Government plans to “nudge” people to take pensions guidance
28 October 2020
The Department for Work and Pensions (DWP) has confirmed, in a press release, that the Government intends to strengthen protections for pension savers, and will do so by “nudging” them towards taking Pension Wise guidance when they seek to access their pension.
The proposals have been made following on from successful trials and will mean that any occupational pension schemes will be required to direct members towards taking advice from Pension Wise prior to making any decisions. The Pension Wise service delivers free and impartial guidance aimed to assist people over the age of 50, who have an occupational pension, to understand the options they have in relation to accessing their pension pots.
Trials highlighted a substantial uplift in the number of savers making appointments with Pension Wise in scenarios where pension providers explained the purpose and content of the guidance, and subsequently either offered to book a Pension Wise appointment, or diverted them to the Money and Pensions Service (MaPS), who booked the appointment for them.
A Statement of Policy Intent has been published and will build on the results of the trials and encouraging more people, who would benefit from Pension Wise, but who haven’t made an appointment, to do so.
Guy Opperman, Minister for Pensions and Financial Inclusion, said:
“I want taking guidance to become a natural part of the journey savers embark on when making decisions about their pension pots.
These measures will advance the Government’s goal of ensuring that people have the necessary support and information to make informed choices about their financial futures.”
In addition to advising people to make use of the service, it is hoped that the new proposals will also ensure that consumers are further protected from scams. “Stronger Nudge” measures are part of a package which has been designed to assist people in making informed decisions when accessing their pension savings.
The Pension Wise service was launched in 2015, and demand for it has increased year on year. In 2019-20, the MaPS delivered more than 200,000 Pension Wise interactions, which included appointments by telephone or face-to-face and online sessions.
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