Work and Pensions Select Committee - Five Years on from the Pension Freedoms: Accessing pension savings
The PLSA welcomes this Work and Pensions Select Committee inquiry on accessing pension savings. We share the committees concerns about some aspects of the way that pensions are accessed. The industry, Government and regulators have acknowledged the challenges that savers face, but have not yet gone far enough to resolve them.
We believe that the introduction of new requirements on schemes to support savers at decumulation – our recommended Guided Retirement Income Choices – will have a materially beneficial impact on saver outcomes. Pension schemes and providers need to deliver well-governed, good value products and should be able to offer services that support savers in their decision making. All schemes and providers should deliver a continuous consumer journey that supports savers, at the right time, starting early.
Savers face risks such as longevity risk and decision risk that put them in harm’s way, and they are unable to access affordable appropriate advice. It is our belief that the support savers need cannot come from self-sought guidance services alone, particularly because weak engagement levels are likely to result in take up rates remaining stubbornly low.
The evolution of the market is constrained by existing legal and regulatory requirements which deter or limit schemes and providers from delivering full and complete support. For a variety of structural reasons few of the best blended products are currently available and further innovation will be required.