Pensions Minister Guy Opperman has said the government is not in favour of introducing mandatory pensions guidance.

Speaking during a Work and Pensions Committee session, as part of its inquiry into the pension freedoms, Opperman was asked by Committee member Alex Burghart whether the government is considering default guidance to increase the take up of Pension Wise.

In response, Opperman said: “There are three points to make I suppose, the first is that there is already guidance by reason of the notification that does appear on the situation whereby you are given advice, and secondly, we don’t believe that mandation is the appropriate way forward. But we acknowledge and accept that there is a legitimate and correct debate as to how we can improve the quality of guidance in these circumstances.”

However, he referred the Committee back to the Financial Guidance and Claims Bill, notably an amendment by Lord Sharkey, which Opperman said the government is considering.

The amendment suggested the Financial Conduct Authority (FCA) include a requirement for the trustees or managers of a relevant pension scheme to ask members of the scheme or survivors of members of the scheme, at the point at which they require access to or individual transfer of their pension assets, if they have received the information and guidance available under section 3 of the Financial Guidance and Claims Act 2017.

If they have not received such information and guidance the FCA may require the relevant trustee or manager to provide access to such information and guidance before proceeding.

“It is not our proposal to reject that, to try and answer the chairman’s point, but it is definitely our proposal to consider it, sit down with the FCA, and consider it with parliament because we’re not totally convinced that the wording is ultimately as it should be, but the reality is, we’ve gone from what could be described as a soft nudge at the present situation, to a slightly harder nudge by reason of the Sharkey amendment[…]we accept that principle we are just working on the fine detail,” Opperman explained.

Asked whether the government is looking at any other ways to increase the take up of Pension Wise, Opperman referred to the creation of a new single financial guidance body, as it has decided that to have each service operate in separate silos, is “not the appropriate way forward”.

Opperman, however disagreed with Committee member Steve McCabe that the take up of the Pension Wise service has been “abysmal”. Instead, he said, “from a standing start Pension Wise has done very well”.

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