7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.
In this 7 Days
- Draft GMP Increase Order 2023 published
- Responses to WPC report on protecting pension savers published
- FCA announces thematic review of consumer advice
The draft Guaranteed Minimum Pensions Increase Order 2023 has been laid before Parliament. This Order specifies 3% as the percentage by which that part of GMPs attributable to earnings factors for the tax years 1988-89 to 1996-97 is to be increased from 6 April 2023. The percentage specified in the Order must be the lesser of the actual percentage increase in the general level of prices in the period under review and 3%.
On 23 January 2023, the Government, the FCA and MaPS’ responses to the WPC’s report on “saving for later life” were published. The report was the latest stage of the WPC’s three-part inquiry into protecting pension savers, looking at who is not saving enough for an “adequate” income in retirement and how to address this.
The Government’s response, originally due by 30 November 2022, includes confirmation that it remains committed to implementing automatic enrolment (“AE”) reform measures recommended in the DWP’s 2017 review of AE by the mid-2020s. The reforms include lowering the minimum age for AE from 22 to 18 and removing the lower limit of the “qualifying earnings band” so that minimum contributions are paid from the first pound of earnings. The Government aims to bring forward legislation “when parliamentary time allows”.
In its response, the FCA gave an update on work to clarify the boundary between advice and guidance. The FCA is “working with industry to determine how the regime currently works” and to address any issues that can be resolved without any changes to the current boundary. A further update is expected by the end of March 2023.
On 19 January 2023, the FCA announced that it will be undertaking a thematic review to examine how the retirement income advice market is functioning and how firms are responding to changing consumer needs as a result of the rising cost of living. The FCA aims to publish a report setting out its findings towards the end of 2023, and will engage with trade bodies in early 2023.