A man with a mission
Next week Steve Webb, the pensions minister, will speak at a conference on defined contribution held by the National Association of Pension Funds.
I think it is fair to say Mr Webb has been one of the highlights of this government as far as those of us working in the personal finance world are concerned.
Firstly, he has clocked up the remarkable achievement of staying in his post for two years. During the 13-year Labour regime those working in the industry never had the opportunity to build a relationship with a pensions minister, such was the rapidity of the musical chairs inflicted on the post.
The lack of consistency gave the distinct impression that while pension reform was something the government felt it had to tackle it was unwilling to commit a single person to see it through.
In Mr Webb we have someone who was not only steeped in pensions before taking office, but has done his level best to enact the reforms he believes are needed. You might not like or agree with everything he has done but you cannot dispute his commitment to the cause.
In two years he has set a triple lock on the state pension guaranteeing minimum increases for the elderly. I do not approve of using the consumer prices index rather than the retail prices index as one of the locking mechanisms, but it is still the best guarantee pensioners have had of protecting the value of their pensions.
We have also seen increasing life expectancy tackled and realistic moves towards a single, simplified state pension.
Such a pension would remove the means-testing that the last government was so attached to – but which some pensioners find degrading or incomprehensible resulting in much pension credit going unclaimed.
The NAPF conference will look at workplace pensions and auto-enrolment – still a controversial issue. While plans for Nest rumble on, workplace pensions demand attention.
Many large companies used to have an unspoken contract with their employees. You work for us through your life and we will take care of you in your retirement.
In our multi-national world companies are seeking to shake off their part of this bargain. Now it’s you work till you drop, then we’ll dump you at minimum cost.
Mr Webb has said he wants to see firms prepared to offer guarantees on workers’ pensions to provide a middle ground between final salary and defined contribution.
Grumble you might but Mr Webb is a man with a mission. He has achieved more in two years than the menagerie of predecessors achieved between them in 13.
Steve Webb has achieved more in two years than the menagerie of predecessors achieved between them in 13.
It is a pity he will almost certainly be out of office in May 2015. Perhaps he should consider jumping ship to a party more likely to be elected.
The NIC of time
Something I am watching with increasing concern is an apparent momentum towards merging national insurance contributions with income tax.