The Pension Minister has revealed his plans for 2018. Talking in the FT Advisor, Guy Opperman, the minister forand financial inclusion, laid out his plans for the coming year and how he is looking to address issues for self employed people.
Stating that he I wants to be a the champion for savings and pensions in 2018, the minister focussed on a number of key challenges in the pensions landscape that he feels need to be addresses in the coming year, to improve thesavings system.
In his view, automatic enrolment has made significant changes to transforming the savings culture, and it is true that there are now 9 million people now enrolled into a workplace pension, but he also acknowledges that there is still a shortfall of active savers, and those planning for a financially secure.
Addressing the Needs of Self Employed
Following the review of automatic enrolment, which was published in early December, the next step for the government is to to address the 4.8 million people who are currently classed as self-employed. This with begin with the launch of a series of trials in 2018, aimed at establishing how to meet the needs of the self employed in saving for a financially secure retirement.
Support to Help Individuals Manage Personal Finance
The minister reiterated his commitment to delivering financial support for individuals: “It is important that people know what support is available when managing their personal finances. I’m very proud to be working on the Financial Guidance and Claims Bill, which will create a clear, single financial guidance body, bringing together the existing services provided by Pension Wise, The Pension Advisory Service and Money Advice Service.” FTA Advisor
The Finance Guidance and Claims Bill is currently progressing through Parliament. It is expected to finish its journey early in 2018.
The minister stated that the DWP is taking forward plans to create a “pensions dashboard” He states that the purpose of this is to “Help people better understand their pensions and make informed decisions about how to fund their retirement, all through one secure online location”
There are a broad range of stakeholders involved in the project. The minister stated that he is determined to move quickly and effectively on its development. “We are currently leading a feasibility study to ensure consumer interests are properly safeguarded, and we expect to publish our findings in March.”
Defined Benefit Pension Transfers
The current situation around defined benefit pensions transfers continues to be contentious. The minister outlined plans to launch a white paper on the defined benefit pensions sector early next year. He repeats the official line, encouraging members of final salary schemes to remain in place and not transfer, despite the obvious advantages. “There have been individual difficulties, but the vast majority of schemes are continuing to help in providing a secure retirement for millions of people.”
Although this is true, we would always advise individuals to look carefully at their own situation and the many options available, to find the best individual solution for them.
Master Trust Pension Scheme
The minister also confirmed that master trust pension schemes will need to meet five key tests in order to continue operating.
“The new ‘authorisation and supervision regime’ will ensure that consumers and master trusts alike will be strengthened by requiring the latter to meet strict criteria on all aspects of operations and governance. I expect that the new regulations will come into effect from October.” FTA Advisor
The pension saving landscape has changed dramatically over 2017 and looks to do so again in 2018. We look forward to seeing what the future holds, and how the developments the minister is proposing will affect individual savers in the coming year.
We wish you all a very prosperous New Year, from everyone at the Haven team.