DWP provides ‘stronger nudge’ to help Britons make the most of their pension

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The DWP wants to provide pension savers with the opportunity to make the most out of their pot. Its latest consultation, then, seeks to “nudge” Britons towards taking appropriate pension guidance to help with retirement planning. Pension saving can be a long term endeavour with many individuals planning their retirement decades in advance.

However, simultaneously, many can feel confused about what their pension means, and what retirement will have in store for them.

At present, when people wish to access their pension savings for the first time, a pension scheme is only required to point them towards free, impartial guidance.

This is available through Pension Wise, the Government’s service to help people with their retirement savings.

However, it has been argued that this is not enough, with many people currently not taking up the offer of this kind of guidance.

As a result, new ’stronger nudge’ rules have been laid out to help improve the situation.

The proposal states pension trustees and pension scheme managers may need to make sure the individual has either received guidance or actively opted out of receiving it before an application can be processed.

Pension Wise guidance, the report states, has been particularly useful to those who are planning for their retirement.

Some nine in ten appointment customers have agreed the service allows them to consider their pension access options in more detail.

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And 89 percent said they had learnt something new by making use of the service. 

Minister for Pensions, Guy Opperman, commented on the developments.

He said: “It is vital that savers have the support they need when making decisions about their pension pots that could have serious financial consequences for them in later life.

“Pension Wise is a fantastic service that offers free, impartial guidance and so I want to see as many people as possible using it.

“This change is vital in preventing savers from failing to take advice and increasing the take-up of the guidance that is available.”

Some individuals may also seek out their own pension advice, perhaps by speaking to a financial adviser.

But generally, before making any decisions about one’s retirement savings, speaking to someone about the actions one plans to take is key. 

The consultation period is set to run until September 3, 2021 to give as many people as possible the opportunity to contribute.

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Individuals must make sure their response reaches the Government by this date to ensure their opinions are taken into account.

They can do so by emailing [email protected] and highlighting that they are responding specifically to the ‘stronger nudge’ consultation. 

The Government response to the matter will then be published in due course via its website. 

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