Protecting pension savers – five years on from the Pension Freedoms: Accessing pension savings

Work and Pensions Committee Closed Inquiry
Opened: 23 Feb 2021 Closed: 21 Oct 2022 Parliament page
This inquiry is looking at how savers are prepared and protected to move from saving for retirement to using their pension savings. This is the second of our three-part inquiry, looking at decisions make about accessing their pensions. We concluded taking evidence on our first part, pension scams, in January … Read more
24 Recommendations
9 Conclusions
1 Report
5 Oral sessions
3 Letters
5 Events
Activity timeline 10 events
6 Jul
2022
Correspondence
27 Apr
2022
Report published
18 Jan
2022
Report published
2 Dec
2021
Correspondence
24 Nov
2021
Correspondence
8 Nov
2021
Oral evidence
25 Oct
2021
Oral evidence
22 Sep
2021
Oral evidence
21 Jul
2021
Oral evidence
16 Jun
2021
Oral evidence
Oral evidence sessions 5 sessions
8 Nov 2021
View on parliament.uk
Work and Pensions Committee
Anna Harvey · HM Treasury Guy Opperman · Department for Work and Pensions John Glen · HM Treasury Pete Searle · Department for Work and Pensions
25 Oct 2021
View on parliament.uk
Work and Pensions Committee
Angela Gough · Royal Mail David Pitt-Watson · Cambridge University Simon Eagle · Institute and Faculty of Actuaries The Baroness Altmann CBE
22 Sep 2021
View on parliament.uk
Work and Pensions Committee
Alex Connolly · Money and Pensions Service Carolyn Jones · Money and Pensions Service Chris Curry · Money and Pensions Service David Fairs · The Pensions Regulator Sarah Pritchard · The Financial Conduct Authority
21 Jul 2021
View on parliament.uk
Protecting pension savers –five years on from the Pension Freedoms: Accessing pension savings
Colin Clarke · Legal and General Laura Myers · Lane, Clark & Peacock Matthew Arends · Aon Peter Glancy · Scottish Widows Philip Brown · B&CE, the People’s Pension Rachel Vahey · AJ Bell Stephen Lowe · Just Group
16 Jun 2021
View on parliament.uk
Work and Pensions Committee
Chris Brooks · Age UK Dr Julia Mundy · Financial Services Consumer Panel Joe Dabrowski · Pension and Lifetime Savings Association Laurie Edmans · Financial Inclusion Commission Paul McBride · The Society of Pension Professionals Renny Biggins · The Investing and Saving Alliance Tess Page · Association of Consulting Actuaries Yvonne Braun · ABI
Title HC No. Published Items Response
Fifth report - Protecting pension savers—five years on from the … HC 237 18 Jan 2022 33 Responded
Recommendations & Conclusions
33 results
1 Conclusion Acknowledged
Fifth report - Protecting pension …
The pension freedoms gave people the freedom to choose what to do with their money.
The pension freedoms gave people the freedom to choose what to do with their money. On balance these changes have been a success and we do not want to see them rolled back. However, many savers need more support than … Read more
Government Response
The government acknowledges the need for more support for savers and lists ongoing measures like Pension Wise, Pensions Dashboards, Mid-life MOT, and Stronger Nudge, without committing to any new specific action.
Department for Work and Pensions
View details
2 Recommendation Rejected
Fifth report - Protecting pension …
Making pensions decisions is complicated.
Making pensions decisions is complicated. The continued movement from DB to DC, together with auto-enrolment and the increased number of jobs that one person will have over a working lifetime, mean that without intervention decision-making will become more complicated still. … Read more
Government Response
The government does not believe it is appropriate to make changes to tax policy related to the Pension Commencement Lump Sum (PCLS) due to concerns about members accessing their lump sum earlier without advice and potential negative impacts on retirement outcomes, but will issue a call for evidence in May 2022.
Department for Work and Pensions
View details
3 Conclusion Deferred
Fifth report - Protecting pension …
The Minister for Pensions told us that the Department for Work and Pensions is trying...
The Minister for Pensions told us that the Department for Work and Pensions is trying to make pensions simpler. We support this principle. But simplicity alone is not enough to improve outcomes for savers. The Government and regulators will either … Read more
Government Response
The government is deferring the response to MaPS and the FCA.
Department for Work and Pensions
View details
4 Recommendation Not Addressed
Fifth report - Protecting pension …
People can usually take up to 25% of their pension as a tax-free lump sum.
People can usually take up to 25% of their pension as a tax-free lump sum. This is one of the most well-known UK pension policies and leads to many people who access their pensions for the first time taking poor … Read more
Government Response
The government response focuses on Collective Defined Contribution (CDC) schemes and doesn't address the recommendation to research decoupling the tax-free portion of pension pots. It is therefore not addressed.
Department for Work and Pensions
View details
5 Conclusion Not Addressed
Fifth report - Protecting pension …
We were told that most savers want a reliable income in retirement.
We were told that most savers want a reliable income in retirement. Annuities provide this for savers with defined contribution pensions, but have dramatically fallen in use since the introduction of pension freedoms. The transition from defined benefit schemes to … Read more
Government Response
The government's response discusses the code of practice for CDC pension schemes instead of addressing the observation about the decline in annuity use. Therefore it is not addressed.
Department for Work and Pensions
View details
6 Recommendation Deferred
Fifth report - Protecting pension …
Many more people than currently do, however, would benefit from making greater use of the...
Many more people than currently do, however, would benefit from making greater use of the pension freedoms by choosing a mix of annuities, lump sums and drawdown Protecting pension savers—five years on from the Pension Freedomss Accessing pension savings 61 … Read more
Government Response
The government states that the FCA will be responding to the recommendation separately.
Department for Work and Pensions
View details
7 Conclusion Acknowledged
Fifth report - Protecting pension …
Hybrid products which provide a ready-made mix of lump-sums, drawdown and annuities can be complicated...
Hybrid products which provide a ready-made mix of lump-sums, drawdown and annuities can be complicated and costly. We believe that a personalised mix of retirement products would better meet the needs of savers. However, these options will be difficult for … Read more
Government Response
The government acknowledges the importance of joint consultations between TPR and FCA and supports this goal where opportunities permit, citing examples of collaborative work. DWP intends to issue a call for evidence in May to consider what members of trust-based schemes want in terms of information and support.
Department for Work and Pensions
View details
8 Recommendation Deferred
Fifth report - Protecting pension …
We recommend that the Money and Pensions Service and the Financial Conduct Authority should develop...
We recommend that the Money and Pensions Service and the Financial Conduct Authority should develop proposals to increase the number of people choosing a mix of retirement products—including cash, drawdown and deferred annuities—to meet their changing needs at different stages … Read more
Government Response
The DWP intends to issue a call for evidence in May 2022 to inform whether policy interventions are necessary to support savers in occupational pension schemes, before considering introducing default retirement pathways.
Department for Work and Pensions
View details
9 Conclusion Deferred
Fifth report - Protecting pension …
The Pension Schemes Act 2021 enabled collective defined contribution (CDC) schemes, which provide retirement incomes...
The Pension Schemes Act 2021 enabled collective defined contribution (CDC) schemes, which provide retirement incomes from a collective fund. The income from the fund received by members varies depending on how the fund performs. There is demand for the further … Read more
Government Response
The FCA will be responding to this recommendation separately.
Department for Work and Pensions
View details
10 Recommendation Rejected
Fifth report - Protecting pension …
The Royal Mail CDC scheme is likely to be the first of its kind under...
The Royal Mail CDC scheme is likely to be the first of its kind under the Pension Schemes Act 2021. We anticipate other employers and organisations will want to learn from this scheme. We recommend that the Government publishes a … Read more
Government Response
The government does not support setting a goal for the combined use of Pension Wise and paid-for advice when accessing pots for the first time. It encourages MaPS to evolve the Pension Wise service.
Department for Work and Pensions
View details
11 Recommendation Rejected
Fifth report - Protecting pension …
We recommend that the Pensions Regulator works with the Royal Mail to develop a toolkit...
We recommend that the Pensions Regulator works with the Royal Mail to develop a toolkit for other employers looking to set up similar schemes.
Government Response
The government disagrees with the proposal to automatically book Pension Wise appointments, citing issues with the approach, and says it is considering further encouraging early engagement with pensions guidance.
Department for Work and Pensions
View details
12 Recommendation Deferred
Fifth report - Protecting pension …
For CDC schemes to provide a realistic alternative to annuities, people with defined contribution pension...
For CDC schemes to provide a realistic alternative to annuities, people with defined contribution pension pots need the option to be able to transfer to decumulation- only CDC schemes. In future these may be available through master-trusts regulated by the … Read more
Government Response
The government will consider the recommendation in more detail, noting a Pensions Policy Institute DC data project and ongoing consultation on Pensions Dashboards Regulations, but does not commit to any specific action at this time.
Department for Work and Pensions
View details
13 Recommendation Accepted
Fifth report - Protecting pension …
Measures are in place for contract-based schemes to offer investment pathways, but equivalent measures are...
Measures are in place for contract-based schemes to offer investment pathways, but equivalent measures are some way off for trust-based schemes and their final form may differ. This is not an isolated case of different measures being in place for … Read more
Government Response
The government states that HM Treasury works closely with the FCA to ensure that the financial advice market works well, competitively and fairly for both firms and consumers, and that the advice being provided is of high quality, including for pensions advice.
Department for Work and Pensions
View details
14 Recommendation Acknowledged
Fifth report - Protecting pension …
The Department for Work and Pensions and the Pensions Regulator are developing proposals for equivalent...
The Department for Work and Pensions and the Pensions Regulator are developing proposals for equivalent measures to investment pathways for trust-based schemes. We recommend that investment pathways should have the same form for contract- based and trust-based schemes. Read more
Government Response
The government states that amending the level of PAA would depend on changes being made. The government continues to monitor the uptake of the PAA to understand the success of the scheme and is keeping the level under review.
Department for Work and Pensions
View details
15 Recommendation Deferred
Fifth report - Protecting pension …
There is a charge cap for savers who default to a scheme through auto-enrolment.
There is a charge cap for savers who default to a scheme through auto-enrolment. We recommend that there should be a similar charge cap for non-advised savers choosing a decumulation product through investment pathways. The Financial Conduct Authority should report … Read more
Government Response
The government states that the FCA will be responding to this recommendation separately.
Department for Work and Pensions
View details
16 Recommendation Acknowledged
Fifth report - Protecting pension …
Pension Wise is a well-regarded but under-utilised service.
Pension Wise is a well-regarded but under-utilised service. The pension freedoms will be seen as a failure if savers make poor decisions without receiving the guidance they were promised when the freedoms were introduced. The Minister for Pensions and Financial … Read more
Government Response
The government supports MaPS’ guidance transformation strategy, which will seek to triage members towards the guidance service most appropriate for them and increase the flexibility of Pension Wise so that it may more be more effectively tailored towards an individual’s needs.
Department for Work and Pensions
View details
17 Recommendation Acknowledged
Fifth report - Protecting pension …
The “stronger nudges” towards guidance being proposed by the Department for Work and Pensions and...
The “stronger nudges” towards guidance being proposed by the Department for Work and Pensions and the Financial Conduct Authority will not be enough to make receiving pensions guidance the norm. The Money and Pensions Service told us that it would … Read more
Government Response
The government did not commit to trialling automatic Pension Wise appointments, but mentioned that TPR and the FCA promote the tools available from MoneyHelper and will continue to work with partners to promote guidance services.
Department for Work and Pensions
View details
18 Recommendation Acknowledged
Fifth report - Protecting pension …
Many savers have multiple pension pots with different providers and schemes.
Many savers have multiple pension pots with different providers and schemes. At the moment, it is not possible for providers and regulators to aggregate data on individual savers, rather than individual pension pots. This makes it more difficult to ensure … Read more
Government Response
The Government agrees that digital tools have an important role and encourages MaPS to go further in developing its digital offer, supporting MaPS' guidance transformation strategy, but notes some people may need additional support.
Department for Work and Pensions
View details
19 Recommendation Deferred
Fifth report - Protecting pension …
Advice is a personalised recommendation that can only be provided by a regulated firm at...
Advice is a personalised recommendation that can only be provided by a regulated firm at a cost. Few people seem to be willing to pay for financial advice for the decisions they make about their pension savings—even though doing so … Read more
Government Response
The government defers action on reporting annually on progress to increase the uptake of pensions advice, stating that transactions should not be enabled on dashboards initially and future enhancements to dashboards functionality should be decided after the initial offer has been tested with users.
Department for Work and Pensions
View details
20 Recommendation Acknowledged
Fifth report - Protecting pension …
The Pension Advice Allowance allows £500 to be withdrawn from a pension up to three...
The Pension Advice Allowance allows £500 to be withdrawn from a pension up to three times in different tax years for advice. Either because of a lack of awareness or lack of demand the policy is not working. Its design … Read more
Government Response
The government acknowledges the issue of deferred small pots and describes existing actions like Pensions Dashboards, Simpler Annual Benefit Statements and a de minimis on flat fee charges. They are working with an industry group to develop automated consolidation solutions but do not directly address the specific recommendations regarding the PAA.
Department for Work and Pensions
View details
21 Recommendation Acknowledged
Fifth report - Protecting pension …
The line between advice and guidance is a continuing issue of debate.
The line between advice and guidance is a continuing issue of debate. There is demand for both enhanced guidance and limited advice, but there is reluctance from the industry to operate too close to the advice/guidance boundary and resistance to … Read more
Government Response
The government states that individuals using dashboards will be able to delegate access to MaPS guiders or authorized financial advisers and that the MaPS dashboard will be integrated into the MaPS retirement planning hub to better tailor guidance interventions.
Department for Work and Pensions
View details
22 Recommendation Acknowledged
Fifth report - Protecting pension …
We recommend that the Money and Pensions Service offers enhanced guidance, under our proposed definition,...
We recommend that the Money and Pensions Service offers enhanced guidance, under our proposed definition, through its pensions services. We also recommend that the Money and Pensions Service establishes an industry group to develop best practice proposals and templates for … Read more
Government Response
The government welcomes the industry-led campaign for Pensions Engagement Season and states they will continue to look at ways that they can prompt people to engage with their pensions, including what role annual benefit statements can play.
Department for Work and Pensions
View details
23 Recommendation Accepted in Part
Fifth report - Protecting pension …
Pension savers will often look first to their scheme or employer for support when making...
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 … Read more
Government Response
The government is working with the Money and Pensions Service to test and develop a financial Mid-life MOT, building on previous tests and examples, and will trial Midlife MOT activity in Jobcentres and the private sector to help older workers plan their career and remain in work.
Department for Work and Pensions
View details
24 Conclusion Not Addressed
Fifth report - Protecting pension …
Most guidance is currently delivered by individuals, which is costly, or through written communication, which...
Most guidance is currently delivered by individuals, which is costly, or through written communication, which is unengaging. In future we envisage a significant proportion of guidance or triage services will be delivered through digital tools. This should be a key … Read more
Government Response
The government acknowledges the benefits of consultation and announces that the NMPA will rise to 57 in April 2028. This does not address the need for digital tools in guidance, so is classified as not addressed.
Department for Work and Pensions
View details
25 Conclusion Acknowledged
Fifth report - Protecting pension …
Pensions dashboards will let people see all of their pensions on a digital platform.
Pensions dashboards will let people see all of their pensions on a digital platform. This has the potential to be the most influential policy in helping people take good decisions when they first access their pension pots. To be successful, … Read more
Government Response
The government agrees that pensions dashboards offer a significant opportunity and are working closely with regulators, pension providers, and administrators on this issue.
Department for Work and Pensions
View details
26 Recommendation Accepted
Fifth report - Protecting pension …
When pension dashboards launch it will not be possible to undertake any transactions through them.
When pension dashboards launch it will not be possible to undertake any transactions through them. We understand why some people are calling for transactions to be facilitated through pension dashboards. However, with dashboards a long way from reality and a … Read more
Government Response
The government states that individuals using dashboards can delegate access to MaPS guiders or authorised financial advisers, and the MaPS dashboard will be integrated into the MaPS retirement planning hub.
Department for Work and Pensions
View details
27 Conclusion Acknowledged
Fifth report - Protecting pension …
Many savers will have built up a number of small pension pots, which would benefit...
Many savers will have built up a number of small pension pots, which would benefit from consolidation. However, the issue of small pension pots cannot be solved simply by encouraging savers to change their behaviour to proactively consolidate their small … Read more
Government Response
The department is working closely with the ABI/PLSA-led industry coordination group on consolidating small pension pots and expects a progress report in May 2022.
Department for Work and Pensions
View details
28 Recommendation Accepted
Fifth report - Protecting pension …
Pensions dashboards will change how people engage with their pension savings.
Pensions dashboards will change how people engage with their pension savings. Dashboards will also provide an important additional tool which can be used by those providing guidance or advice to savers. We recommend that the Money and Pensions Service should … Read more
Government Response
The Money and Pensions Service (MaPS) dashboard will be integrated into the MaPS retirement planning hub to tailor guidance interventions according to individual needs and will help savers to see in one place what they have and help facilitate a Pension Wise appointment.
Department for Work and Pensions
View details
29 Conclusion Accepted
Fifth report - Protecting pension …
The simpler annual pension statement will require schemes to show information to members in a...
The simpler annual pension statement will require schemes to show information to members in a consistent way across the industry. We welcome the simpler annual pension statement and believe it will be particularly beneficial to people with many pension pots. Read more
Government Response
The government has recently introduced Regulations to make Annual Benefit Statements for defined contribution schemes simpler and easier to understand.
Department for Work and Pensions
View details
30 Recommendation Acknowledged
Fifth report - Protecting pension …
A pension statement season would be a short period each year when schemes were required...
A pension statement season would be a short period each year when schemes were required to send savers annual pension statements. We are not convinced that the gains from a statement season will justify the complexity of introducing it. In … Read more
Government Response
The government acknowledges the challenges of delivering a statement season and states they will continue to look at ways to prompt people to engage with their pensions, but offers no specific action beyond welcoming the industry-led Pensions Engagement Season.
Department for Work and Pensions
View details
31 Recommendation Accepted
Fifth report - Protecting pension …
The midlife MOT is free support for people in their 40s, 50s and 60s to...
The midlife MOT is free support for people in their 40s, 50s and 60s to make plans about work, wellbeing and money. We welcome the principle of a midlife MOT, but believe that the policy is not yet providing the … Read more
Government Response
The department claims to be already working closely with the Money and Pensions Service, supported by the wider Mid-life MOT Board, to test both the most effective format(s) for Mid-life MOTs and the most efficient delivery route for Mid-life MOTs, building on the findings of the 2021 Local Enterprise Partnership Digital Delivery tests.
Department for Work and Pensions
View details
32 Recommendation Acknowledged
Fifth report - Protecting pension …
We support the Government’s intention to make pensions simpler.
We support the Government’s intention to make pensions simpler. Recent policy changes to the normal minimum pension age have highlighted the difficulties of achieving this and we are disappointed that these changes have made making decisions about accessing pensions even … Read more
Government Response
The government acknowledges the benefits of timely and thorough consultation and achieving cross-party consensus where possible. They cite consultations regarding the NMPA increase as evidence of this approach, while protecting existing rights.
Department for Work and Pensions
View details
33 Recommendation Accepted
Fifth report - Protecting pension …
The Government, regulators and the Money and Pensions Service are introducing multiple policy interventions to...
The Government, regulators and the Money and Pensions Service are introducing multiple policy interventions to support the pension freedoms. Six years on there remains no framework against which to evaluate the success of the freedoms or make judgements about the … Read more
Government Response
The government asserts they are already committed to providing savers with information and support. They cite the call for evidence, Pension Wise, pensions dashboards, Simpler Annual Benefit Statement, Mid-life MOT initiative and Stronger Nudge policy as existing measures and will continue to review ways to improve support offered to individuals.
Department for Work and Pensions
View details
Government Response AI assessment · 33 of 24 classified
Accepted 6
Accepted in Part 1
Acknowledged 13
Deferred 7
Not Addressed 3
Rejected 3
Total 24 recs + 9 conclusions
Correspondence 3 letters
6 Jul 2022 Correspondence from Money and Pension Service about the Committee’s Report on accessing pension savings
Parliament page
2 Dec 2021 To committee Letter from the Chair to the Minister for Pensions and the Economic Secretary to the Treasury, following the evidence session on 8 November
Parliament page
24 Nov 2021 Correspondence with FCA and TPR following up on the 22 September evidence session – Accessing pension savings
Parliament page