WPC chair tables PSB amendment on automatic pension guidance appointments

Work and Pensions Committee chair, Stephen Timms, has submitted an amendment to the Pension Schemes Bill (PSB), which would require automatic pension guidance appointments, to be heard at the Bill Committee on Tuesday.

The proposed amendment aims to increase the use of pension guidance following the Department for Work and Pensions' (DWP) policy statement last week, which outlined plans to introduce a ‘stronger nudge’ to encourage take-up of Pension Wise guidance.

It would require the Secretary Of State to write to members or survivors of pension schemes five years before becoming eligible to access their benefits with a scheduled date and time for a pension guidance appointment, as well as the option to reschedule or defer.

They will also be required to write to members with appointment details annually, until a pensions guidance appointment has been taken, or the member’s desire to opt out has been confirmed.

Furthermore, if members have not used pensions guidance by the time they become eligible to access their pension, they would be directed to pensions guidance by the regulations from the Financial Guidance & Claims Act upon requesting access to their benefits.

The proposed amendment aims to ensure members or survivors of pension schemes receive impartial pension guidance appointment prior to becoming eligible to access their benefits.

Timms previously stated that whilst the government's approach outlined in the policy statement was a “step forward", it was unlikely to deliver a really major increase in the numbers of people who take guidance from Pension Wise.

Previously commenting on the DWP announcement, Timms stated: “Pension Wise offers a hugely valuable service for the pension savers who use it: nearly three quarters of them make a different decision after having its guidance.

“But unfortunately only a very small proportion of savers speak to Pension Wise. That leaves huge numbers of people at risk of making the wrong decision about accessing their pension savings—risking a lower quality of life in retirement and, in the worst case scenario, losing all of their pension savings to scammers.”

The amendment also follows research from Just Group, which found that just 4 per cent of those aged 45-54 with a defined contribution pension would opt out of a pre-booked Pension Wise guidance session if it were automatically booked for them before they accessed their benefits.

    Share Story:

Recent Stories

Are current roads into retirement delivering member value?
Laura Blows explores HSBC Master Trust’s recent report, Converting pension pots into incomes, with HSBC Retirement Services CEO, Alison Hatcher.

Savings and finance at retirement
Laura Blows is joined by Claire Felgate, Head of Global Consultant Relations, UK, at BlackRock, to discuss savings and finance at retirement. Please click here for an edited write-up of the video

Making pension engagement enjoyable through technology
Laura Blows speaks to Nick Hall, business development director and Chartered Financial Planner at UK-based Wealth Wizards about the opportunities that technology provides for increasing people’s engagement with pensions and increasing their retirement wealth. Please click here for an edited write-up of the video

Pension portfolios – the role of asset-backed securities
Laura Blows is joined by Royal London Asset Management (RLAM) head of sterling credit research, Martin Foden, and its Senior Fund Manager, Shalin Shah to discuss the role of asset-backed securities (ABS) within pension fund portfolios
Incorporating ESG into fixed income
Laura Blows is joined by TCW head of fixed income ESG, Jamie Franco, to discuss incorporating environmental, social and governance (ESG) strategies into fixed income portfolios