Recommendation 4

This is another case of government not giving people enough time or support to make complex financial decisions. The government has a role to help people make good financial decisions, because of the detriment that bad choices can lead to. In the case of AEAT, it should have done this directly. This was a complex financial decision where members needed clear information on their options and time to seek appropriate financial advice. AEAT scheme members were only given one month to decide between their pension transfer options, and the information they received was insufficient. We have seen similar issues in other areas, including in the private sector where government oversees the regulation of independent financial advice. For example, our inquiry last year into the British Steel Pension Scheme covered the significant financial harm that many scheme members suffered from transferring their pensions after receiving unsuitable advice. We concluded that the regulatory system had left members open to being taken advantage of and that, seven years after the Pension Schemes Act 2015, regulated financial advisers were still not clear on what was expected of them. DWP is developing several initiatives aimed at supporting people to engage with their pensions, such as ‘Pensions Dashboards’ and a recent call for evidence on the support and information people need when accessing their pensions. However, it is not clear when these initiatives might come to fruition and lead to tangible improvements. Recommendation 4: The government should write to us within three months to set out what more it will do to support people to make informed financial decisions, including regarding their pensions. This should include what changes it will make in light of DWP’s recent call for evidence, and an update on progress with Pensions Dashboards. AEA Technology Pension Case 7 1 AEA Technology pensions