The Pension Schemes Bill has nearly completed its passage through Parliament, taking a step closer this week as Peers considered the Bill at its Report Stage in the Lords. As you’d expect, Age UK has taken a keen interest in this Bill, which is part of the Government’s wider ranging reforms to pensions announced by the Chancellor in the Budget last spring – the most significant changes to private pensions for over a generation.
From this April, there will be great flexibility, and greater choice for older people to access their retirement savings but with greater choice comes more responsibility, and potential complexity and risks, for older people making these important choices. Generally speaking, the pension reforms are a really welcome move giving those with pension savings approaching retirement freedom and greater options about how to access their money. However, with greater flexibility can also come greater risks for consumers.
Recent analysis for Age UK has highlighted some of these risks and practical steps that could be taken to protect consumers. One of the fears is that the reforms could lead to significant numbers of older people running out of money, unless stronger safeguards are put in place. Age UK’s report, Dashboards and Jam-jars, calls for measures including quality standards and charge caps to be introduced on income drawdown products. Despite the planned introduction of pensions guidance alongside these reforms, Age UK remains concerned that there are not enough safeguards in place to help people understand the impact of their decision and make the most of their savings.
We have been calling on parliamentarians and the Government to make changes to the Pension Schemes Bill which would strengthen the protections for individuals, at the same time as maintaining the extremely welcome new freedoms for those retiring to choose how to spend the money they’ve saved in their pension pots.
Find out more about the upcoming pension changes by reading our blog post