Pensions Bill – read all about it

master trust3

This post is taken from the DWP’s briefing notes on what we can expect. Since publication, Ros Altmann, the Pensions Minister has confirmed to the FT (and by RT to Pension Plowman and Jo Cumbo) that the measures relating to master trusts will apply to existing master trusts as well as those yet to be launched.

The FT understands that these measures will include a capital adequacy requirement for master trusts meaning they will have to have a reserve of contingency cash (reserves) to call upon if things go wrong.


Briefing notes to the Queens Speech, delivered on 18 May 2016.

The purpose of the Bill is to: Further reform Britain’s private pensions system by:

  • Providing essential protections for people in Master Trusts – multi-employer pension schemes often provided by external organisations.
  • Removing barriers for consumers who want to access their pension savings flexibly
  • Restructuring the delivery of financial guidance to consumers.

The main benefits of the Bill would be:

  • Providing better protections for members in Master Trust pension schemes – including millions of automatically enrolled savers.
  • Capping early exit charges to ensure that excessive charges do not prevent occupational scheme members from taking advantage of pension freedoms.
  • Providing more targeted support for consumers by restructuring the delivery of public financial guidance through the creation of two new bodies and directing more funding to the front line.

This helps deliver the manifesto pledge to give you the freedom to invest and spend your pension however you like.

The main elements of the Bill are:

Master Trusts

Master Trusts would have to demonstrate that schemes meet strict new criteria before entering the market and taking money from employers or members. Creating greater powers for the Pensions Regulator to authorise and supervise these schemes and take action when necessary.

Cap on early exit charges

Capping early exit fees charged by trust-based occupational pension schemes. Creating a system that enables consumers to access pension freedoms without unreasonable barriers.

Restructuring financial guidance

A new pensions guidance body would be created, bring together the Pensions Advisory Service, Pension Wise and the pensions services offered by the Money Advice Service, providing access to a straightforward private pensions guidance service for customers. A new money guidance body would replace the Money Advice Service and be charged with identifying gaps in the financial guidance market to make sure consumers can access high quality debt and money guidance.

Money guidance body

The new guidance bodies will operate UK wide, and financial services is a reserved matter. However, devolved administration issues may arise due to links with financial education (devolved). These are not likely to be contentious and we are in discussion with the devolved administrations.

Key Facts

We have already seen over six million people automatically enrolled into workplace pensions since 2012, reversing the downward trend in private pensions participation.

As of January 2016, almost 400,000 pension pots have been accessed flexibly under the new freedoms with many providers offering their customers a range of options.

Data collected by the Financial Conduct Authority shows that currently nearly 700,000 (16%) customers in contract-based schemes who are able to flexibly access their pension could face some sort of early exit charge.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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4 Responses to Pensions Bill – read all about it

  1. Kate Upcraft says:

    Excellent news, thanks for being the first as ever to spread the word. Now we can take AE to the next level in terms of engagement and financial security for members and employers

  2. henry tapper says:

    It’s a long way from being an Act Kate – but at least it will deter new ones! I won’t sleep easy until we have good buyers and we’re a long way from getting 1.7m remaining employers knowing good from bad on pension matters!

  3. Gerry Flynn says:

    This new body that will be providing financial advice will it be for free?

  4. henry tapper says:

    I believe it is the successor to Pension Wise and will be adopting PW’s pricing structure (eg free)

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