The Department for Work & Pensions has published a call for evidence to explore what support members of pension schemes need to make informed decisions about their savings.
In an open consultation titled 'Helping savers understand their pension choices', DWP said it wants to understand what support and decumulation products are currently on offer to members, and what may be offered to them in the future.
The call of evidence, published today (June 14), is aimed at individuals who want to understand savings and welcomes input from pension scheme members, consumer organisations as well as trustees and scheme managers.
The consultation builds on research by the Financial Conduct Authority which found many people who save into a pension scheme choose the "path of least resistance" when it comes to accessing their pot.
Often they take an income from their current pension provider without shopping around for the best product, or without being aware of how their savings are being invested.
Based on this research, the FCA introduced measures for personal pensions, aimed at supporting people to get the most out of their pension savings.
DWP said it wants to achieve similar and hopefully even better outcomes for people saving into occupational pensions.
Pensions minister Guy Opperman said: “Deciding how to use your workplace pension savings is one of the most important financial decisions many people will make.
“Automatic enrolment has introduced over 10.6mn people to pension saving and we want to ensure the record number of Brits now saving for retirement have the support and information they need to make informed choices about accessing their hard-earned savings.”
DWP said those saving into these pensions should also have access to support that allows them to make informed decisions and achieve what they want from their pensions.
LCP partner Steve Webb welcomed the government's move but said there need to be more focus on the post-retirement landscape.
“One priority for the DWP will be to focus not just on what happens at retirement but also on the journey through retirement,” he said. “Most people will have modest pension pots and no access to financial advice, so they need products which will work for them without needing active engagement or investment expertise.”
He added: “The idea of a ‘flex first, fix later’ pension could be one such product, combining the best of both worlds – the flexibility and growth potential of drawdown and the certainty of a late life annuity. I hope that this DWP consultation will give proper attention to what happens post-retirement, as the right strategy at retirement may not be the right strategy 10 or 20 years later”.
The call for evidence aims to find out, in particular from people saving into workplace schemes, what information and support they expect in the lead up to taking their pension, at the point when they want to access their savings and after they have started to use their savings.