DWP investigates trust-based saver needs
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Pension scheme members, trustees, scheme managers and consumer groups have until 25 July to inform the government how to help people make the most of their pensions in the trust-based sector.
What the DWP wants to know
In a call for evidence on decumulation published today, the Department for Work and Pensions wants to know how to help savers, improve member communications, guidance and decumulation products in pension schemes.
It is particularly keen to know about how those with an occupational pension want to be supported in the lead up to taking their pension, when they access their pension, and after they have started to use their savings. The department also wants to understand what existing and new solutions available.
In addition, the department is seeking views from the pensions industry regarding the role that collective defined contribution schemes could play in in decumulation.
The department added 2022 marks 10 years since the introduction of Automatic Enrolment, meaning more people than ever will need to consider how to convert their pension savings into retirement income.
The department added 2022 marks 10 years since the introduction of Automatic Enrolment, meaning more people than ever will need to consider how to convert their pension savings into retirement income.
Pensions minister Guy Opperman said: “Automatic enrolment has introduced over 10.6m people to pension saving, and we want to ensure the record number of Brits now saving for retirement have the support and information they need to make informed choices about accessing their hard-earned savings.”
Nigel Peaple, director of policy & advocacy at the Pensions and Lifetime Savings Association, welcomed the news, adding: “Since the pension freedoms individuals have had more options regarding how they access their pension savings, but most people need support in making these important and complex decisions.”
Trust-based scheme members could get more support
The DWP’s decision to call for evidence builds on research by the Financial Conduct Authority which found that accessing their savings, many people take an income from their current provider without shopping around for the best product or without being aware of how their savings are being invested.
Since then, the FCA has introduced a range of requirements for contract-based pensions such as wake-up packs sent earlier and more frequently, and those at age 50 limited to a single page summary and risk warnings.
The DWP said it has the same goals for individuals in the trust-based market and therefore wants to assess whether the FCA's findings equally apply to members of trust-based pension schemes.
The responses to the call for evidence will inform what, if any, government action is required to help pension savers make the most of their retirement choices when they decumulate.
