Government papers: Pension freedoms

This report from the Work and Pensions Committee considers how pension freedoms can work better for consumers. It has taken a two-pronged approach. First, it seeks to protect savers who do not – or cannot – engage with pension choices. Second, it looks to empower more consumers to make active decisions.

To help meet this aim the Committee has made several recommendations to improve the pension freedoms market. These include:

• Calling on the government to set out its long-term objectives for pension freedoms and how it will monitor and report on these.
• The government should take forward FCA proposals to introduce default decumulation pathways. Any provider offering drawdown would be required by FCA rules to offer a default solution that is targeted at their core customer group. 
• NEST should be allowed to provide decumulation products from April 2019, which would encourage other pension providers to follow suit.
• Pension ‘wake-up packs’ do not work. Instead a one-page ‘pension passport’ should be introduced to encourage better engagement with retirement options.
• A single pensions dashboard should be created and all pension providers should be mandated to provide necessary information to it.
• A comparison review should be undertaken to assess consumer outcomes between face-to-face and automated advice.