Recommendation 13

HM Government Acknowledged

The government is committed to continually monitor the use of Pension Wise which now includes the impact of the Stronger Nudge. We will continue to work with MaPS to consider feedback on users’ experience of the service and its impact on their knowledge of the options available to them. The metrics we are using to monitor the use of Pension Wise and the impact of the Stronger Nudge are set out below. To monitor take-up, we use the volume of appointments attended each quarter from MoneyHelper and compare this to periods prior to Stronger Nudge. In July-Sep 2022 there was 20% year-on-year increase in the number of Pension Wise appointments attended which will include some impact of the Stronger Nudge. We also monitor the FCA Retirement Income data which provides the proportion of DC pots accessed in the contract-based market with financial advice or Pension Wise guidance. We already consider how the market for Pension Wise is evolving and trends in the number of DC Protecting pension savers—five years on from the pension freedomss Saving for later lifes overnment, Financial Conduct Authority and Money and Pensions Service esponses to the Committee’s Third eport of Session2022223 3 pots being accessed each year is changing. While we believe it is right for savers to be nudged towards pension guidance, the decision to receive guidance or not should be a personal one, based on individual circumstances. We also do not support the trial of a system by which members are automatically booked a Pension Wise appointment. However, we will consider all options for signposting and nudging individuals to appropriate guidance. We are committed to encouraging people to engage with pensions and plan for their retirement, including by using appropriate guidance. In most cases this will be broader guidance, such as that provided by the mid- life MOT. We are currently introducing three new Mid-life MOT initiatives which will deliver this guidance to a range of different target groups. Pension Wise provides guidance specifically about options for accessing savings through pension freedoms. It is therefore appropriate for those who are considering their options for accessing their savings but is not broad enough for most other circumstances. The Stronger Nudge effectively targets members at the point of deciding whether and how to access their savings. We are committed to gathering evidence and insight and to help support individuals to make decisions appropriate to their circumstances. The Department has recently undertaken the Planning and Preparing for Later Life (PPLL) - a nationally representative survey of 40–75-year-olds in Great Britain - which has provided evidence on how far individuals are able to make well informed decisions about how and when to retire. We published a call for evidence in June to consider the help and support members of trust- based pension schemes should receive when they want to access their pensions savings and we are considering our next steps. Are people saving enough? Recommendation 2: We recommend that, by March 2023, the Government should set out its plans to build a new consensus on what an adequate income in retirement is and what the pensions system should be designed to achieve.