The Work and Pensions Committee has launched an inquiry to investigate whether the pension freedom and choice reforms, introduced in 2015, are successfully operating as the policy intended.
Its call for evidence, which will be open to responses until Monday 23 October 2017, has asked for feedback on whether the freedom and choice reforms are achieving their set objectives with regards to pension savings, or whether policy changes are needed to make the reforms more effective.
The inquiry will also collect evidence on what individuals are choosing to do with their pension pots and how they make decisions around their retirement savings, whether people are taking advice and guidance or following any received advice and guidance around their pension savings, and ask whether public financial guidance bodies, such as Pension Wise, are working as they should to help savers.
In addition, the inquiry is seeking written feedback on how the pensions dashboard will be able to help pension savers make more informed decisions, whether there are any prominent gaps in the advice and guidance market that need filling, and if automated advice and guidance is effective.
It will also explore the pensions product market more widely, to investigate the annuity market, the effects of market competition, and whether savers are switching providers when accessing their pension pots, as well as ask whether the government and the Financial Conduct Authority (FCA) are taking adequate steps against pensions scams.
Frank Field MP, chair of the Work and Pensions Committee, said: “Pensions freedom and choice liberated savers to choose what they wanted to do with their own money. This was welcome, but as with any radical reform it [is] important to monitor its practical effects closely to ensure it is working as envisaged. In this case, it is vital that adequate support ensures people are equipped to ensure they don’t make decisions they subsequently regret.
“I am particularly concerned that savers are more vulnerable than ever to unscrupulous scam artists. This policy must not become the freedom to liberate people of their savings.”
Darren Philp, director of policy at The People’s Pension, added: “The pension freedoms have revolutionised the savings industry, but these freedoms are also fraught with danger. While these freedoms have engaged some savers with a sense of ownership over their pensions, our research has shown that, even when engaged, many are still confused about where they can get the help they need to make the right decision.
“The Select Committee is increasingly tackling the hard questions in pensions and it is imperative that the government, regulators and the industry reflect hard on the impact of the 2015 reforms to ensure they deliver for savers.”