Guiding Principles for Default Pensions
The government has published its guiding principles for default pensions under Guided Retirement. These principles set out the intended outcomes for default pensions and the role they will play in helping savers achieve a sustainable retirement income without needing to make complex financial decisions.
Applies to England, Scotland and Wales
Documents
Details
This paper sets out the government’s guiding principles for default pensions and the outcomes they are intended to deliver for pension savers. It explains how default pensions will support individuals in retirement by providing a straightforward pathway to a sustainable income while preserving freedom of choice. The principles recognise that decisions about how to use pension savings in later life can be complex and that many savers may benefit from greater support when accessing their pension.
The document outlines the outcomes the government expects default pensions to achieve, including reducing the need for complex decision-making, providing protection against longevity risk, supporting clear and simple member journeys, and ensuring individuals continue to have the freedom to choose alternative options if they wish. The principles will help shape the detailed framework for Guided Retirement as implementation progresses through secondary legislation, regulatory guidance and industry engagement. The Financial Conduct Authority (FCA) are also required to introduce rules which so far as possible achieve the same outcomes, to ensure default pensions are made available by the workplace pensions they regulate; the principles in this paper should be considered to apply across the whole of the market.