Select committee: Work and Pensions Committee
Recommendation 23
Fifth report - Protecting pension savers—five years on from the Pension Freedoms: Accessing pension savings
Published 18 Jan 2022
Paragraph 100
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 ↗
Recommendation (the committee's words)
Pension savers will often look first to their scheme or employer for support when making decisions about their pension savings. Schemes and employers should play an active role in providing guidance and signposting advice to their members and employees. Many large schemes and employers already do this. We recommend 64 Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings that the Pensions Regulator, Financial Conduct Authority and Money and Pensions Service produce a plan to increase the number of schemes and employers using the tools they provide. As far as is possible they should aim for consistency across trust- based and contract-based pension savings. The plan should stress the importance of scheme members shopping around before deciding to buy a new product from their incumbent provider.
From: Work and Pensions Committee, Fifth report - Protecting pension savers—five years on from the Pension Freedoms: Accessing pension savings (HC 237), paragraph 100, 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".