The Work and Pensions Committee (WPC) has published a parliamentary report making a number of recommendations to the government about how pension scheme members could be better protected and supported to make good decisions.  This follows an inquiry into how the 2015 DC pension reforms (dubbed “freedom and choice”) are working out.

The inquiry concluded that although the DC flexibilities introduced in 2015 have “on balance” been a success, many DC members are in need of greater support than is currently available.

The “stronger nudge” reforms, though welcome, do not go far enough in the WPC’s view.  The WPC wants the government to set a goal that at least 60% of people should be receiving Pension Wise guidance or paid-for advice when accessing their DC pensions for the first time.  Currently only 14% take Pension Wise guidance before accessing DC pots.

The WPC also wants to trial automatic Pension Wise appointments and introduce “midlife MOTs” – i.e. offer members guidance and advice some time before retirement age when it’s not too late to inform retirement planning.  However, while Pensions Minister Guy Opperman is supportive of the midlife MOT idea, he has for now ruled out automatic Pension Wise appointments for 50-year-olds on costs grounds.

Other WPC recommendations include:

Scrapping plans for a DC “statements season” on the basis that the benefits are outweighed by the difficulties and this is anyway just a stopgap until pension dashboards are introduced.

Boosting the take up of pension advice by extending the Pensions Advice Allowance.

Exploring the possibility of de-coupling tax free cash and the rest of a member’s pension.  This is to stop members making hasty and poor decisions about 75% of their pot because overly focussed on the 25% tax free element.

These recommendations will not necessarily be adopted by the government, but their publication will put pressure on the DWP to consider further member protections and potentially to abandon apparently unpopular ideas such as the statements season.  The report therefore gives us an indication of the possible direction of travel for future pensions policy.



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