7 days

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 published

The draft Guaranteed Minimum Pensions Increase Order 2022 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 2022. 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%.

TPR publishes blog encouraging trustees to report pension scams

On 18 January 2022, TPR published a blog on pension scams, saying that every administrator, trustee and provider should take responsibility for protecting savers, including reporting suspected scams to the authorities, as well as joining TPR’s pledge to combat pension scams (see 7 Days).

TPR updates scheme return for DB and hybrid schemes

TPR has changed the DB and hybrid scheme returns for 2022.  The return will be issued in two parts and contains some new questions for this year.  For example, if DB trustees have assessed the employer covenant, they will be asked for the assessment date and to select a grade between 1 and 4.  DB and hybrid schemes will also be asked to provide the website addresses where the following have been published:

  • the scheme’s SIP and implementation statement (for schemes with more than 100 members)
  • the scheme’s climate change report (for schemes that need to comply with the new climate change governance and reporting requirements from 1 October 2021)
  • extracts from the chair’s statement (for hybrid schemes that need to produce a chair’s statement).

Scheme return notices will be issued from the end of January 2022, and must be completed and submitted by 31 March 2022.

WPC publishes report on accessing pension savings

The WPC has published a report on accessing pension savings.  The report calls on the Government and regulators to play a more active role in supporting savers to help them make better decisions about their money.  WPC’s report recommends:

  • the Government sets a goal of at least 60% of people to be using Pension Wise or receiving paid for advice when accessing their pension pots for the first time
  • the trial of automatic Pension Wise appointments. The Government should initiate two trials: one with an appointment when a person accesses their pension for the first time and another at the age of 50, before they can access their pension savings
  • the Pensions Advice Allowance, which allows £500 to be withdrawn from a pension up to three times in different tax years for advice, should be overhauled with the annual limit removed and MaPS and advisers encouraged to signpost its use.

PAC publishes report on the underpayment of state pensions

The Public Accounts Committee (“PAC”) published its report on the underpayment of state pensions on 21 January 2022.  It notes that the DWP estimates that it underpaid over 130,000 pensioners over £1 billion since 1985.  PAC concluded that the payment system is not “fit for purpose” and recommends that “[a]s a matter of urgency, the Department should consider whether there are cost-effective ways to upgrade its IT systems and enhance its administrative processes to ensure the quality and timeliness of management information and reduce the risk of repeated errors”.