On 19 June the new Pensions Minister delivered her first speech to the House of Lords on private and state pensions. She confirmed that her three main priorities were the delivery of the new state pension; rolling out auto-enrolment to all employers; and ensuring customers are treated fairly in the new pensions landscape.
Ms Altman praised the new state pensions system which will reduce means testing but indicated there was more work to do on clear communications for people to understand the reforms.
Motivated by social justice, Ms Altman will instigate an independent review of the state pension system by 2017 to consider life expectancy and wider social factors. She also spoke of a looming crisis in social care funding caused by an ageing population and a need to increase efforts for people to save for later life.
Ms Altman praised the success of auto-enrolment to date but said that, as only 4% of employers have to date had to deal with auto-enrolment, there was a challenge ahead. She said she was conscious of the position of micro employers but did not indicate any plans yet to carve out these small employers from their auto-enrolment obligations. Watch this space!
She praised the pension flexibility changes brought in by the last government and the tax system which she said incentivises people to keep money in pensions until later life. She indicated there are now strong reasons for people to keep pensions rather than spend them too soon.
Ms Altman indicated her disappointment with the approach of many pensions providers in relation to the pensions flexibility changes – namely that too many firms are not offering any new options to customers or are imposing charges, delays or penalties for transfers. She indicated that the customers must come before the needs of profit-making large financial firms.
It is clear we have a Pensions Minister with a clear focus on consumer pensions rights.