The Department for Work and Pensions (DWP) has called for views on decumulation and helping savers understand their pension choices.
The Call for Evidence seeks views on supporting pension savers in the lead up to accessing their savings.
The call comes after research from the Financial Conduct Authority (FCA) which found many people choose “the path of least resistance” when it comes to accessing their pension savings, often taking an income from their existing pension provider without shopping around or being aware of how their savings are being invested.
The DWP said it wants to support savers by helping them understand the variety of options available when taking their pension savings, whilst ensuring protections are in place for those who do not engage with pension choices.
Guy Opperman, Minister for Pensions, said: “Deciding how to use your workplace pension savings is one of the most important financial decisions many people will make.
“Automatic enrolment has introduced over 10.6 million people to pension saving, and we want to ensure the record number of Brits now saving for retirement have the support and information they need to make informed choices about accessing their hard-earned savings.”
The Call for Evidence will inform what Government action is needed to help pension savers make the most of their retirement choices.
The Call for Evidence can be found on the Government website.
Former Pensions Minister and partner at pensions consultancy LCP Steve Webb welcomed the consultation, but said it needs more focus.
He said: “One priority for the DWP will be to focus not just on what happens at retirement but also on the journey through retirement. Most people will have modest pension pots and no access to financial advice, so they need products which will work for them without needing active engagement or investment expertise. The idea of a ‘flex first, fix later’ pension could be one such product, combining the best of both worlds – the flexibility and growth potential of drawdown and the certainty of a late life annuity.
“I hope that this DWP consultation will give proper attention to what happens post-retirement, as the right strategy at retirement may not be the right strategy ten or twenty years later.”
