This briefing sets out the Foundation’s evidence to the Work and Pensions Select Committee’s inquiry into pension reform. The Foundation has not commented on the merits of the Pensions Commission’s proposals. However, we believe that the reform process offers an opportunity to address the potential advice needs of people on medium to low incomes, particularly in relation to the proposed NPSS.
- Pensions decisions are among the most complex and vital financial choices people make during their lifetime, yet understanding of the pensions system remains low.
- We believe that generic, non-regulated advice has a critical role to play in helping people make the right decisions in planning and saving for their retirement.
- The pensions reform process provides an opportunity to ensure that advice needs are addressed. However, access to advice is an area the Pensions Commission neglected. This should be addressed in the Government’s forthcoming White Paper on pensions reform.
- In many respects, people on medium to low incomes have most to gain from the proposed reforms. It is essential that the ‘advice gap’ is filled if pensions reform is to meet its objectives and enable people in this income group to understand their options under the proposed NPSS and make informed decisions across their pensions lifecycle.
- We believe that generic, non-regulated advice on pensions should be made available as part of a broader national financial advice resource. We are currently researching cost effective options for providing such a service, which could be delivered through a public-private partnership.