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AE reform and state pension fix top of agenda for new pension minister

by uma

 

  • Guy Opperman became minister for pensions and financial inclusion in June 2017 and took Steve Webb’s title as longest serving pension minister earlier this month.
  • He has resigned after more than five years in post.
  • Opperman has been a significant supporter of the pension dashboard and has moved forward Collective Defined Contribution.
  • He has been criticised for a lack of progress on auto-enrolment, most notably not taking forward the proposals for the 2017 Auto-enrolment review.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“The DWP has been noted for something of a revolving door policy as ministers came and went with alarming regularity -Opperman’s five-year stint brought much needed stability to the brief. However, while important progress has been made in areas such as the pension dashboard, the DWP has also been under increasing pressure with widespread issues of people not receiving their state pension on time or being underpaid. Some underpayments run into many thousands of pounds and stretch over several years – they have caused huge financial hardship to people. Whoever succeeds Opperman will be under pressure to fix these issues fast.

Auto-enrolment issues will also be near the top of any new pension minister’s in-tray. Over the last decade we’ve seen 10m people enrolled into a pension, but the next steps need to be put in place. Opperman recently said a bill is ready to implement the findings of the 2017 Auto-enrolment review which will bring in people from the age of 18 and have them saving from the first pound of income. However, the timing of this also needs to be balanced against sky high inflation putting pressure on people’s pockets today.

The latest HL Savings and Resilience Barometer produced with Oxford Economics shows our pension savings are already falling behind where we need to be for a comfortable retirement. Added to this the Barometer also showed any lockdown gains in savings are being quickly eroded and lower income homes are being hit the most by the cost-of-living crisis. Any new minister needs to look at these short-term issues while ensuring long-term savings are properly incentivised.”

 

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