Pensions minister Ros Altmann has said that she is “considering the whole range of issues” that were started by former pensions minister Steve Webb, including pot-follows-member, pensions dashboards, combined pension statements and defined ambition.
In an interview with FTAdviser, Baroness Altmann described Mr Webb’s reforms as “significant”, adding that “I am deciding how best to steer pensions policy changes forward over the coming period”.
She explained that there have been some important and necessary changes to the pension system started up over the last five years, but that these are only just the beginning.
“I certainly believe that auto-enrolment, pension flexibilities and a new state pension system are vital for improving the UK pensions landscape and helping people improve their later life financial prospects in a sustainable and affordable way.
“I have a huge job on my hands to steer these reforms through the coming period.”
Ms Altmann said that in the first three months, the new pension freedoms had started strongly, with over 85,000 people taking advantage, but added that she was hearing “too many stories of people facing barriers to taking their money out” or facing very high charges.
“Tackling this is now a priority. It is essential that pension savers get a fair deal and, working alongside The Pensions Regulator, the Financial Conduct Authority and the Treasury, we will ensure that happens.”
The aim of the consultation is to ensure that savers are not penalised if they wish to transfer their pension scheme to access the pension freedoms. The government warned that if there is “clear evidence” of “excessive” early exit fees and charges and a “sound rationale” for policy action, it will step in.
Ms Altmann said: “We have made it clear that we stand ready to intervene, but we need to be sure we have a full picture of the problems facing customers before we act.
“I would urge financial advisers, consumer groups, the public and the media to respond to public consultation on this issue, with any examples of poor or unfair practice and hopefully with helpful suggestions of how to protect customers better.”
With regard to auto-enrolment, she said that so far only 4 per cent of employers have actually gone through the process, pointing out that these were the largest firms, which were generally best-equipped to deal with the complexity involved.
“Now we need the other 96 per cent of employers to follow as automatic enrolment turns to small and micro businesses.”
She said that only 50,000 firms have been included so far, with well over one and a half million still to start. “I am working to simplify the language and processes and to see if I can improve the communications to help the smallest employers deal with the complexities of the system.”
Ms Altmann added that the new state pension system will start in April next year, but that there is still a lot of work to be done in communicating it better, so that future pensions can prepare and understand the changes.