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Millions of pension savers risk missing out on free targeted support, warns People’s Pension

The provider called on the Government to extend the targeted support framework to people saving through trust-based workplace pensions.

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Millions of pension savers risk missing out on free targeted support, warns People’s Pension
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People’s Pension has warned that millions of workplace pension savers could miss out on free targeted support because of how their scheme is regulated.

The provider called on the Government to extend the targeted support framework to people saving through trust-based workplace pensions.

The framework applies only to contract-based pension providers regulated by the Financial Conduct Authority (FCA).

Trust-based schemes, including master trusts overseen by The Pensions Regulator (TPR), are outside the FCA framework. 

Their members are therefore unable to access targeted support through their scheme.

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People’s Pension said this could create a two-tier system, with savers receiving different levels of support based on the scheme chosen by their employer.

Targeted support could help people who are not saving enough, explain retirement income options and flag when withdrawals may cause pension savings to run out.

Trustees can provide some personalised support, but People’s Pension said the lack of a clear legal and regulatory framework created compliance risks.

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It called on the Government to introduce a TPR-supervised framework for qualifying occupational pension schemes. 

This would give trust-based savers access to support and protections equivalent to those available through FCA-regulated schemes.

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David Meliveo, chief commercial officer at People’s Pension, said: “Targeted support is a fantastic opportunity to help millions of people with their pensions who are never likely to have a traditional financial adviser.

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“We cannot end up with a two-tier system where the vast majority workplace pension savers miss out on targeted support simply because their employer chose a Master Trust rather than a Group Personal Pension. 

“People do not think about whether their pension is FCA or TPR regulated when deciding whether they are saving enough, how to generate a retirement income or how to make their money last through their later life.”

Meliveo added: “They just want straightforward help to make a better decision.

“We want to be able to offer People’s Pension members the same kind of targeted support that contract-based providers are now developing. 

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“Government has an opportunity to create a level playing field that allows trust-based schemes to do that safely, so the type of pension someone’s employer chose does not dictate the quality of help they get.”

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