Recommendation 11

HM Government Acknowledged

We disagree with the proposal to automatically book Pension Wise appointments. We believe that there are significant issues with this approach, both at age 50 and at the point of first access. It is important to note that Pension Wise is just one of the pensions guidance services offered by MaPS. MaPS also provides pensions guidance through its MoneyHelper pensions guidance helpline. This provides individuals of any age with guidance on all areas of UK pensions, through its phone, email, and webchat service. In addition to the 113,000 Pension Wise appointments attended in 2020–2021, MoneyHelper Pensions helped over 220,000 people. 10 Government and Financial Conduct Authority Responses to the Committee’s Fifth Report Pension Wise guidance is aimed at those who are actively considering how to access their defined contribution pension savings. At age 50, it is likely that most members will not be considering how to access their defined contribution savings. As such, automatically booking members a Pension Wise appointment at age 50, when these members are not the target market for this guidance, is not the right approach. Referring members to Pension Wise at the wrong time also risks a number of negative outcomes. For example, referring members to guidance focused on decumulation, at age 50, may encourage members to access their savings earlier than appropriate for them or may cause disengagement with guidance if interventions are not sufficiently targeted. The Regulations which implement the Stronger Nudge to pensions guidance, which come into force in June 2022, will ensure that members in scope are strongly encouraged to take up Pension Wise guidance before accessing their defined contribution pension benefits. When such a member intends to access their pension, the scheme will be required to offer to book a Pension Wise appointment on the member’s behalf, at a time and date suitable for the member. Where the member wishes to opt out of receiving Pension Wise guidance, they will need to make an active, informed decision to do so, unless an exemption applies. This approach successfully ensures that members will not default out of receiving Pension Wise guidance, and that only those members who have expressed a firm preference not to receive Pension Wise guidance will access their pension without receiving it. The proposal to automatically book members an appointment when they seek to access their pension savings, instead of offering to book members an appointment at a time and date of their choosing as is required by the Stronger Nudge Regulations, would be unlikely to lead to any increased engagement with guidance. It would not successfully utilise inertia, compared to the Stronger Nudge proposals, as members would still need to take action to engage with and attend a Pension Wise appointment. It would also introduce significant additional issues, such as individuals having multiple appointments booked on their behalf, and increased costs caused by missed appointments. Consideration of further possible nudges or referrals to guidance at the point a member requests to access their pension savings should be informed by assessing the success of the Regulations on the Stronger Nudge to pensions guidance. We are actively considering methods of further encouraging early engagement with pensions guidance. It is important to gather evidence and insight to inform future policy measures.