It’s time to push pensions forward

With a new year, a new government and a freshly reintroduced Pension Schemes Bill, this feels like the perfect time to look ahead to the challenges and opportunities 2020 will bring.

It’s undoubtedly a pivotal year for improvements to how people save for retirement. The proposals unveiled in the Pension Schemes Bill set out the government’s vision for making Britain the best place in the world in which to grow old, and will look to introduce important new laws and innovations.

First, I’m committed to ensuring there’s no hiding place for reckless bosses who put their workers’ retirement savings at risk. I want company chiefs who plunder workers’ pensions to feel the full force of the law. Under the proposals in the Pension Schemes Bill, they could face up to seven years in prison.

Paving the way for pensions dashboards is also high on my agenda. I’m keen to bring pensions into the digital age and give people plain information about all of their pensions in one place for the first time.

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Pensions dashboards will allow savers to see all their pension pots, including what they can expect from their state pension, in one place – online – enabling them to find lost pensions quickly and easily, and forcing pension providers to supply information on dashboards on request. The Pension Schemes Bill will bring this a step closer.

Work will continue on an entirely new type of pension that will give savers greater choice. Collective defined contribution schemes could provide millions of workers with better retirement returns and have the potential to benefit workers and bosses, making it easier for employees to boost their retirement income by pooling their assets, while also cutting red tape for employers.

The Royal Mail and the Communications Workers Union have worked hard together to introduce the first such CDC scheme in Britain, and the Pension Schemes Bill sets out how we can build on this to create a new middle ground and ‘third way’ in the pensions industry, as final and average salary pensions become rarer and the numbers saving through defined contribution schemes grow.

The Pension Schemes Bill essentially aims to help savers by making protection for their pensions stronger. Safer savings would be guaranteed by regulation of defined benefit pension scheme mergers and greater powers for The Pensions Regulator to ensure that trustees who are reckless with pension savings are properly punished.

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I want to build on the success of auto-enrolment too. That has brought more than 10 million people to workplace pensions since 2012, but more can be done to bring millions of self-employed workers into the retirement savings revolution too. That’s why I’ll be working with partners – including banks and pension providers – to make that happen.

We’ll also be publishing our response to a number of government consultations launched in 2019, most notably ‘Simpler annual benefit statements for workplace pensions’ and ‘Defined contribution pensions: investments and consolidation’.

Helping combat climate change

Finally, I believe pensions can play an increasing part in the fight against climate change. I’m passionate about harnessing the huge assets of pension schemes and encouraging more environmental-conscious investment. Last year’s regulations to ensure better transparency, and social and governance practices, have been a game-changer for the industry’s culture and the way it does business. I aim to build on that.

I want to make 2020 a year of transformation. The Pension Schemes Bill will do just that, introducing new legislation to bring about revolutionary reforms that are good for pension savers, good for pensions businesses, and good for our environment and communities.

Guy Opperman is MP and Minister for Pensions and Financial Inclusion