Savers urged to be savvy before shifting savings
9 Jul 2021 11:12 AM
Plans to support savers seeking access to their pension pots are outlined today in a change to ensure people are fully informed before moving their money.
Currently, when people want access to their savings, their pension scheme is only required to tell them that free, impartial guidance is available from Pension Wise.
New “Stronger Nudge” rules set out today, propose requiring trustees and pension scheme managers to make sure the individual has either received – or opted out of receiving – that Pension Wise guidance, before proceeding with their application.
Pension schemes will also be required to offer to book a Pension Wise appointment on the individual’s behalf.
Minister for Pensions, Guy Opperman, said:
It is vital that savers have the support they need when making decisions about their pension pots that could have serious financial consequences for them in later life.
Pension Wise is a fantastic service that offers free, impartial guidance and so I want to see as many people as possible using it.
This change is vital in preventing savers from failing to take advice and increasing the take-up of the guidance that is available.
Where individuals do not wish to take up the offer of a Pensions Wise appointment the Department for Work and Pensions is proposing that they specifically opt out via a separate communication with the scheme, although some exemptions would be in place.
Pension Wise, the service promoted by the government, provides free, impartial, guidance to help individuals aged 50 and over with a defined contribution pension, understand the options available to them.
It is a valuable service and these proposals are designed to increase the take up of guidance by presenting Pension Wise guidance as a normal part of the process of accessing pension savings.
The consultation can be found on GOV UK and is open for responses until 3 September 2021.
The DWP is also consulting on draft regulations on pension transfers between schemes that will, if brought into force, place a duty on the trustees and managers of schemes in scope to refer customers to a scams guidance appointment, provided by Money and Pensions Service, if a proposed transfer is deemed to be a potential scam risk.