A new workplace pension rule is set to be brought in next year, affecting an estimated 20million Brits

The default decumulation duty is included in the Pension Schemes Bill, sponsored by the DWP , and amendments to which, suggested by the House of Lords, are set to be discussed by members of parliament (MPs) on April 15, reports Express

It would require UK trust-based defined contribution pension schemes to provide automatic, guided retirement income options for their customers

READ MORE: £200 cost of living payments arriving from DWP even if you don’t claim benefits Get breaking news on BirminghamLive WhatsApp , click the link to join The legislation would mark a significant change in the way schemes supported Brits approaching the end of their working lives, requiring them to design, offer and keep under review one or more default retirement options, or help people to transfer to other arrangements that would better suit their decumulation needs, law firm Burges Salmon explained

Decumulation is the process of spending or drawing down accumulated retirement savings and investments to create a steady income stream, usually starting at retirement

Many scheme members are “passive or disengaged”, experts said, and “may be unlikely to make active choices about their pension at retirement”

This can lead to poor financial decisions at retirement, like choosing “inappropriate income options”, or “failing to plan adequately for longevity”

A DWP impact assessment of the Pension Schemes Bill predicts that 20million people may benefit from the legislation

The analysis added that evidence showed individuals do not shop around for pension products, and 38% of UK adults rated their knowledge of financial matters as “low”

“Therefore, it is reasonable to assume a default decumulation product is likely to shift behaviour for many individuals,” it read