Ros Altmann has been confirmed as the new pensions minister, having been told by prime minister David Cameron that she would be given a peerage and made minister for financial consumer protection and financial education.
Dr Altmann was appointed after Steve Webb lost his Thornbury and Yate seat by just shy of 1,500 votes, which had the pensions industry raising concerns over the lack of pensions expertise in parliament, especially after April’s retirement freedoms.
Before Mr Webb’s reign the role of pensions minister was never one of stability. It has been held by 16 different ministers since Tony Blair’s Labour government took over in May 1997 – Steve Webb’s five year tenure was the longest followed by Jeff Rooker’s 23-month spell.
Michael Johnson, research fellow at The Centre for Policy Studies – an independent think tank – released his suggestions for the new pensions minister. Among the 11 points in the document, he claims Dr Altmann should include Isas in auto-enrolment legislation, encourage Nest (and its competitors) to develop a collective drawdown capability to enable retirees to pool their longevity risk and to simplify the regulatory framework in pensions.
One of the first points Mr Johnson suggests is to “rapidly” increase today’s private pension age of 55 to 60 in 2024. It is currently scheduled to rise to 57 in 2028. The reasoning behind this, he said, is to focus minds on longer working lives, corresponding with the rise in life expectancy.
Claire Trott, head of technical at Talbot and Muir, says, “I fundamentally disagree with this. Increasing the private pension age will not build trust between the industry and consumers which is such a major barrier to long-term saving within a pension.”
She said increasing the age at which benefits can be taken could undermine the work done so far to give access and freedom to consumers, which she said shows the government’s distrust in the ability of people to make the right decisions.
charlotte.richards@ft.com
