Government sets out plans for guidance guarantee

The government has announced that its guaranteed guidance on pensions choice will be provided by independent organisations rather than pension providers.


The changes, which were announced in the Budget in March and will come into effect from April 2015, follow the government’s consultation on how best to deliver the changes to how people access their pensions.

The guidance guarantee will bring together a range of delivery partners, including The Pensions Advisory Service and the Money Advice Service, which already provide guidance and support to pension savers.

The guidance will be offered through a broad range of channels, including web-based, phone-based and face-to-face.

A levy on regulated financial services firms will pay for the free guidance.

The government’s response to the consultation also confirmed that:

  • It will continue to allow individuals to transfer from private sector defined benefit pension schemes to defined contribution (DC) pension schemes, subject to two new safeguards: a new requirement for an individual to take advice from an impartial financial adviser regulated by the Financial Conduct Authority (FCA) before a transfer can be accepted; and new guidance for trustees on the use of their existing powers to delay transfer payments and take account of scheme funding levels when deciding on transfer values.
  • A new override will be introduced so that pension schemes are able to offer individuals flexible access to their savings and the pensions tax rules will be amended to allow providers to develop new retirement income products that are tailored to the needs of individual pension savers.

The FCA has also published a paper that consults on the elements of the guidance guarantee for which it will be responsible.

This includes setting and monitoring the standards with which guidance providers will have to comply, making and enforcing rules on how contract-based DC schemes signpost to the guidance services, and adjusting the FCA’s existing conduct rules to support the introduction of the guidance guarantee and in response to the new flexibilities.

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Chancellor George Osborne (pictured) said: “It’s right to support hard-working people that have taken the long-term decision to save for their future and I’m pleased that the responses we had to our proposals on making pensions more flexible have been overwhelmingly positive.

“We’re making sure that people have the right support to make their own choice about how best to finance their retirement and I’m pleased to confirm that everyone with DC pension savings reaching pension age will get free and impartial guidance on their range of available choices at retirement.”