The only one to have stayed longer than a year is Thérèse Coffey who was in the role for around three years. In contrast, Chloe Smith had the shortest tenure of just 19 few days.
So with Mel Stride as the newest DWP secretary, how will he fare as he steers a department that is facing many challenges over the short and long term?
Described as a Treasury insider, many believe this will help to foster a more joined up working approach between the Treasury and the DWP.
Important parts of pensions policy such as pension tax relief and the regulation of personal pensions and self-invested personal pensions are governed by the Treasury rather than the DWP.
With Stride's background as a former Treasury minister and also as recent chair of the Treasury Committee, there will be aspects of the pensions landscape he will be familiar with.
“He should bring valuable understanding of the wider pensions landscape,” says Sir Steve Webb, a former pensions minster and partner at LCP.
“Because of the link between tax policy and pensions, and the fact that Treasury jealously guards its stewardship of all tax issues, it can sometimes be reluctant to be open with other departments – including the DWP – about tax measures that may be relevant to pensions policy, such as changes to lifetime allowance or annual allowance levels.
“Hopefully having a Treasury ‘insider’ at the head of the DWP will improve the chance of joined-up pensions policy.”
He should bring valuable understanding of the wider pensions landscape.Steve WebbBaroness Ros Altmann, a former pensions minister, agrees that Stride’s background and knowledge of the Treasury’s thinking around pensions will help to close the disconnect between the DWP and Treasury on pensions policy.
Altmann adds: “I think Mel Stride will be able to understand the financial aspects of pensions, but also the constraints that any secretary of state responsible for such a huge spending department will face.
“There are many areas of policy that need Treasury input, such as the problem with net pay schemes in auto-enrolment, which force the lower paid workers to pay a 25 per cent penalty for their pensions.”
Net pay schemes will not be the only pressing issue facing Stride.
There is the conundrum of how to manage a rising state pension age in a country with vast differentials in healthy life expectancy.
More long-term, Altmann says older people need help to stay economically active, while employers need to be encouraged to retain, retrain and recruit people into their 60s, which can enhance people’s lives in their later years as well as boosting the economy.
She says in the longer term it would make sense for private pensions to be taken out of the DWP and moved into the Treasury, perhaps with a different name that reflects life savings or future investing, while state pensions stay in the DWP as they are a state benefit, rather than a savings vehicle.
The son of working class parents who due to economic hardship had to leave school at 15 and 14, Stride was awarded a free place at Portsmouth Grammar School and won a place at Oxford University – initially to study chemistry but changed to politics, philosophy and economics.
Hopefully having a Treasury ‘insider’ at the head of the DWP will improve the chance of joined-up pensions policy.Steve WebbIn 1987 he set up his own business specialising in trade exhibitions, conferences and publishing. He expanded this venture into the US; working there before selling the US company.
Outside of political life, he has a strong interest in history and as a hobby is a qualified tour guide, with the credentials to give tours around venues such as The British Museum, Westminster Abbey, the Tower of London, Tate Britain, Windsor Castle and Stonehenge.
Many in the industry will hope that his appointment will reduce the instability pensioners have experienced in recent years, which has been caused by this endless carousel of DWP secretaries.
Many factors to consider
According to Baron Frank Field, former chair of the Works and Pensions Committee, a good secretary will look at how the new state pension is operating.
He adds: “Steve Webb brought in this reform to the national insurance scheme and shortened the number of contributory years. To make sense of the books in the longer run the contributory years for the second state pension need to be increased.”
In the more immediate term, Field says Stride also needs to ensure that universal credit is working well.
“Universal credit survived its greatest challenge when we had lockdown and Covid-19.
There are many areas of policy that need Treasury input, such as the problem with net pay schemes in auto-enrolment.Ros Altmann"The secretary of state also needs an able group of ministers as this department – along with the Treasury – affects the greatest number of constituents, and included in these constituents are huge numbers of people whose money is running out in the days before benefit payments,” Field adds.
Sir Stephen Timms, the current works and pensions select committee chair, says: "I welcome Mel’s appointment. He and I have worked together quite closely as select committee chairs, and I welcome that he will bring to his new role an excellent understanding of the role of my committee. The most immediate challenge is ensuring that benefits are uprated in line with inflation next April, as Rishi Sunak promised in May."
According to Steven Cameron, pensions director at Aegon, other areas Stride should be looking at, include:
- Unfreezing the lifetime allowance;
- Making sure the pensions dashboard does not lose momentum;
- Progress on pensions for the self-employed; and
- Implementing recommendations from the auto-enrolment review of 2017.
Webb says that after five years, in which little progress was made on boosting defined contribution pension savings rates, Stride and his team will need to plan the next phase of boosting pension savings now that auto-enrolment is firmly established.
He adds: “The DWP will also need to make progress on areas such as the pensions dashboard, where the go-live to the public is probably still a couple of years away, and needs to do more thinking on how to support savers in a pension freedoms world where individuals may end up having to manage a DC pot with little advice or guidance of a period of 20-30 years.”
A review of the money purchase annual allowance is also needed, Cameron says.
There is a growing concern around the rate at which people over the age of 55 have been accessing their pensions in the wake of Covid-19 and amid the cost of living crisis.
The secretary of state also needs an able group of ministers.Frank FieldIf those individuals want to return to work, they will find they can no longer contribute substantially to their pensions again.
Introduced in 2015 as part of the pension freedoms, the MPAA restricts the amount of tax relief you can collect on contributions you make once you start drawing benefits from your pension.
Once the MPAA is triggered, the amount that can be paid into the pensions pot is reduced, dropping from £40,000 to just £4,000 per year.
When it was first introduced, the money purchase pension contribution limit was £10,000, but it was later reduced.
Triple lock
As the date of the Autumn Statement reveal approaches, many minds will also be on the future of the pensions triple lock.
In September 2021 the government suspended the triple lock for one year, instead increasing state pensions in line with September's CPI inflation figure of 3.1 per cent – owing to concerns that earnings inflation driven up by furlough would have pushed pensions up by 8 per cent.
Around the same time, while chair of the Treasury Committee, Stride expressed concern that “a potential almost double-digit percentage rise was unrealistic and unfair, with knock-on effects for the public finances”.
Under the pension triple lock rules, the state pension must rise each year in line with the highest of three possible figures: inflation, average earnings or 2.5 per cent.
It is unclear whether the government is going to keep to its manifesto pledge of keeping pensions up with the triple lock when it unveils its plans on November 17.
But for however long the Conservatives remain in power, many will hope Stride can remain in his role long enough to work with the Treasury, to push through some much-needed beneficial reforms.
Ima Jackson-Obot is deputy features editor of FTAdviser
