Of interest to all pension savers and schemes is the launch by HM Treasury on 12 January 2015 of its “Pension Wise” branded service which will deliver the free, impartial guidance for savers with DC pension pots. The full service offering online, phone line or face-to-face guidance will be available from April 2015, when individuals aged 55 or over will be able to access their DC pensions under the new flexibilities. However, it is possible to register for pilot access to the service in February 2015, and to provide feedback on possible improvements.
The Pension Wise service will be delivered in partnership with the Pension Advisory Service (TPAS) over the phone, and Citizens’ Advice Bureaux for face-to-face guidance.
Under the Pension Schemes Bill 2014-15, key provisions were announced during its report stage in the House of Lords on 27 January 2015:
- the Financial Conduct Authority (FCA), which regulates contract-based schemes, will require providers to ask consumers seeking flexible DC access who choose not to use the Pension Wise service about key aspects of their circumstances relating to their choices. Under this “second line of defence”, providers will be required to give appropriate risk warnings, highlighting such potential pitfalls as seeking advice from unregulated providers, not checking the tax implications before cashing in a pension pot, and failing to take sufficient life expectancy into account;
- the Government has confirmed that the DWP is working with the Pensions Regulator on how the “second line of defence” could be extended to trust-based schemes; and
- in relation to DB to DC transfers, there will generally be a requirement to check that a member has received appropriate advice. The Government proposes that an exception will be made where the transfer is below £30,000, which is the maximum amount that may be paid as a trivial commutation lump sum.
The third reading of the Bill took place on 5 February 2015, with Royal Assent targeted for the last week in February.