Pension schemes are set to be altered going forward as a Pension Schemes Bill, that has been making its way through Parliament for some time now, officially becomes an Act. The new Act will, according to the Department for Work and Pensions (DWP), bolster protections for savers and further the Government’s green agenda by supporting progress towards net zero.
Guy Opperman, the Minister for Pensions, welcomed the announcement: “This is a historic day for UK pensions, and I’m thrilled that after more than 12 months, amidst all the challenges we’ve faced, the Bill has now received Royal Assent.
“This Act makes our pensions safer, better and greener, as we look to build back better from the pandemic.
“Its passage will reassure savers that they can, and will, have a retirement they deserve.”
The Act will strengthen protections for retirees by extending the power of the Pensions Regulator, introducing the power to issue civil penalties of up to £1million, alongside three new criminal offences.
The news of the new Act caught the attention of several experts within the field, with Peter Glancy, the head of pension policy at Scottish Widows, commenting on the changes: “The key elements of the Pensions Bill have in the main received cross-party support, which in itself underlines the importance of some of the measures, especially extra powers for the Pensions Regulator to protect pension scheme members from inappropriate employer behaviour.
“Looking to the future, the framework supporting pension dashboards will transform the way in which millions of us view and think about our retirement savings – although we’re still a few years away from these becoming a reality.
Renny Biggins, the Head of Retirement at the Investing and Saving Alliance (TISA), also responded to the news: “It’s fantastic that the Pension Schemes Bill has now received Royal Assent.
“The bill crucially sets out the framework for the introduction of pensions dashboards.
“Dashboards will help consumers better understand and manage their long-term savings by displaying information about their pension pots, including their pension arrangement and the name of the provider.
“Dashboards will also provide individuals with an estimated retirement income and the date payable for each pension.
“We hope that this will encourage savers to be able to plan better for later life and to consolidate their pension pots where appropriate, to ensure their pension savings are easy to manage.”
Renny concluded by calling for additional changes: “Though, we also understand that for many individuals comparing each providers’ investment charges and administration fees can be complex, so are calling for regulatory changes to allow more personalised financial guidance.
“This provision of financial guidance is critical for the 40 million UK adults who do not have access to financial advice.
“TISA is also leading the development of the Open Savings, Investments and Pensions elements of Open finance which will give consumers a holistic view of their finances, incorporating both assets and liabilities – pensions dashboards will be a key development in supporting the progression of Open Finance.
“The bill also includes the requirement for schemes to adopt and report against the recommendations of the Task Force on Climate-Related Financial Disclosures.
“This will encourage more sustainable investment strategies, will ensure more transparency and could boost engagement, as consumers are becoming increasingly interested in ESG and where their contributions are being invested.”
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