The government's decision of dropping the 'pot follows member' system, which was reaffirmed this week by the pensions minister, has been branded ‘incompetent’ by the Liberal Democrat spokesman for Work & Pensions.
Stephen Lloyd, MP for Eastbourne, said this system – launched by former pensions minister Sir Steve Webb in 2015 to allow a saver's auto-enrolment pension to follow them from job to job – "reflects the reality of modern work".
He said: "People move job more frequently and it makes sense for the pension pot to follow.
"Sadly when the Liberal Democrats left the government in 2015, this sensible and practical idea which would have made such a difference to so many people was scotched by the Tories.
“Truly I do not understand why, as a political party, they have a reputation for economic competence because scrapping pot follows member is incompetent. The more I see this government in action up close, the more I see how rudderless they are as they fail working people once again."
In October 2015, Baroness Ros Altmann, Sir Steve's successor as pensions minister, halted the process of introducing the system to allow auto-enrolment to be completed.
The government has no plans to revive the plan, Guy Opperman, minister for pensions and financial inclusion, revealed on Monday (16 April).
In a written answer to Parliament, Mr Opperman said now isn't "the right time to implement automatic transfers".
He said: "The government's priority for private pension savers in 2018 remains the successful roll-out of automatic enrolment. Industry shares this priority.
"With 94 per cent of eligible jobholders automatically enrolled in an occupational defined contribution [DC] scheme enrolled in a master trust, scheme managers and trustees are focused on preparing for compliance with the authorisation and supervision regime introduced by the Pension Schemes Act 2017.
"These reforms increase the number of people saving into workplace pensions and ensure confidence in the system.
"Government, providers, employers and members should focus on these changes."
There are now more than nine million people auto-enrolled in a workplace pension scheme, according to figures from The Pensions Regulator.
maria.espadinha@ft.com
