Published 18 February 2015 | Standard notes SN07042
In Budget 2014, the Government announced that from April 2015, individuals aged 55 and over will be able to access their defined contribution (DC) pension savings as they wish, subject to their marginal rate of income tax. The changes to pension tax legislation necessary to implement this are in the Taxation of Pensions Act 2014.
The Government said it recognised that people would need help navigating the expanded range of options that would become available to them. To help them make informed decisions, it would introduce a guarantee that all individuals with a DC pension would be offered guidance at the point of retirement that was: impartial and of consistently good quality; covered the individual’s range of options to help them make sound decisions and equip them to take action, whether that is seeking further advice or purchasing a product; and was free to the consumer and offered face to face.
In October 2014, it announced that the guidance service would be delivered by Citizens Advice, which would provide guidance face to face, and the Pensions Advisory Service, which would deliver it by phone. The Treasury, in conjunction with the Money Advice Service, would design an online service. HM Treasury an update of its plans for Delivering pensions guidance on 12 January 2015. It also announced the name and logo of the new service – Pension Wise.
The Financial Conduct Authority will be responsible for establishing standards and monitoring compliance with this. Following consultation (CP14/11), it issued a policy statement on 27 November 2014 (PS14/17). On 26 January, it announced plans to introduce additional protections for consumers ahead of the pension freedoms (a 'second line of defence').
Provision for the guidance service is in the Pension Schemes Bill 2014-15 (clause 47 and Schedule 3, HL Bill 90). The Commons is due to consider the Lords amendments to the Bill on 24 February 2015.