Recommendations & Conclusions
33 items
1
Conclusion
Fifth report - Protecting pension saver…
Acknowledged
The pension freedoms gave people the freedom to choose what to do with their money. On balance these changes have been a success and we do not want to see them rolled back. However, many savers need more support than they currently receive in order to make good decisions about …
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The pension freedoms gave people the freedom to choose what to do with their money. On balance these changes have been a success and we do not want to see them rolled back. However, many savers need more support than they currently receive in order to make good decisions about how they access their pension savings.
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Government response AI summary
The government acknowledges the need for more support for savers and lists ongoing measures like Pension Wise, Pensions Dashboards, Mid-life MOT, and Stronger Nudge, without committing to any new specific action.
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Department for Work and Pensions
2
Recommendation
Fifth report - Protecting pension saver…
Rejected
Making pensions decisions is complicated. The continued movement from DB to DC, together with auto-enrolment and the increased number of jobs that one person will have over a working lifetime, mean that without intervention decision-making will become more complicated still. The Government and regulators have a role to play in …
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Making pensions decisions is complicated. The continued movement from DB to DC, together with auto-enrolment and the increased number of jobs that one person will have over a working lifetime, mean that without intervention decision-making will become more complicated still. The Government and regulators have a role to play in ensuring that savers have the information and support they need to make good decisions about what they do with their pension savings. We recommend that the Government and regulators should play a more active role than they did when the pension freedoms were first introduced.
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Government response AI summary
The government does not believe it is appropriate to make changes to tax policy related to the Pension Commencement Lump Sum (PCLS) due to concerns about members accessing their lump sum earlier without advice and potential negative impacts on retirement outcomes, but will issue a …
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Department for Work and Pensions
3
Conclusion
Fifth report - Protecting pension saver…
Deferred
The Minister for Pensions told us that the Department for Work and Pensions is trying to make pensions simpler. We support this principle. But simplicity alone is not enough to improve outcomes for savers. The Government and regulators will either need to increase saver engagement—encouraging and enabling savers to make …
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The Minister for Pensions told us that the Department for Work and Pensions is trying to make pensions simpler. We support this principle. But simplicity alone is not enough to improve outcomes for savers. The Government and regulators will either need to increase saver engagement—encouraging and enabling savers to make their own decisions—or take a more interventionist approach with passive savers to ensure that they do not default to a decision against their best interest. (Paragraph 12) Options when accessing pensions
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Government response AI summary
The government is deferring the response to MaPS and the FCA.
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Department for Work and Pensions
4
Recommendation
Fifth report - Protecting pension saver…
Not Addressed
People can usually take up to 25% of their pension as a tax-free lump sum. This is one of the most well-known UK pension policies and leads to many people who access their pensions for the first time taking poor decisions about the remaining 75%. We heard persuasive arguments both …
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People can usually take up to 25% of their pension as a tax-free lump sum. This is one of the most well-known UK pension policies and leads to many people who access their pensions for the first time taking poor decisions about the remaining 75%. We heard persuasive arguments both for and against decoupling the 25% of a pension pot which is tax free from the rest of the pot. The best way to assess these arguments is through further research and testing. We recommend that regulators should carry out a scoping exercise to establish the research and testing which could be undertaken on decoupling the 25% of a pension pot which is tax free from the rest of the pot and present their findings to our Committee.
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Government response AI summary
The government response focuses on Collective Defined Contribution (CDC) schemes and doesn't address the recommendation to research decoupling the tax-free portion of pension pots. It is therefore not addressed.
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Department for Work and Pensions
5
Conclusion
Fifth report - Protecting pension saver…
Not Addressed
We were told that most savers want a reliable income in retirement. Annuities provide this for savers with defined contribution pensions, but have dramatically fallen in use since the introduction of pension freedoms. The transition from defined benefit schemes to defined contribution schemes means that fewer people will have occupational …
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We were told that most savers want a reliable income in retirement. Annuities provide this for savers with defined contribution pensions, but have dramatically fallen in use since the introduction of pension freedoms. The transition from defined benefit schemes to defined contribution schemes means that fewer people will have occupational pensions which provide a guaranteed income in future and therefore we expect there to continue to be a demand for annuities or annuity-like products.
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Government response AI summary
The government's response discusses the code of practice for CDC pension schemes instead of addressing the observation about the decline in annuity use. Therefore it is not addressed.
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Department for Work and Pensions
6
Recommendation
Fifth report - Protecting pension saver…
Deferred
Many more people than currently do, however, would benefit from making greater use of the pension freedoms by choosing a mix of annuities, lump sums and drawdown Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings 61 rather than a single product. For example, a person may …
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Many more people than currently do, however, would benefit from making greater use of the pension freedoms by choosing a mix of annuities, lump sums and drawdown Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings 61 rather than a single product. For example, a person may wish to withdraw a lump sum when they first access their pension, later choose to use drawdown flexibly before finally choosing an annuity in later life.
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Government response AI summary
The government states that the FCA will be responding to the recommendation separately.
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Department for Work and Pensions
7
Conclusion
Fifth report - Protecting pension saver…
Acknowledged
Hybrid products which provide a ready-made mix of lump-sums, drawdown and annuities can be complicated and costly. We believe that a personalised mix of retirement products would better meet the needs of savers. However, these options will be difficult for savers to choose themselves without thorough guidance and most savers …
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Hybrid products which provide a ready-made mix of lump-sums, drawdown and annuities can be complicated and costly. We believe that a personalised mix of retirement products would better meet the needs of savers. However, these options will be difficult for savers to choose themselves without thorough guidance and most savers would likely need paid-for advice, which gives a personalised recommendation, to choose a suitable mix of products.
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Government response AI summary
The government acknowledges the importance of joint consultations between TPR and FCA and supports this goal where opportunities permit, citing examples of collaborative work. DWP intends to issue a call for evidence in May to consider what members of trust-based schemes want in terms of …
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Department for Work and Pensions
8
Recommendation
Fifth report - Protecting pension saver…
Deferred
We recommend that the Money and Pensions Service and the Financial Conduct Authority should develop proposals to increase the number of people choosing a mix of retirement products—including cash, drawdown and deferred annuities—to meet their changing needs at different stages of later life.
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We recommend that the Money and Pensions Service and the Financial Conduct Authority should develop proposals to increase the number of people choosing a mix of retirement products—including cash, drawdown and deferred annuities—to meet their changing needs at different stages of later life.
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Government response AI summary
The DWP intends to issue a call for evidence in May 2022 to inform whether policy interventions are necessary to support savers in occupational pension schemes, before considering introducing default retirement pathways.
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Department for Work and Pensions
9
Conclusion
Fifth report - Protecting pension saver…
Deferred
The Pension Schemes Act 2021 enabled collective defined contribution (CDC) schemes, which provide retirement incomes from a collective fund. The income from the fund received by members varies depending on how the fund performs. There is demand for the further development of CDC schemes in future and it is therefore …
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The Pension Schemes Act 2021 enabled collective defined contribution (CDC) schemes, which provide retirement incomes from a collective fund. The income from the fund received by members varies depending on how the fund performs. There is demand for the further development of CDC schemes in future and it is therefore right that the Government continues to support this. We welcome the Government’s intention to start consultations on master trust and multi-employer CDC schemes later this year.
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Government response AI summary
The FCA will be responding to this recommendation separately.
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Department for Work and Pensions
10
Recommendation
Fifth report - Protecting pension saver…
Rejected
The Royal Mail CDC scheme is likely to be the first of its kind under the Pension Schemes Act 2021. We anticipate other employers and organisations will want to learn from this scheme. We recommend that the Government publishes a framework for assessing the success of this and other early …
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The Royal Mail CDC scheme is likely to be the first of its kind under the Pension Schemes Act 2021. We anticipate other employers and organisations will want to learn from this scheme. We recommend that the Government publishes a framework for assessing the success of this and other early schemes.
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Government response AI summary
The government does not support setting a goal for the combined use of Pension Wise and paid-for advice when accessing pots for the first time. It encourages MaPS to evolve the Pension Wise service.
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Department for Work and Pensions
11
Recommendation
Fifth report - Protecting pension saver…
Rejected
We recommend that the Pensions Regulator works with the Royal Mail to develop a toolkit for other employers looking to set up similar schemes.
Government response AI summary
The government disagrees with the proposal to automatically book Pension Wise appointments, citing issues with the approach, and says it is considering further encouraging early engagement with pensions guidance.
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Department for Work and Pensions
12
Recommendation
Fifth report - Protecting pension saver…
Deferred
For CDC schemes to provide a realistic alternative to annuities, people with defined contribution pension pots need the option to be able to transfer to decumulation- only CDC schemes. In future these may be available through master-trusts regulated by the Pensions Regulator. We recommend that the Financial Conduct Authority consider …
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For CDC schemes to provide a realistic alternative to annuities, people with defined contribution pension pots need the option to be able to transfer to decumulation- only CDC schemes. In future these may be available through master-trusts regulated by the Pensions Regulator. We recommend that the Financial Conduct Authority consider whether there is also a case for developing contract-based CDC schemes and publish its findings. (Paragraph 53) Supporting decision making at the point of access
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Government response AI summary
The government will consider the recommendation in more detail, noting a Pensions Policy Institute DC data project and ongoing consultation on Pensions Dashboards Regulations, but does not commit to any specific action at this time.
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Department for Work and Pensions
13
Recommendation
Fifth report - Protecting pension saver…
Accepted
Measures are in place for contract-based schemes to offer investment pathways, but equivalent measures are some way off for trust-based schemes and their final form may differ. This is not an isolated case of different measures being in place for contract-based and trust-based schemes without a clear rationale. We are …
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Measures are in place for contract-based schemes to offer investment pathways, but equivalent measures are some way off for trust-based schemes and their final form may differ. This is not an isolated case of different measures being in place for contract-based and trust-based schemes without a clear rationale. We are disappointed that yet again the two pension regulators dealing with savers in near identical positions have failed to coordinate their work resulting in unnecessary risk for members of trust-based schemes and the pension landscape being more confusing than necessary. We recommend that all consultations covering pension 62 Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings regulation should be run jointly by the Pensions Regulator and the Financial Conduct Authority unless there is a clear and published reason for a different approach.
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Government response AI summary
The government states that HM Treasury works closely with the FCA to ensure that the financial advice market works well, competitively and fairly for both firms and consumers, and that the advice being provided is of high quality, including for pensions advice.
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Department for Work and Pensions
14
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
The Department for Work and Pensions and the Pensions Regulator are developing proposals for equivalent measures to investment pathways for trust-based schemes. We recommend that investment pathways should have the same form for contract- based and trust-based schemes.
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The Department for Work and Pensions and the Pensions Regulator are developing proposals for equivalent measures to investment pathways for trust-based schemes. We recommend that investment pathways should have the same form for contract- based and trust-based schemes.
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Government response AI summary
The government states that amending the level of PAA would depend on changes being made. The government continues to monitor the uptake of the PAA to understand the success of the scheme and is keeping the level under review.
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Department for Work and Pensions
15
Recommendation
Fifth report - Protecting pension saver…
Deferred
There is a charge cap for savers who default to a scheme through auto-enrolment. We recommend that there should be a similar charge cap for non-advised savers choosing a decumulation product through investment pathways. The Financial Conduct Authority should report on this as part of its upcoming review on investment …
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There is a charge cap for savers who default to a scheme through auto-enrolment. We recommend that there should be a similar charge cap for non-advised savers choosing a decumulation product through investment pathways. The Financial Conduct Authority should report on this as part of its upcoming review on investment pathways.
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Government response AI summary
The government states that the FCA will be responding to this recommendation separately.
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Department for Work and Pensions
16
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
Pension Wise is a well-regarded but under-utilised service. The pension freedoms will be seen as a failure if savers make poor decisions without receiving the guidance they were promised when the freedoms were introduced. The Minister for Pensions and Financial Inclusion’s previous agreement that having a Pension Wise appointment should …
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Pension Wise is a well-regarded but under-utilised service. The pension freedoms will be seen as a failure if savers make poor decisions without receiving the guidance they were promised when the freedoms were introduced. The Minister for Pensions and Financial Inclusion’s previous agreement that having a Pension Wise appointment should be “the norm” was welcome, but he has since distanced himself from this view. Neither the Minister nor regulators would tell us what they thought the usage levels of Pension Wise should be. It is clearly unrealistic to expect Pension Wise usage to be universal—some people will already have taken paid-for advice or had an earlier appointment for guidance—but that should not be a barrier to setting a stretching target for increasing take up. We recommend that the Government sets a goal for the Money and Pensions Service for the combined use of Pension Wise and paid-for advice when accessing pension pots for the first time. This goal should be at least 60 per cent and expressed in terms of individuals rather than pots. It could include an exemption for smaller levels of saving.
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Government response AI summary
The government supports MaPS’ guidance transformation strategy, which will seek to triage members towards the guidance service most appropriate for them and increase the flexibility of Pension Wise so that it may more be more effectively tailored towards an individual’s needs.
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Department for Work and Pensions
17
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
The “stronger nudges” towards guidance being proposed by the Department for Work and Pensions and the Financial Conduct Authority will not be enough to make receiving pensions guidance the norm. The Money and Pensions Service told us that it would support a trial of automatic Pension Wise appointments and we …
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The “stronger nudges” towards guidance being proposed by the Department for Work and Pensions and the Financial Conduct Authority will not be enough to make receiving pensions guidance the norm. The Money and Pensions Service told us that it would support a trial of automatic Pension Wise appointments and we can see no clear barrier to doing this. The Minister for Pensions and Financial Inclusion has expressed reservations about introducing automatic appointments—but those could be tested by a trial. We recommend that automatic Pension Wise appointments are trialled. The Government should initiate two trials: one with an appointment when a person accesses their pension for the first time and another at the age of 50, before they can access their pension savings.
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Government response AI summary
The government did not commit to trialling automatic Pension Wise appointments, but mentioned that TPR and the FCA promote the tools available from MoneyHelper and will continue to work with partners to promote guidance services.
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Department for Work and Pensions
18
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
Many savers have multiple pension pots with different providers and schemes. At the moment, it is not possible for providers and regulators to aggregate data on individual savers, rather than individual pension pots. This makes it more difficult to ensure that savers are getting the advice they need. We recommend …
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Many savers have multiple pension pots with different providers and schemes. At the moment, it is not possible for providers and regulators to aggregate data on individual savers, rather than individual pension pots. This makes it more difficult to ensure that savers are getting the advice they need. We recommend that aggregating and individual savers, rather than pots, becomes a key priority for the FCA, the Pensions Regulator and the Department for Work and Pensions. As a matter of urgency, so as not to delay the programme, the Department for Work and Pensions should work with the Pensions Dashboard Programme to establish whether pensions dashboards may be a route for doing this. (Paragraph 76) Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings 63
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Government response AI summary
The Government agrees that digital tools have an important role and encourages MaPS to go further in developing its digital offer, supporting MaPS' guidance transformation strategy, but notes some people may need additional support.
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Department for Work and Pensions
19
Recommendation
Fifth report - Protecting pension saver…
Deferred
Advice is a personalised recommendation that can only be provided by a regulated firm at a cost. Few people seem to be willing to pay for financial advice for the decisions they make about their pension savings—even though doing so could significantly improve their financial situation. More people would benefit …
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Advice is a personalised recommendation that can only be provided by a regulated firm at a cost. Few people seem to be willing to pay for financial advice for the decisions they make about their pension savings—even though doing so could significantly improve their financial situation. More people would benefit from regulated advice before accessing their pensions than currently use it. We recommend that the Government should report annually on progress and plans to increase the uptake of pensions advice.
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Government response AI summary
The government defers action on reporting annually on progress to increase the uptake of pensions advice, stating that transactions should not be enabled on dashboards initially and future enhancements to dashboards functionality should be decided after the initial offer has been tested with users.
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Department for Work and Pensions
20
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
The Pension Advice Allowance allows £500 to be withdrawn from a pension up to three times in different tax years for advice. Either because of a lack of awareness or lack of demand the policy is not working. Its design has made it unusable by most savers. We believe that …
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The Pension Advice Allowance allows £500 to be withdrawn from a pension up to three times in different tax years for advice. Either because of a lack of awareness or lack of demand the policy is not working. Its design has made it unusable by most savers. We believe that the broad aim of the policy is correct, but it has been poorly executed. We recommend a full review and overhaul of the Pensions Advice Allowance (PAA). The Government should: a) Remove the annual limit on the PAA b) Uprate the overall PAA in line with inflation each year c) Encourage MaPS and advisers to signpost the PAA d) Explore triage options to avoid use of the PAA by those for whom it is poor value, such as many DB savers or those with small pension pots.
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Government response AI summary
The government acknowledges the issue of deferred small pots and describes existing actions like Pensions Dashboards, Simpler Annual Benefit Statements and a de minimis on flat fee charges. They are working with an industry group to develop automated consolidation solutions but do not directly address …
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Department for Work and Pensions
21
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
The line between advice and guidance is a continuing issue of debate. There is demand for both enhanced guidance and limited advice, but there is reluctance from the industry to operate too close to the advice/guidance boundary and resistance to such services being offered by the Money and Pensions Service, …
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The line between advice and guidance is a continuing issue of debate. There is demand for both enhanced guidance and limited advice, but there is reluctance from the industry to operate too close to the advice/guidance boundary and resistance to such services being offered by the Money and Pensions Service, both because of the likely additional cost and regulatory requirements. We recommend that the Financial Conduct Authority uses the definitions below of enhanced guidance and limited advice: a) Enhanced guidance: guidance on the options available which is tailored to an individual dependent on the information they provide, without a recommendation. This is not a regulated activity. b) Limited advice: a recommendation made to an individual based on limited or partial information about them. The Financial Conduct Authority should provide examples to the industry to encourage the wider offering of enhanced guidance and limited advice to the fullest extent allowed by the existing law.
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Government response AI summary
The government states that individuals using dashboards will be able to delegate access to MaPS guiders or authorized financial advisers and that the MaPS dashboard will be integrated into the MaPS retirement planning hub to better tailor guidance interventions.
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Department for Work and Pensions
22
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
We recommend that the Money and Pensions Service offers enhanced guidance, under our proposed definition, through its pensions services. We also recommend that the Money and Pensions Service establishes an industry group to develop best practice proposals and templates for offering enhanced pensions guidance.
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We recommend that the Money and Pensions Service offers enhanced guidance, under our proposed definition, through its pensions services. We also recommend that the Money and Pensions Service establishes an industry group to develop best practice proposals and templates for offering enhanced pensions guidance.
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Government response AI summary
The government welcomes the industry-led campaign for Pensions Engagement Season and states they will continue to look at ways that they can prompt people to engage with their pensions, including what role annual benefit statements can play.
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Department for Work and Pensions
23
Recommendation
Fifth report - Protecting pension saver…
Accepted in Part
Pension savers will often look first to their scheme or employer for support when making decisions about their pension savings. Schemes and employers should play an active role in providing guidance and signposting advice to their members and employees. Many large schemes and employers already do this. We recommend 64 …
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Pension savers will often look first to their scheme or employer for support when making decisions about their pension savings. Schemes and employers should play an active role in providing guidance and signposting advice to their members and employees. Many large schemes and employers already do this. We recommend 64 Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings that the Pensions Regulator, Financial Conduct Authority and Money and Pensions Service produce a plan to increase the number of schemes and employers using the tools they provide. As far as is possible they should aim for consistency across trust- based and contract-based pension savings. The plan should stress the importance of scheme members shopping around before deciding to buy a new product from their incumbent provider.
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Government response AI summary
The government is working with the Money and Pensions Service to test and develop a financial Mid-life MOT, building on previous tests and examples, and will trial Midlife MOT activity in Jobcentres and the private sector to help older workers plan their career and remain …
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Department for Work and Pensions
24
Conclusion
Fifth report - Protecting pension saver…
Not Addressed
Most guidance is currently delivered by individuals, which is costly, or through written communication, which is unengaging. In future we envisage a significant proportion of guidance or triage services will be delivered through digital tools. This should be a key consideration in the implementation of the recommendations we have made …
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Most guidance is currently delivered by individuals, which is costly, or through written communication, which is unengaging. In future we envisage a significant proportion of guidance or triage services will be delivered through digital tools. This should be a key consideration in the implementation of the recommendations we have made to regulators and the Money and Pensions Service. (Paragraph 103) Pensions dashboard
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Government response AI summary
The government acknowledges the benefits of consultation and announces that the NMPA will rise to 57 in April 2028. This does not address the need for digital tools in guidance, so is classified as not addressed.
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Department for Work and Pensions
25
Conclusion
Fifth report - Protecting pension saver…
Acknowledged
Pensions dashboards will let people see all of their pensions on a digital platform. This has the potential to be the most influential policy in helping people take good decisions when they first access their pension pots. To be successful, pension dashboards will need correct and up to date data …
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Pensions dashboards will let people see all of their pensions on a digital platform. This has the potential to be the most influential policy in helping people take good decisions when they first access their pension pots. To be successful, pension dashboards will need correct and up to date data from every pension scheme. This is a huge undertaking. It is vital that the pension dashboards programme continues to be properly resourced to get the implementation of dashboards right. Too often pension policies have been undermined by bad data.
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Government response AI summary
The government agrees that pensions dashboards offer a significant opportunity and are working closely with regulators, pension providers, and administrators on this issue.
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Department for Work and Pensions
26
Recommendation
Fifth report - Protecting pension saver…
Accepted
When pension dashboards launch it will not be possible to undertake any transactions through them. We understand why some people are calling for transactions to be facilitated through pension dashboards. However, with dashboards a long way from reality and a need to build trust in the system, we recommend that …
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When pension dashboards launch it will not be possible to undertake any transactions through them. We understand why some people are calling for transactions to be facilitated through pension dashboards. However, with dashboards a long way from reality and a need to build trust in the system, we recommend that no consideration is given to allowing transactions through dashboards until they are well established.
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Government response AI summary
The government states that individuals using dashboards can delegate access to MaPS guiders or authorised financial advisers, and the MaPS dashboard will be integrated into the MaPS retirement planning hub.
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Department for Work and Pensions
27
Conclusion
Fifth report - Protecting pension saver…
Acknowledged
Many savers will have built up a number of small pension pots, which would benefit from consolidation. However, the issue of small pension pots cannot be solved simply by encouraging savers to change their behaviour to proactively consolidate their small pension pots. The Committee would expect to look closely at …
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Many savers will have built up a number of small pension pots, which would benefit from consolidation. However, the issue of small pension pots cannot be solved simply by encouraging savers to change their behaviour to proactively consolidate their small pension pots. The Committee would expect to look closely at the recommendations about consolidating small pension pots which are expected to be made to the Department for Work and Pensions by an industry working group as they are developed and published.
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Government response AI summary
The department is working closely with the ABI/PLSA-led industry coordination group on consolidating small pension pots and expects a progress report in May 2022.
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Department for Work and Pensions
28
Recommendation
Fifth report - Protecting pension saver…
Accepted
Pensions dashboards will change how people engage with their pension savings. Dashboards will also provide an important additional tool which can be used by those providing guidance or advice to savers. We recommend that the Money and Pensions Service should develop a guidance service—possibly a future iteration of Pension Wise …
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Pensions dashboards will change how people engage with their pension savings. Dashboards will also provide an important additional tool which can be used by those providing guidance or advice to savers. We recommend that the Money and Pensions Service should develop a guidance service—possibly a future iteration of Pension Wise or the midlife MOT—which supports savers by using the data available through their pensions dashboards. It is important that these services are considered now, before dashboards are launched. (Paragraph 112) Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings 65 Supporting decision-making before accessing pension savings
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Government response AI summary
The Money and Pensions Service (MaPS) dashboard will be integrated into the MaPS retirement planning hub to tailor guidance interventions according to individual needs and will help savers to see in one place what they have and help facilitate a Pension Wise appointment.
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Department for Work and Pensions
29
Conclusion
Fifth report - Protecting pension saver…
Accepted
The simpler annual pension statement will require schemes to show information to members in a consistent way across the industry. We welcome the simpler annual pension statement and believe it will be particularly beneficial to people with many pension pots.
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The simpler annual pension statement will require schemes to show information to members in a consistent way across the industry. We welcome the simpler annual pension statement and believe it will be particularly beneficial to people with many pension pots.
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Government response AI summary
The government has recently introduced Regulations to make Annual Benefit Statements for defined contribution schemes simpler and easier to understand.
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Department for Work and Pensions
30
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
A pension statement season would be a short period each year when schemes were required to send savers annual pension statements. We are not convinced that the gains from a statement season will justify the complexity of introducing it. In our view, the measure is at best a stopgap until …
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A pension statement season would be a short period each year when schemes were required to send savers annual pension statements. We are not convinced that the gains from a statement season will justify the complexity of introducing it. In our view, the measure is at best a stopgap until pension dashboards are available. Given the likely cost and disruption to the industry, we recommend that the Government be prepared to adapt or drop its proposal for a pension statement season if the benefits cannot be robustly demonstrated.
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Government response AI summary
The government acknowledges the challenges of delivering a statement season and states they will continue to look at ways to prompt people to engage with their pensions, but offers no specific action beyond welcoming the industry-led Pensions Engagement Season.
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Department for Work and Pensions
31
Recommendation
Fifth report - Protecting pension saver…
Accepted
The midlife MOT is free support for people in their 40s, 50s and 60s to make plans about work, wellbeing and money. We welcome the principle of a midlife MOT, but believe that the policy is not yet providing the support envisaged for most savers. For the “my money” part …
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The midlife MOT is free support for people in their 40s, 50s and 60s to make plans about work, wellbeing and money. We welcome the principle of a midlife MOT, but believe that the policy is not yet providing the support envisaged for most savers. For the “my money” part of the midlife MOT, we recommend that the Department for Work and Pensions, supported by the Money and Pensions Service, undertakes research to: a) Develop the most effective format(s) for midlife MOTs; b) Establish the most efficient delivery route for midlife MOTs; and c) Maximise the take up of the midlife MOT. (Paragraph 124) Wider government policy
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Government response AI summary
The department claims to be already working closely with the Money and Pensions Service, supported by the wider Mid-life MOT Board, to test both the most effective format(s) for Mid-life MOTs and the most efficient delivery route for Mid-life MOTs, building on the findings of …
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Department for Work and Pensions
32
Recommendation
Fifth report - Protecting pension saver…
Acknowledged
We support the Government’s intention to make pensions simpler. Recent policy changes to the normal minimum pension age have highlighted the difficulties of achieving this and we are disappointed that these changes have made making decisions about accessing pensions even more difficult. Savers take a working lifetime to build up …
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We support the Government’s intention to make pensions simpler. Recent policy changes to the normal minimum pension age have highlighted the difficulties of achieving this and we are disappointed that these changes have made making decisions about accessing pensions even more difficult. Savers take a working lifetime to build up pension savings, through many changes of policy and government. We urge the Government to do everything in its power to ensure that future changes do not bake additional complexity into the system for decades to come. Where additional complexity is inescapable, we recommend that any Government consults early, thoroughly and aims to achieve cross-party consensus.
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Government response AI summary
The government acknowledges the benefits of timely and thorough consultation and achieving cross-party consensus where possible. They cite consultations regarding the NMPA increase as evidence of this approach, while protecting existing rights.
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Department for Work and Pensions
33
Recommendation
Fifth report - Protecting pension saver…
Accepted
The Government, regulators and the Money and Pensions Service are introducing multiple policy interventions to support the pension freedoms. Six years on there remains no framework against which to evaluate the success of the freedoms or make judgements about the need for—or effectiveness of—support interventions. Our predecessor Committees have asked …
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The Government, regulators and the Money and Pensions Service are introducing multiple policy interventions to support the pension freedoms. Six years on there remains no framework against which to evaluate the success of the freedoms or make judgements about the need for—or effectiveness of—support interventions. Our predecessor Committees have asked three times for the Government to improve its monitoring and reporting on the progress of the pension freedoms. We recommend that the Department for Work and Pensions and the Treasury jointly produce an annual assessment evaluating these measures holistically. We would expect several of the recommendations we have made in this report to appear in that publication, 66 Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings including: usage of Pension Wise and paid for advice, the progress of reviews and research being undertaken by regulators, the state of policy development by the Government, and the support available to individuals and schemes. (Paragraph 131) Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings 67
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Government response AI summary
The government asserts they are already committed to providing savers with information and support. They cite the call for evidence, Pension Wise, pensions dashboards, Simpler Annual Benefit Statement, Mid-life MOT initiative and Stronger Nudge policy as existing measures and will continue to review ways to …
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Department for Work and Pensions