(Amber Valley) (Con):...I am
grateful to the Minister. There is a danger, or there will be if
we are not careful, of us starting to disagree on the
fundamentals, whereas I thought we had a broad consensus of
agreement that we needed to find a way to go further on the
issue. Sir Hector Sants chairs the Money
and Pensions Service whose job it is to deliver
financial advice and support to people around the country, and
even he agrees. Sir Hector said that
“the vast majority of people, left to their own devices, will
probably make a poor decision.”
(East Ham) (Lab):...As the
hon. Member for Amber Valley said, the expectations at the start
were way higher than that. Michelle Cracknell, the then head of
the Pensions Advisory Service, which was subsequently absorbed
into the Money and Pensions
Service said in evidence in October 2014 that
“ambition is that the take-up rate will be very high, with over
75% of people taking the guidance”,
but that it might only be 25% to start with. In fact, it has
never got anywhere near 25%, let alone 75%.
Sir Hector Sants, the chair of the Money
and Pensions Service told the Committee in March
that 72% of people change their mind about what they will do with
their pensions savings as a result of talking to Pension Wise. As
he pointed out,
“that tells you that the vast majority of people, left to their
own devices, will probably make a poor decision.”
As far as I can see, the Government’s current policy will leave
the great majority of savers in exactly that position.
We need to do more. Government and regulators need to end their
indifference on this. We need at least a trial of auto-enrolment
into a service that enables better outcomes from pensions
savings. There will no doubt be difficulties, but let us at least
try it out. The Money and Pensions
Service has told the Committee that it would be
very happy to support a trial.
The Committee recommended that
“the Government sets a goal for the Money
and Pensions Service for the combined use of
Pension Wise and paid-for advice when accessing pension pots for
the first time”
of
“at least 60 per cent”...
(Kilmarnock and Loudoun)
(SNP):...In March 2020, the chairman of the Money and Pensions
Service Sir Hector Sants, told the Work and
Pensions Committee:
“A significant number of the people who contact Pension Wise will
come away saying that, after having spoken to our guidance
service, they have concluded that they should do something
different from what they had in mind in the first place… There is
a figure that suggests that 72% of people are saying they have
changed their mind about what they will do as a result of talking
to our guidance service. In a way, that is a simple statistic
that tells you that the vast majority of people, left to their
own devices, will probably make a poor decision.”..
The Parliamentary Under-Secretary of State for Work and Pensions
():...Let me try to address the point about the
signposting of Pension Wise by pension schemes. Wake-up packs are
provided on an ongoing basis, but we also believe very strongly
that impartial guidance from the Money and
Pensions Service is a very good thing. MAPS is a
very young institution. Parliament decided, following Select
Committee reports, to legislate to create it and it melded all
the previous operations together. It is a young institution—not
even four years old. We are gently trying to nudge it into a
greater take-up of all of its services, and it is part of the
dashboard delivery service, for example. Although Pension Wise
provides guidance about the options for accessing
defined-contribution savings, it is primarily designed for those
aged 50 and above who are making decisions about how to access
such savings.
However, we are ignoring the MoneyHelper pensions service,
formerly the Pensions Advisory Service. No one has mentioned it
in any way whatsoever. The stats show that there were 113,000
Pension Wise appointments in 2020-21, and that MoneyHelper
supported 220,000 people during that time. We are very focused. I
understand why, in discussing Pension Wise, we have not discussed
in any way all of the great work that the Money and Pensions
Service is doing with MoneyHelper on pensions. The
number of people using the service went up by 8% in 2019-20...
...Schemes will also be unable to proceed with any application to
access savings until members have either received or explicitly
and clearly opted out of guidance. For occupational schemes, the
opt-out must be given in a separate communication from the
member. We believe that that will ensure that all members are
required to make an active, informed choice on guidance before
they are able to access their savings. I believe that that
strikes the right balance and is the right way forward. Although
we all want to do more, Parliament has decided and has legislated
for the Money and Pensions
Service Pension Wise and the Department for Work
and Pensions to drive forward the stronger nudge as the way
forward. I urge colleagues to get behind that in the short
term....
For context, CLICK HERE
