We strongly support the government’s objective of ensuring people achieve good financial outcomes in retirement. If introduced, Retirement CDCs could provide an additional retirement solution. But it's important to recognise that they are not a silver bullet. No single product will suit everyone’s needs. Current proposals mean there is no mechanism to leave a retirement CDC scheme once joined. This potential for harm will be exacerbated if not addressed, as through guided retirement, savers could be defaulted into a scheme. It is important that a cooling off period is built into proposals.
Choice is a key feature of retirement. Savers must have all the necessary information to help them understand which product is right for their circumstances, including that with CDC their income can go down as well as up.
Justin Wray
Assistant Director, Head of Long-Term Savings Policy