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
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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
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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
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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
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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
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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
13 results
Clear
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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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