Pensions Bill to create new guidance bodies

The first will bring together the Pensions Advisory Service, Pension Wise and the pensions services offered by the Money Advice Service.

Additionally, a new money guidance body would replace the Money Advice Service and be charged with identifying gaps in the financial guidance market.

The Bill also aims to provide further protections for people in Master Trusts - multi-employer pension schemes often provided by external organisations.

Under the new rules, Master Trusts would have to demonstrate that schemes meet strict new criteria before entering the market and taking money from employers or members.

The Bill has granted extra powers for the Pensions Regulator to authorise and supervise these schemes and take action when necessary.

Early exit fees charged by trust-based occupational pension schemes will also be capped.

However former pensions minister Steve Webb has branded the Bill as 'very disappointing'.

Webb explained: "Whilst measures to improve the regulation of workplace pensions and reorganise financial guidance are welcome, the elephant in the room is the under-saving crisis in the UK, and this Bill will do little to address that problem. The DWP’s own figures show that more than 12 million people are not saving enough for their retirement and this Bill will barely scratch the surface of that problem. Urgent action is needed to get employees saving more than the statutory minimum of 8% of their pay, and also to get more than two million self-employed people into pension saving for the first time. Regulators also need new powers to protect people’s pensions when corporate transactions leave workplace pension rights at risk. Unless new powers are added to the Bill during its passage through Parliament it will simply fail to address the big issues in pensions.”

Kate Smith, Head of Pensions at Aegon, added: “I’m extremely disappointed that the government has failed to use the Queens Speech as an opportunity to tackle the ever-growing threat of pensions fraud via legalisation. We still need to look at ways for the industry, regulators and pension industry to work together to raise the profile of pensions fraud to stamp it out and protect savers.”