Govt has ‘no immediate plans’ to review DB transfer advice threshold

The government has “no immediate plans” to review or lower the threshold at which savers are required to take financial advice when transferring a defined benefit (DB) pension, Pensions Minister, Guy Opperman, has said.

Currently, anyone seeking to transfer or convert a cash equivalent value of £30,000 or more from a DB pension is required to take financial advice.

In response to a parliamentary written question from Labour MP for Warrington North, Charlotte Nichols, Opperman noted that the Secretary of State for Work and Pensions, Thérèse Coffey, has a duty to review the requirement and the first report must be published before 6 April 2023.

Opperman added that the government’s commitment to maintain the existing threshold is part of its “wider commitment to safeguarding consumer savings” and it wanted savers to better understand their choices and the risks.

He reiterated that the Department for Work and Pensions (DWP) will be introduced new information requirements for defined contribution (DC) scheme members over the age of fifty.

These will inform applicable savers about their retirement options and the availability of guidance to help with their decisions.

“DWP also see accessing guidance as a natural part of the journey savers take, before making a decision relating to the pension freedoms,” continued Opperman.

“Following the recent trials, which showed a nudge to guidance during the application process is effective, we will be commencing section 19 of the Financial Guidance and Claims Act 2018, which amends the Pension Schemes Act 1993.”

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