Parliamentary Under Secretary of State at the Department for Work and Pensions Richard Harrington has branded The Pension Regulator "light-touch", a situation he suggested may be set to change.
In a speech made at a conference hosted by the Trades Union Congress, he compared TPR to fellow watchdog the Financial Conduct Authority, which he said had a lot more “intrusive powers”.
“TPR ... is still fairly new, its powers are still being tested,” he said, suggesting it may find itself with more powers in the future.
On auto-enrolment, Mr Harrington flagged the possibility of raising the contribution rate beyond 8 per cent. He said the final figure could end up being 50 per cent higher than this – in other words, 12 per cent.
He described the semi-compulsory element of auto-enrolment as a “British compromise” between full compulsion and voluntary participation. He expressed concern that as contribution rates go up to 8 per cent, more people would opt out.
On DB schemes, he said DWP was looking at ways to help the thousands of small, disparate workplace schemes to consolidate in order to invest in alternative assets.
He also said he was “open-minded” to schemes being allowed to link annual increases to consumer price index rather than the higher retail price index, saying the issue “has to be looked at”.
On the question of the Lifetime Isa, he said he was not concerned that it would compete with workplace pensions, because the latter had the major advantage of having the employer’s contribution.
This, he said, made workplace pensions “exponentially better” than the Lisa.
However, he was concerned that consumers could be confused by the “plethora” of products available.
He also said the government would “be legislating for a single guidance body” to cover other financial areas beyond pensions, such as mortgage advice.
On the much discussed triple lock guarantee for state pensions he said: “What matters is that state pensions are protected against price increases, and we’re not allowed to get into a situation … where over the years, earnings raise significantly above pensions incomes.”
Former pension minister Baroness Altmann has called for the triple lock to be scrapped.
