Select committee: Work and Pensions Committee
Conclusion 3
Fifth report - Protecting pension savers—five years on from the Pension Freedoms: Accessing pension savings
Published 18 Jan 2022
Paragraph 12
Addressed to Department for Work and Pensions
Work and Pensions Committee Protecting pension savers – five years on from the Pension Freedoms: Accessing pension savings All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
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.
From: Work and Pensions Committee, Fifth report - Protecting pension savers—five years on from the Pension Freedoms: Accessing pension savings (HC 237), paragraph 12, 18 January 2022
Government response
The government responded to the whole report on 27 April 2022 (deadline 18 March 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government "notes" the Committee's report, commits to a call for evidence in May 2022 on occupational scheme decumulation, and declines several recommendations, including automatic Pension Wise bookings, a usage goal and annual reporting.
- On Pension Wise, the government "disagree[s] with the proposal to automatically book Pension Wise appointments", citing risks of inappropriate guidance and disengagement; it does "not support setting a goal" for combined use of Pension Wise and paid-for advice.
- It commits to a Stronger Nudge, in force from 1 June 2022, requiring schemes to offer to book a Pension Wise appointment for members accessing defined contribution benefits.
- On trust-based schemes, it says it would "not be appropriate" to introduce investment pathways-style requirements until more is known, and DWP intends to issue a call for evidence in May 2022.
- It believes an annual assessment of pension freedoms and annual reporting on pensions advice "is not necessary" at this time, but will "keep this recommendation under review".