Providers must stop dragging their feet: the money belongs to savers, not to them
My mission in government has been to ensure that, first, it always pays to work and then, that it always pay to save.
After all, it is worth reminding ourselves that back in 2010 not only did we inherit a situation where one in five households had no one in work
– something that we have now turned around with a record employment
rate in this country – but also where only one in three workers in the
private sector was building up any pension of their own.
I’m proud to say that Britain now has the highest proportion of workplace pension saving since records began, with pension membership rising across all age groups. Today, more than five million people have been automatically enrolled into a workplace pension, and we will keep that process going until we have reached every employer in the country.
People are free to opt out, but around 90 per cent of those enrolled
are choosing not to, and we are working with the very smallest employers
to ensure that this scheme works for them as well.
We have also taken important steps to cap charges to ensure that the schemes offer value for money.
Next year, we will start rolling out the new State Pension, which will be set at a level above the basic “means test” so that it makes sense for people to save.
Perhaps the most ground-breaking of all our pensions reforms were those announced by the Chancellor last year, when the Government decided to lift a set of age-old rules and returned to people the freedom to decide how to use their pension savings.
We are trusting people with their own money, and rewarding the right choices, so that people can retire with dignity.
Under Labour, too many people were forced into annuities that were just not suitable. We as Conservatives believe that if you’ve worked hard and saved during your life, how you use your money should not be dictated by government or by the industry.
The decision to break these chains has been almost universally praised – as has the guidance from Pension Wise that we put in place to set out clearly people’s options.
Now, two months into the reforms, we are watching the market closely. I know the pensions industry is working on the design of new and innovative drawdown products and many providers have stepped up to the plate and are already offering their customers flexibility.
But I am concerned when I hear that some firms still appear to be dragging their feet.
I have a message for those firms: it is your responsibility to sort this out, and look after your customers. After all, you are holding their money – not your own. I know that some companies have seen practical difficulties, with old IT systems meaning that staff have to process requests clerically. That is why allowing firms some flexibility over how they bring in the changes was necessary.
But I now expect them to be playing a full role in enabling people to enjoy the new freedoms.
If they cannot enjoy them, or if they feel they are facing excessive charges, we have ensured that they can transfer their savings to another provider and there is guidance available from Pension Wise to help people understand their options.
None the less, I am very carefully monitoring the situation, as is our brilliant Pensions Minister, Ros Altmann, who has an implacable track record of standing up for consumers’ rights in the pensions market – something she is determined to continue in government.
Ros Altmann: pensions minister at the Department for Work and Pensions (Reuters)
Over the coming weeks she and the Economic Secretary, Harriett Baldwin, will be talking to the relevant regulators and the industry to see how we can best ensure that people have the flexibility they deserve.
We will not hesitate to take action to ensure that consumers get a good deal, and if we have to we are prepared to name and shame those companies who are putting barriers in the way of people getting access to their money. All of our reforms have been designed to help people make the right choices that work for them as they move towards retirement.
This One Nation Government is unashamedly on the side of working people – on the side of those who do the right thing, and save for their future. We want them to be able to make the most of both their working lives and the years they spend in retirement.
I’ve always believed that these things are the key components of a society governed by social justice. That is why it should not matter which pension provider you have saved with.
It is your pension, and it should be in your hands. I am determined that those who have saved should not remain handcuffed.
Culled from The Telegraph
Perhaps the most ground-breaking of all our pensions reforms were those announced by the Chancellor last year, when the Government decided to lift a set of age-old rules and returned to people the freedom to decide how to use their pension savings.
Under Labour, too many people were forced into annuities that were just not suitable. We as Conservatives believe that if you’ve worked hard and saved during your life, how you use your money should not be dictated by government or by the industry.
The decision to break these chains has been almost universally praised – as has the guidance from Pension Wise that we put in place to set out clearly people’s options.
Now, two months into the reforms, we are watching the market closely. I know the pensions industry is working on the design of new and innovative drawdown products and many providers have stepped up to the plate and are already offering their customers flexibility.
But I am concerned when I hear that some firms still appear to be dragging their feet.
I have a message for those firms: it is your responsibility to sort this out, and look after your customers. After all, you are holding their money – not your own. I know that some companies have seen practical difficulties, with old IT systems meaning that staff have to process requests clerically. That is why allowing firms some flexibility over how they bring in the changes was necessary.
But I now expect them to be playing a full role in enabling people to enjoy the new freedoms.
If they cannot enjoy them, or if they feel they are facing excessive charges, we have ensured that they can transfer their savings to another provider and there is guidance available from Pension Wise to help people understand their options.
None the less, I am very carefully monitoring the situation, as is our brilliant Pensions Minister, Ros Altmann, who has an implacable track record of standing up for consumers’ rights in the pensions market – something she is determined to continue in government.
Ros Altmann: pensions minister at the Department for Work and Pensions (Reuters) Over the coming weeks she and the Economic Secretary, Harriett Baldwin, will be talking to the relevant regulators and the industry to see how we can best ensure that people have the flexibility they deserve.
We will not hesitate to take action to ensure that consumers get a good deal, and if we have to we are prepared to name and shame those companies who are putting barriers in the way of people getting access to their money. All of our reforms have been designed to help people make the right choices that work for them as they move towards retirement.
This One Nation Government is unashamedly on the side of working people – on the side of those who do the right thing, and save for their future. We want them to be able to make the most of both their working lives and the years they spend in retirement.
I’ve always believed that these things are the key components of a society governed by social justice. That is why it should not matter which pension provider you have saved with.
It is your pension, and it should be in your hands. I am determined that those who have saved should not remain handcuffed.
Culled from The Telegraph
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