Department for Work & Pensions  

Opperman says people in their 20s should receive pension nudges

Opperman says people in their 20s should receive pension nudges
Pensions minister Guy Opperman appearing at the Work and Pensions Committee today (July 6)

Pensions minister Guy Opperman has said in an ideal world pension nudges would start as early as in people’s 20s, arguing that making people pension aware is the “ultimate key” to increasing savings.

Talking to MPs at a Work and Pensions Committee meeting today (July 6), Opperman said “interventions should start way earlier” in order for the pensions industry to better engage people with their finances.

“I believe an earlier nudge is effective. I would like interventions at an earlier stage. In an ideal world, I would like interventions in people’s 20s,” he said.

The minister said he is trying to develop some “private, sector-led positive interventions of really different ways of looking at early interventions”, though he admitted he is “really struggling” to do this.

“I want people to be able to look at their work, wealth and wellbeing before the age of 50.”

In the past, the Department for Work and Pensions has focused on interactions with people between the ages of 50 and 65 under successive governments, according to Opperman.

The minister said he has “doggedly” pursued the suggestion in the 2017 Cridland report for mid-life MOTs designed to try and help people over 50 better understand their financial positions.

Opperman’s department has done a number of basic pilots of mid-life MOTs, coupled with private pilots by providers such as Aviva and Legal & General, which found employees did not have the pension they thought they had.

Late last year, Opperman also secured £5mn to do what he called “way bigger interventions and pilots” in this space.

DWP is currently working on an improved online version of the mid-life MOT alongside the Money and Pensions Service which the pensions minister said would be ready “in the next year or so”.

For men, Opperman said a mid-life MOT is “apparently” best done at the age of 47, for women “slightly later”.

“But my attempt is to do that at an earlier stage. This is the intervention that I think is the right way forward. There’s a commissioning process that’s ongoing.

“We have a significant amount of money to get the private sector to drive forward positive interventions.

“If I do nothing else, I want to do an earlier intervention below the age of 50.”

The minister intends to do “extensive piloting” with the money his department has to spark earlier interventions from the age of 45 nationwide.

But Opperman added: “As far as I’m concerned, that isn’t the end of the matter. Interventions like an MOT should actually begin way earlier.