Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Accepted
DWP initiatives for improving pension financial advice lack clear timelines for tangible improvements.
Conclusion
We asked DWP how government can ensure it gives clearer and more accessible financial advice in similar situations in future. DWP told us that changes to policy on privatisations and transfers of pensions meant that the specific circumstances affecting 33 Qq 50–51; C&AG’s Report, paras 3.10–3.11 34 Qq 44, 51 35 Q 74 36 Q 66; C&AG’s Report: para 1.7 37 Q 55 38 Committee of Public Accounts, Investigation into the British Steel Pension Scheme, Fourteenth Report of Session 2022–23, HC 251, July 2022, paras 2, 5 39 Q 54; Committee of Public Accounts, Financial services mis-selling: regulation and redress, Forty-first Report of Session 2015–16, HC 847, May 2016, para 4 40 Committee of Public Accounts, The higher education market, Forty-fifth Report of Session 2017–19, HC 693, June 2018, para 2 AEA Technology Pension Case 13 AEAT pensioners would be unlikely to happen again. More generally, it told us it has worked with the Financial Conduct Authority and the Pensions Regulator to strengthen the protections around financial advice on pensions. DWP said that encouraging engagement with pensions is difficult, and government has been considering how best to nudge people to seek financial guidance or advice, such as through the introduction of a pensions dashboard. DWP wrote to us after our evidence session to explain the ways it is trying to support people to engage with their pensions. This includes new regulations that came into force in 2022 to ensure nobody can transfer their savings through pension freedoms without either receiving Pension Wise guidance or opting out of it. It also includes initiatives under development such as Pensions Dashboards and DWP’s recent call for evidence on the support and information people need when accessing their pensions. However, DWP did not indicate when these initiatives might come to fruition and lead to tangible improvements.41 41 DWP letter to Committee dated 4 April 2023 14 AEA Technology Pension Case
Government Response Summary
The government agrees, committing to write to the Committee by September 2023 to outline actions for supporting informed pension decisions through advice, guidance, and reduced complexity, alongside ongoing initiatives like the Stronger Nudge and 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.