Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential merits of introducing an opt-out option for members of pension schemes with safeguarded benefits who are required to take advice under section 48 of the Pension Schemes Act 2015.

The overarching objective of the advice requirement is to ensure that members understand the financial implications of transferring to a scheme with flexible benefits. The process enables a clear view of the choices available to the individual and the longer term risks attached to accessing flexible benefits.

The government has to consider the needs of all pension savers regardless of their individual circumstances and it believes that enabling members to make informed investment decisions will yield greater long term financial stability for the individual. It is not therefore policy to introduce an opt out option to this part of the transfer process.

In forming this view, DWP has engaged with pensions industry bodies, the regulators and consumer groups to review The Pension Schemes Act 2015 (Transitional Provisions and Appropriate Independent Advice) Regulations 2017. The review considered how the advice requirement is working in practice and if there are any unintended consequences. A report of the review was published in June 2023 and is available on gov.uk.

Whilst the report concluded that the existing measures remain appropriate and effective, the department will continue to work closely with HMT and FCA to consider changes to the regulations that will improve the transfer process whilst ensuring that members continue to receive an appropriate level of protection and support.