Pensions  

Pensions minister full of ideas but not much action

James Coney

James Coney

The problem with being pensions minister is that it must be a very frustrating job.

To begin with you not only have one master – the minister for work and pensions – but also HM Treasury, which ultimately means the chancellor.

It is the latter who holds all the power and the purse strings.

Look at two of the biggest policy reforms that pensions ministers have had to deal with in the past decade, namely the pension freedoms and the introduction of the new state pension, and they both originated in the Treasury.

The other frustration is that, by the nature of pensions, you are forever having to pick up the pieces and implement other people’s policies. Auto-enrolment was a policy introduced by Labour minister Peter Hain, though it was launched under Lib Dem Steve Webb in the coalition and has now been through the hands of at least three other ministers.

It is a miracle anything gets done given the regular turnover of pensions ministers in the past 25 years – Labour certainly never really took the position very seriously.

Last week the current incumbent Guy Opperman became our longest running pensions minister and will shortly hit the five-year mark.

While the previous record holder, Webb, had three of the most significant reforms of any generation to look after – the new state pension, auto-enrolment and the pension freedoms – Opperman has tried to make his own mark. His flagship policies are the dashboard, greener pensions, a mid-life MOT and the saving sidecar.

Meanwhile, he has had to ensure that increasing auto-enrolment contribution rates to 8 per cent has not been matched by a decrease in participation rates. 

What is interesting about Opperman’s time in office is that his ambition to get things done has been hindered by what is increasingly looking like a big problem for the civil service: its technology.

The mess around the women’s state pension underpayment is caused by the legacy systems inside the DWP, where so many of the records for those who lost out were done manually, and are now being done manually again.

Opperman’s dream of a pension app that shows all your retirement savings in one place in a safe and secure manner is proving to be hampered again by the fact that it is not just only some legacy insurers who are struggling to feed in these records, but also government departments.

Issues such as being unable to pay tax-relief to low income workers in net pay pensions is also a tech issue caused by HMRC systems. 

The same applies to child benefit, where thousands of families have been chased for overpayments due to the poor systems at HMRC.