Measures to encourage savers to seek pension guidance rejected by MPs
17 November 2020
The final reading of the Pension Schemes Bill, on 16 November 2020, saw MPs reject an amendment which would have meant that it would be mandatory for the Government to contact savers five years before the date that they can access their pension pot, to offer them an appointment with Pension Wise.
Stephen Timms, the chairman of the work and pensions committee, put forward the amendment, even though a comparable amendment was withdrawn in the previous reading of the Bill. Mr. Timms stated that encouraging people to attend a guidance appointment would help to ensure that they do not get scammed. He commented:
“A significantly higher number of Pension Wise users than non-users say that they are very or fairly confident about avoiding pension scams, having had an interview with Pension Wise.
The default ought to be that people are given an appointment.”
The Bill also includes rules relating to pension dashboards, collective defined contribution schemes and additional powers that will be granted to The Pensions Regulator. It was reintroduced to the House of Lords on 7 January 2020 after the late general election in December delayed its discussion in parliament. It was delayed further because the Government has had to focus its attention on legislation designed to fight the outbreak of coronavirus.
Pensions Minister, Guy Opperman said:
“I am afraid the reality is that Labour’s proposals would direct investment, breach fiduciary duties and lead to divestment and negative outcomes.
We want the transformation of the United Kingdom economy and the retrofitting of the country to happen in a partnership with business, legislators, pension schemes and citizens, but I am afraid the amendment would negatively affect that. It would be entirely the wrong way forward.”
The Bill will now be returned to the House of Lords for the consideration of amendments, and this will be the last stage that needs to be completed prior to the Bill receiving Royal Assent and becoming law.
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