14 July 2023

The Department for Work and Pensions (DWP) has opened the new consultation ‘Helping savers understand their pension choices: supporting individuals at the point of access’, on 11 July 2023. This is a consultation on a policy framework for supporting individuals on how to use their private pension savings at the point of access.

It has been reported that the UK has seen significant growth in the number of people saving into an occupational Defined Contribution (DC) scheme from a total of 2.3 million memberships in 2012 to now over 26.3 million (including hybrid schemes). This expansion alongside the introduction of pension freedoms means that many more people will need to make important decisions about how they want to access their pension savings.

This consultation sets out proposals and seek views on a decumulation framework that will provide support at the point of access. In addition to the existing choices available to members under the pension freedoms, this could include an offer of a Collective Defined Contribution (CDC) arrangement in retirement. The objective is to help savers achieve better outcomes through provision of CDC, where members can benefit from greater investment opportunities and consolidation in the market whilst supporting the wider government agenda around productive finance. This consultation closes on 5 September 2023.

Laura Trott MP, Minister for Pensions, said:

‘‘Taken together with the reforms I consulted on to expand CDC schemes to multi-employer schemes, these proposals provide the foundation to build on my longer-term vision to improve fairness, predictability and adequacy for savers.

This is a real opportunity to help shape the next stage in one of the most challenging and significant issues in Private Pensions. That is why I encourage all interested parties to respond and play their part in helping improve outcomes for todays and tomorrow’s pensioners.’’

The consultation document includes:

  • a response to the products and services element of the call for evidence on Helping savers understand their pension choices
  • a set of policy consultation questions on support and products to be made available to members of occupational pension schemes
  • an exploration of next steps.

Responses are welcomed from:

  • pension scheme trustees and managers
  • pension scheme service providers, other industry bodies and professionals
  • employers who sponsor an occupational pension scheme
  • individual pension savers.

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