The government has confirmed that it will continue with new requirements for occupational pension schemes.
It will implement the ‘Stronger nudge to pensions guidance’ from 1 June 2022, in line with the Financial Conduct Authority rules for pension providers.
This means all occupational pension schemes will need to present guidance as a routine part of accessing pension savings.
According to the requirements they must also offer to book a Pension Wise appointment for the individual, unless they wish to opt out of receiving guidance.
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Minister for Pensions and Financial Inclusion Guy Opperman said: “We want guidance to be available to savers when making decisions about accessing their pension pots.
“These new measures support savers and further this government’s commitment to ensuring people across the country have the necessary support and information they need to make informed choices about their financial futures.”
The new regulations follow successful trials and a consultation launched in July 2021 by the Department for Work and Pensions.
This comes after a private member’s bill that proposed the extension of auto-enrolment was introduced to parliament earlier this month.
Research by the think tank Onward showed that expanding auto-enrollment to younger people could bring £2.77 trillion to pension savings.
The government says that increasing the take-up of guidance will also help protect consumers from pensions scams, which are being driven by fake websites and online adverts.
The measures build on ongoing government work with industry, regulators and law enforcement partners to pursue fraudsters, close down the vulnerabilities they exploit, and make sure people have the information they need to spot and report scams.
The latest data from the Office of National Statistics (ONS) show pension saving has remained resilient throughout the pandemic, with total membership of occupational pensions up 7 percent on pre-pandemic levels. This includes an increase of 13 percent in private sector defined contribution membership.
The digital pension provider Penfold says everyone should have access to a workplace pension, and it does not seem fair if they don’t earn enough or are too young.
Pete Hykin, Co-Founder at Penfold, said: “Auto-enrolment is undoubtedly one of the best initiatives the pensions industry has seen and yet almost a decade on from its introduction, people are still not saving enough for retirement, and little has been done by most of the industry to increase engagement among savers.”
But he called on the government to ease the thresholds to make it easier for everyone to save for retirement: “Whilst this initiative is exciting, we believe the government needs to go a step further by removing the qualifying earnings definition so that even more people have access to auto-enrolment, regardless of how much money they make. It’s time we address the fact that even when following the rules laid out by the government on pension savings, people are still not saving enough for comfortable lives after work.”
