PensionsOct 15 2015

Altmann vetoes pension change as industry has ‘too much on’

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Altmann vetoes pension change as industry has ‘too much on’

The government is not going to implement defined ambition schemes as the time is not right.

This morning (15 October), Shailesh Vara, parliamentary under secretary of state at the Department for Work and Pensions,highlighted a written statement from Baroness Altmann, the minister of state for the DWP, in which she said there was too much going on for the government to commit to other changes.

She said: “The time is not right to implement Defined Ambition, Collective Benefits and Automatic Transfers.

“The time is not right to ask the pensions industry to absorb the new swathe of regulation that would be needed to make such further reforms work effectively. The market needs time and space to adjust to the other reforms underway and these areas will be revisited once there has been an opportunity for that to happen.”

The new state pension comes into payment from 6 April 2016, which she said would bring “much-needed clarity” to a system that few people truly understood, and will reduce the need for pensioner means-testing.

This is despite revelations that many people - particularly women - will not be eligible for the full £155 a week from the outset.

Baroness Altmann also commented on the 5.4m employees who have been enrolled into a workplace pension by approximately 60,000 employers, saying this had “increased the number of people saving for later life”.

This figure represents 3 per cent of employers as the smaller employers are only just approaching their staging dates.

She added: “The government’s priorities are to carry through those important reforms to ensure they are a success. This means new State Pension being delivered as smoothly as possible and small and micro employers getting the help and support they need as they meet their automatic enrolment duties.”

Government and the pensions industry are also currently working through the changes following from the new pension flexibilities which allow scheme members to have more freedom and choice about how and when they withdraw their pension savings.

Ms Altmann’s comments come after earlier this week the Department for Work and Pensions launched a new state pension top-up service.

Launched on Monday (12 October), the scheme allows men aged 65 or older and women aged 63 or older to increase their state pension by up to £25 a week.

It will remain open for 18 months, and those who think they can benefit will be able to buy additional state pension.