Government waters down default guidance proposals
The government has removed an amendment to the financial guidance and claims bill which would have automatically enrolled people into guidance as they seek to access their pots or transfer benefits.
Providers will instead have to ask customers wanting to make use of the freedoms whether they have received ‘appropriate pensions guidance or appropriate independent financial advice’.
If neither guidance nor advice has been received, the provider will have to recommend obtaining guidance or advice.
Providers will also be required to ask the member if they wish to wait until receiving guidance or advice before accessing their pot or transferring, or proceed without it.
The Work and Pensions Committee had previously recommended mandatory guidance, while pensions minister Guy Opperman had highlighted the need “for people to receive a further nudge” towards guidance, during a debate in the House of Commons on Monday.
The recent amendment provides much-needed clarity on the issue of default guidance.