The UK pensions industry has set out a list of priorities for new pensions minister.
Emma Reynolds, a parliamentary secretary across both the Treasury and the Department for Work and Pensions (DWP), confirmed her position in a post on X last night, saying: “Delighted to spend my first day meeting other ministerial colleagues and officials in my new role as pensions minister in the Department for Work and Pensions.”
Prior to the announcement, Reynolds was appointed as joint parliamentary secretary across both the Treasury and DWP, igniting hope for a joint-up approach to pensions policy.
Her announcement was welcomed by Tim Middleton, Pensions Management Institute’s director of policy and external affairs, who said that Reynolds’s appointment comes at a time when there’s “much crucial work to be done”.
He said: “It is clear that our members are keen to see reforms introduced by the new government. Some proposals could be achieved over the short term, but others would involve major changes that would take years to enact.”
PMI conducted a poll across its members prior to the election asking to rank a series of proposals for the new pensions minister to address. Five proposals were ranked highly in the poll, including:
- implement changes to automatic enrolment to reduce the eligibility age to 18 and to remove the lower earnings limit for contributions;
- increase the minimum rate of auto-enrolment contributions;
- improve financial education across the workforce;
- simplify the pensions tax regime;
- create a standing Pensions Commission.
Middleton continued: “The most obvious changes called for are to the auto-enrolment regime. The 2023 Act received Royal Assent, but the regulations required for their implementation have yet to be laid before parliament. Many in the industry have been calling for an increase to the minimum statutory rate of contributions for years.”
With financial education and reforming tax regime also high on the list, Middleton acknowledged there is “much to consider here”.
“We welcome the opportunity to meet the new minister for pensions to discuss these proposals. We are sure Emma Reynolds will rise to the exciting challenge of her new position and confirm that we would be delighted to offer our support,” Middleton added.
David Lane, chief executive officer of TPT Retirement Solutions, agreed that one of the most pressing priorities for Reynolds as the new pensions minister is the expansion of auto-enrolment.
“Auto-enrolment has already been incredibly successful in helping people to grow their pension pots, but raising minimum contribution levels would lead to a substantial increase in pension savings for millions of workers. We also need to consider how those aged under 22 and those in part-time work are brought into the fold,” he said.
He added that a renewed focus on innovation in the pension consolidation space would also be welcome from the new minister. He said that reform in this area could allow pension schemes to benefit from increased scale to deliver better returns for savers.
Lane also suggested that the new government should consider legislation to allow the creation of multi-employer collective defined contribution (CDC) pension schemes. “Employers, scheme members and the wider economy could all profit from their introduction, and we hope to see their increasing adoption in the coming years.”
Morten Nilsson, CEO of Brightwell (former BT Pension Scheme Management), also welcomed the appointment of Reynolds as pensions minister and a joint role across Treasury and DWP.
“Pensions policy is often diffuse, with different departments and bodies responsible for different aspects. As a consequence, the right hand sometimes doesn’t appear to know what the left is doing. A joint minister should help to improve coordination and communication, ensuring a joined up approach,” he noted.
Nilsson added that this is particularly important in the context of Labour’s upcoming pensions review which he hopes will look at the pensions system holistically.
“We look forward to working with the new minister on the review and hope that it can promote better outcomes for pension savers as well as supporting the productive finance agenda,” he said.
In a joint letter, the Society for Pension Professional’s (SPP) president Sophia Singleton and CEO Fred Emden, said that at this early stage, rather than adding to the array of industry, consumer, political and stakeholder views, the SPP has just one key ask: “Whatever policy approaches are taken in relation to any pension issues, our key ask is that you take sufficient time over your decisions, consult thoroughly with industry and allow a sufficient period for any changes to be implemented – very much in keeping with the Labour Party’s manifesto commitment to undertake a comprehensive in-government review of pensions policy.”
They explained that this maximises the chances of policy success and impact while simultaneously minimising the risks of unintended consequences.
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