Pension Schemes Bill [Lords] — House of Commons, 2020-11-16
Topic: Domestic Commerce
Stephen Creswell Timms (Labour, Centre-left): I am very grateful to the Minister for that assurance, and I look forward to monthly publication resuming To answer my hon. Friend the Member for Wallasey (Ms Eagle), who I am delighted to see in her place, at the Treasury Committee a couple of weeks ago the chair of the Financial Conduct Authority spoke about defined-contribution pension savers. He said: "This issue about people making poor choices when exercising the freedoms…is probably the one that I worry about most of all." He went on to say that safeguards need to be "as strong as they humanly can be" The FCA has had a go. As the Minister pointed out in Committee, last November the FCA introduced new rules requiring clearer signposting and promotion of pensions guidance. However, it has not worked. FCA data shows that just 14% of pension pots were accessed after guidance was taken in the six months from October 2019 to March 2020—exactly the same proportion as before the new rules It was not just George Osborne who had the ambition that everybody should benefit. The Treasury’s public financial guidance review, published for consultation in March 2016, said: "Guidance is vital to ensure that individuals are fully aware of their options before they make a decision on what to do with their retirement savings" The then Economic Secretary, the hon. Member for West Worcestershire (Harriett Baldwin), said the following month that the Government were introducing "a requirement that, in effect, ensures that consumers with a high-value annuity receive appropriate financial advice before making the decision to sell their annuity".—[Official Report, 19 April 2016; Vol. 608, c. 876.] Today, unfortunately, there is no such requirement. Two years later, in April 2018, her successor, the hon. Member for Salisbury (John Glen), who is the current Economic Secretary, said that, before proceeding with an access or transfer application, "subject to any exceptions, schemes must ensure that individuals have either received Pension Wise guidance or have opted out."—[Official Report, 24 April 2018; Vol. 639, c. 831.] That aspiration has simply not been delivered. Today, the Government are taking steps that their own investigation says would make it true in 11% of cases. New clause 1 would finally deliver on the commitment that the Economic Secretary thought he was delivering on two years ago It was not just the Treasury. The noble Baroness Buscombe, who was a Minister in the Department for Work and Pensions at the same time as the current Minister, said in the other place on 1 May 2018: "We all want people to make more informed decisions and to make it the norm to use Pension Wise before accessing their pension."—[Official Report, House of Lords, 1 May 2018; Vol. 790, c. 1995.] Everybody agreed that it should be the norm. Today, the Minister has set his ambition at 11% take-up. How can it be that ambition in his Department has shrunk so far? New clause 1 would resolve it using auto-enrolment to increase the take-up of guidance, just as it has been used so successfully to increase pension saving.