Following successful trials, the Department of Work and Pensions (“DWP”) announced proposals last  Wednesday to introduce a “Stronger Nudge” regime, as part of a package of measures aimed at helping savers make better-informed decisions when it comes to accessing their pension savings, and to further protect them from scams.

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The Stronger Nudge Regime

Under plans laid out in the DWP’s recent statement of policy intent, occupational pension schemes will be required to “nudge members” towards taking guidance from Pension Wise at the point at which they seek to access their pension. The Pension Wise service provides free, impartial guidance to over 50s, to help them understand what options are available to them.

Members of defined contribution pension schemes have had the ability to access their pension benefits from the age of 55, since legislation introducing Pension Freedoms came into force in 2015. Individuals have since had greater choice when it comes to accessing and dealing with their pension savings.

The “Stronger Nudge” regime will be implemented following a 19 week trial, which ran until February and was conducted on a sample of 4,135 pension holders. The trial was “successful at increasing the proportion of pension holders booking and attending a Pension Wise appointment compared to business as usual.”    

According to the DWP, demand for the Pension Wise service continues to grow. Over 200,000 telephone appointments, face-to-face appointments, online sessions and other interactions were delivered by the Money and Pensions Service in 2019/2020 – more than triple those delivered when it was launched in 2015.

Guy Opperman, Minister for Pensions and Financial Inclusion, has said that the regime will “advance the Government’s goal of ensuring that people have the necessary support and information to make informed choices about their financial futures” and that he wants “taking guidance to become a natural part of the journey savers embark on when making decisions about their pension pots.”  He further noted that “these measures will help protect consumers from scams.

The statement of policy intent ends by setting out the next steps for action, which will be to introduce the required regulations to implement the regime. The FCA will also consult on the rules implementing the regime in due course.


Pensions professionals should take note of this statement of policy intent, and watch out for the introduction of the regime to ensure that they are compliant.

For critics of the Pension Freedoms, this will be a welcome change. As the statement itself notes, the “Stronger Nudge” regime strikes a balance between encouraging people to take guidance when making decisions in relation to their pensions, without “removing the element of personal choice” which the Pension Freedoms allow for.

The new regime will also help to tackle the issue of pension scam activity, which is particularly relevant now after XPS Pensions Group found scam warning signs in half of post-Lockdown pension transfers.