Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
Consumers and students lack adequate support to understand complex financial products and education choices.
Conclusion
This committee’s 2016 report on financial services mis-selling similarly concluded that the Financial Conduct Authority was not doing enough to ensure that consumers understand the financial products they are buying. The report found that even the most knowledgeable consumers can find financial services too complex to understand, which emphasises the importance of providing adequate support to consumers making financial decisions.39 While not a financial product, this committee also saw similar themes in its 2018 inquiry into the higher education market. The report found that young people taking out student loans were not properly supported to make decisions on higher education that affected their future careers, in large part due to insufficient and inconsistent careers advice.40
Government Response Summary
The government agrees with the recommendation and will inform the Committee of actions taken to support informed pension decisions. They cite recent steps like the Stronger Nudge to Pensions Guidance, national mid-life MOT delivery, and new regulations for Pensions Dashboards.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2023. 4.2 The government recognises that decisions about pensions can be complex and significant. The government will write to the Committee setting out the action it is taking to support people to make informed decisions about their pensions by encouraging the use of appropriate advice and guidance and reducing the complexity of decisions savers are required to take. 4.3 The government has recently taken significant steps to support people to make informed decisions about their pensions. The Stronger Nudge to Pensions Guidance ensures no-one accesses Defined Contribution pension savings without receiving Pension Wise guidance, or actively opting out of receiving it. The government is delivering the mid-life MOT in Jobcentre plus offices nationally; employers in the North East, East Anglia, and Devon and Cornwall through private sector providers; and launched an improved digital service in July 2023. The mid-life MOT provides and signposts to guidance around careers, health and finances, including pensions. 4.4 On 19 July 2023, the government made regulations with a new approach to delivery of Pensions Dashboards that allows the government to work more collaboratively with the pensions industry. The government remains as committed as ever to making pensions dashboards a reality and is ambitious about their delivery.