Source · Select Committees · Work and Pensions Committee
Recommendation 8
8
Paragraph: 35
We recommend that the Money and Pensions Service and the Financial Conduct Authority should develop...
Recommendation
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.
Paragraph Reference:
35
Government Response
Acknowledged
HM Government
Acknowledged
We acknowledge at present that there is little information on the decumulation products providers offer in the trust-based marketplace. There is also little evidence of engagement with members about the level of support they would want from their pension provider. Until we know more about what is already on offer and the expectations of occupational scheme members it would not be appropriate to simply introduce, into trust-based schemes, similar requirements to investment pathways. That is why DWP intends to issue a call for evidence in May 2022. DWP is grateful to TPR for their commitment to work with us on the call for evidence and for their support for working to explore if there is merit in introducing default retirement pathways for members of occupational pension schemes. Investment pathways was introduced by the FCA as a result of issues they identified in the non-advised drawdown market. This only took effect in February 2021 and it is important to consider findings from the FCA and industry as to its effectiveness. Drawdown and other decumulation options from occupational pension schemes is a less developed market and therefore they agree that a call for evidence will inform whether similar or different policy interventions are necessary to support savers in occupational pension schemes.