Source · Select Committees · Work and Pensions Committee
Recommendation 7
7
Paragraph: 34
Hybrid products which provide a ready-made mix of lump-sums, drawdown and annuities can be complicated...
Conclusion
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.
Paragraph Reference:
34
Government Response
Acknowledged
HM Government
Acknowledged
The principle of joint consultations, where appropriate, underpins the work of TPR and FCA and the Department supports this goal wherever opportunities permit. Since the publication of their joint strategy, TPR and the FCA have worked more collaboratively in exploring issues and where appropriate, they have consulted jointly on regulatory matters. For example, in the last 12 months they have consulted on a discussion paper on value for money, looking at how to develop a consistent approach to assessment of value across the industry. They also launched a call for input on the consumer journey 8 Government and Financial Conduct Authority Responses to the Committee’s Fifth Report to explore what more they, as regulators, in partnership with industry, can do to encourage savers to better engage with their pension saving. Where initiatives might vary in scope or timelines between the regulators it is not because they haven’t been thought of collegiately, but because of the real and practical differences between the make-up of the markets they regulate. Both regulators aim to achieve alignment where appropriate and whilst there may be some differences in approach, both are seeking the same outcomes. DWP intend to issue a call for evidence in May to consider what members of trust-based schemes want in terms of information, support and possibly products to support them make informed decisions about how they access and use their pension savings. Both regulators have been involved in the development of the call for evidence. DWP is grateful for TPR’s support for our plans to publish a call for evidence on decumulation within occupational pension schemes to explore if there should be new duties for trustees relating to decumulation, including whether there is a need to implement investment pathways. Both TPR and the FCA have shared findings from their joint Consumer Journeys call for input with DWP to inform this work. DWP is also grateful for TPR’s support on the alignment of wake-up packs with the changes that the FCA implemented in 2019.