What 2015 will be remembered for

Morten Nilsson

For the pensions industry, 2015 has been yet another tumultuous year. With so much change, it’s hard to pinpoint the biggest moments but for me, I’ll remember it for three things: the introduction of freedom and choice, the controversial tax relief consultation and ‘Workie’.

Freedom and Choice

While people across the country were enjoying their Easter holidays, the government ushered in the biggest change in pensions since 1921 with Chancellor George Osborne handing trust back to savers.

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Osborne’s massive liberalisation of the pensions rules proved to be a huge test for the industry and the advisory community alike. While it solved some problems, it inevitably created others.

Data published by the Association of British Insurers revealed £4.7bn has been withdrawn under the new pension freedoms since April with most people taking a common sense approach. But concerns remain over savers’ ability to adequately budget for potentially two or three decades of retirement.

Pension Wise exists to help savers make the right choice but employers, pension providers and trustees all need to work together to ensure that employees fully understand the choices available to them – and the risks of getting things wrong.

Tax consultation

While many felt the industry had enough on its plate, post-election the Chancellor announced a consultation to seek views on how to strengthen the incentive for people to save. Just like freedom and choice, the planned proposals were revolutionary – moving the UK pension tax system to one similar to an Isa.

The consultation has divided industry opinion and has been a topic of fierce and ongoing debate.

My view is that we need to be careful that whatever system of tax relief we end up with does not in any way lessen the incentive to save through auto-enrolment.

If savers lose confidence in pensions as a long-term savings vehicle, the hard fought benefits of auto-enrolment could ebb away.

The outcome from the consultation will not be known until next year, but I have a strong feeling that more monumental change is on the cards.


Auto-enrolment has so far been a huge success but only 3 per cent of employers have had to comply with the legislation.

With 1.8 million firms yet to stage, there is a clear need for a major awareness raising campaign. While the Department for Work and Pensions’ ‘Workie’ might not have been what the industry imagined, there’s no doubt that it made an impact with everyone offering an opinion – both good and bad.

The DWP’s spend on the campaign has raised eye brows in some quarters but if it helps to increase awareness and keep auto enrolment on track then it’s done its job and that’s good news for everyone.

Morten Nilsson is chief executive of Now: Pensions