You can read the full response here: https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/1231/123102.htm
Key points
Government “not convinced” of merits of ‘default pathways’ for drawdown
NEST, the scheme set up by Government for auto-enrolment, could be allowed to offer drawdown to its own members
Policymakers also considering how ‘nudge’ theory can be used to boost take-up of retirement guidance
FCA Retirement Outcomes Review will be key in setting pension freedoms policy
Tom Selby, senior analyst at AJ Bell, comments:
“The Government is right to take a pragmatic approach on default drawdown. While the case for defaults in automatic enrolment – when savers are nudged into a pension scheme – is relatively clear-cut, the same cannot be said for drawdown, which requires savers to take an active role in managing their investments and withdrawals.
“Furthermore, those advocating ‘default pathways’ have yet to articulate how such a policy would be implemented in practise.
“For example, at what point would someone be defaulted into an investment? How many defaults would be required? How would the opt-out process work? And what would providers be required to do to ensure the default remains appropriate as a customer’s circumstances change?
“Until these and other basic questions are answered it would be irresponsible to press ahead with such a fundamental change to the pension freedoms, which have proven so popular with savers.
“That said, we recognise some savers are failing to engage adequately in retirement. We will continue to work with all stakeholders – including the FCA – to ensure any interventions are proportionate and feasible on a practical level.”