Aegon calls on the Work and Pensions Select Committee to use its influence to encourage the Government and regulators to work closely with the pension industry to improve member outcomes

by | Feb 1, 2022

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Kate Smith, Head of Pensions at Aegon comments on the Work and Pensions Select Committee’s third inquiry, “Protecting pension savers: five years on from the Pension Freedoms: Saving for later life” which closes on 2 February 2022.

“For the last two years the Work and Pensions Select Committee has been carrying out a three-part in-depth inquiry into the Pension Freedoms, introduced almost seven years ago. The third and final inquiry focuses on ‘saving for later life’ and looks at what more could be done to improve pension saving adequacy. The reality is that many people do not have adequate savings, either as pensions or other savings, to provide an adequate sustainable income in retirement. This is more likely to be the case for those in their 40s, who, if they work in the private sector, are far less likely than previous generations to have built up defined benefit pensions and who will benefit less from auto-enrolment than younger cohorts whose contributions will have longer to grow.

“The DWP and regulators already have a packed agenda which has the potential to improve member outcomes, such as the various value for money initiatives, small pension pots consolidation and pension dashboards.  We call on the Work and Pensions Select Committee to use its influence to encourage the Government and regulators to go further by working closely with the pension industry to make three improvements which could make a real difference in improving member outcomes:

  1. Implementing the 2017 review of auto-enrolment recommendations, starting with a further freeze of the thresholds in April 2022, then publishing an implementation timetable. Concurrently, conversations need to start about the next steps for auto-enrolment to plug the gaps given the changing world of work.
  2. Enabling pension providers and schemes to provide additional support by providing timely, meaningful and more personalised guidance.
  3. Bringing the DWP pension disclosure rules for issuing wake-up packs in line with the FCA regulations, allowing members more time to take action to improve their retirement outcomes. Currently the FCA rules mean personal pension savers receive their wake-up packs from age 50, then every five years. The DWP rules mean occupational scheme members may not receive their wake-up packs until four months before their 55th birthday. Different rules just adds to member confusion.

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