Govt backs down on default guidance plan for pension freedoms

An amendment to the Financial Guidance and Claims Bill that would have seen people automatically enrolled into guidance if they wanted to take benefits under pension freedoms or transfer benefits has been removed.

The change follows a debate in the House of Commons earlier this week where pensions minister Guy Opperman pledged his support for default guidance for people wanting to take advantage of pension freedoms.

Now, instead of being automatically enrolled into guidance, providers must ask customers if they have received “appropriate” pensions advice or “appropriate” independent financial advice.

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If the customer says they have not had either guidance or advice the provider will have to recommend they do so and ask them if they want to wait until they have got guidance or advice before accessing their pot or transferring or if they want to go ahead without it.

AJ Bell senior analyst Tom Selby says the amendment is a vast improvement and should have the short-term benefit of increasing awareness of the value of advice and guidance.

Selby says: “The original ‘auto guidance’ amendment was a bit of a dog’s breakfast. Automatically enrolling members into guidance for each transfer or every time they took money from their own pension pot – when they have already decided what they want to do – would have caused massive delays and huge complaints.”

He adds the amendment gives the FCA time to consult on alternative nudges towards guidance.



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  1. Sounds like a good move.

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