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The ‘reform the private pensions system’ Act

Bill Passed

27th
Apr.

Current
Stage

What

  • To ensure that Master Trusts (multi-employer pension schemes) are properly regulated and meet strict criteria before taking money from employers or members

  • To cap early exit fees charged by trust-based occupational pension schemes

  • To provide more targeted public financial guidance through the creation of two new bodies (one for pensions guidance and another for money guidance)

Why

This Bill would provide better protection for members of private pensions schemes and give customers more freedom to access their pensions - there are currently nearly 700,000 customers in contract-based schemes who could face some sort of early exit charge.

The new structure of public financial guidance would mean that more funding can be directed to the front line.

Who

Damian Green MP and the Department for Work and Pensions are responsible for this one.

Other Arguments

Former Shadow Secretary for Work and Pensions, Rachel Reeves MP, has criticised the Bill’s lack of ambition; she says it fails to increase tax relief on pensions for low and middle income earners, which could have provided a strong incentive for them to save more money for their pensions.

Some also argue that early exit fees are necessary to stop people squandering their pensions savings and capping these fees could mean that people are more likely to dig into their savings now and not have enough for the future.

How to get involved

Speak to your MP.

If I don’t act, will it go through?

As a Government Bill, it is very likely to go through.

Additional Information