right for the Government to mandate their administration as they are provided as part of an employer’s reward and retention strategy. It is for the scheme trustees or managers of individual schemes to determine who is entitled to inheritance rights, the level of these benefits and what information or evidence they need to enable them to pay benefits under the scheme rules. The Government considers this appropriate because schemes need to balance the cost they would incur in providing benefits for survivors and the protection this provides. Money purchase pensions are individual savings pots in the accumulation phase. Members have choices about the way they use that pot in retirement, and they can choose a decumulation vehicle that includes benefits for survivors should they so wish. The Government sees no reason to move away from a system of informed choice in money purchase arrangements.