Source · Select Committees · Work and Pensions Committee
Recommendation 13
13
Paragraph: 61
Measures are in place for contract-based schemes to offer investment pathways, but equivalent measures are...
Recommendation
Measures are in place for contract-based schemes to offer investment pathways, but equivalent measures are some way off for trust-based schemes and their final form may differ. This is not an isolated case of different measures being in place for contract-based and trust-based schemes without a clear rationale. We are disappointed that yet again the two pension regulators dealing with savers in near identical positions have failed to coordinate their work resulting in unnecessary risk for members of trust-based schemes and the pension landscape being more confusing than necessary. We recommend that all consultations covering pension 62 Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings regulation should be run jointly by the Pensions Regulator and the Financial Conduct Authority unless there is a clear and published reason for a different approach.
Paragraph Reference:
61
Government Response
Acknowledged
HM Government
Acknowledged
The government recognises the importance of enabling people to make the right financial decisions at all stages in their lives. HM Treasury works closely with the FCA to ensure that the financial advice market works well, competitively and fairly for both firms and consumers, and that the advice being provided is of high quality, including for pensions advice. 12 Government and Financial Conduct Authority Responses to the Committee’s Fifth Report The government already requires individuals who are transferring a DB pension of over £30,000 to take advice before making a transfer. Following the evaluation of the Financial Advice Market Review in December 2020, HM Treasury and the FCA are engaging closely to tackle the remaining policy challenges in the UK’s financial advice market. There is already a considerable amount of reporting that takes place on the functioning of pension freedoms more widely. The FCA publishes Retirement Income Market data annually which reports on a range of pension data, including access rates, use of advice, pension transfers and the types of annuity options sold. Annual reporting on pension freedoms is also published by HMRC, and research has been produced in recent years that specifically examines pension freedoms, including DWP’s qualitative research study of individuals’ decumulation journeys that was published in October 2020. Pension Wise quarterly data and satisfaction surveys similarly show progress of pension freedoms and the individuals using the government’s guidance service. Information specifically on take up of pensions advice is also available and can be shared through existing channels and the range of organisations which support consumers accessing pensions advice. At this time, the government therefore believes that an annual assessment of pension freedoms and annual reporting of its work in relation to pensions advice is not necessary. There are clear challenges to bring together meaningful reporting on an annual basis in addition to what is already available. Further work is also needed on how to provide a valuable evaluation on pension freedoms when taking into account the fact that what is considered an appropriate use of an individual’s retirement provision will vary dependent on individual circumstances. The government will continue to monitor and analyse the evidence produced surrounding pension freedoms. We work closely with the regulators, the industry and consumer groups to scrutinise the impact of pension freedoms and to consider whether further interventions are necessary, and we will keep this recommendation under review.