Open letters sent to DWP and Treasury calling for independent pensions commission

Written by Laura Blows
02/06/2015

Pensions industry leaders have called for the formation of an independent retirement savings advisory body in open letters to Pensions Minister Ros Altmann and Financial Secretary to the Treasury David Gauke.

The letters state that the advisory body’s fundamental roles should be to improve individuals’ financial well-being in later life, to promote stability for long-term savers and to balance inter-generational affordability of retirement provision.

According to the letters, an independent retirement savings advisory body would help provide retirement savers with reassurance that the system they are saving into will not change beyond recognition by the time they reach retirement. It will help individuals more effectively plan for their later life. It will enable retirement savers to trust that politicians are putting their needs at the forefront of pensions policy.

These important aims would be achieved by the body taking a holistic approach to reviewing the retirement landscape.

The letters state a key aspect of the body’s formation is that it would be advisory. The Government would be under no obligation to take its advice, and nor should it, the letters explained, as MPs are democratically elected to make these decisions on behalf of the electorate.

However, it added that the body can help the Government validate any difficult decisions relating to retirement or long-term saving. It would provide the Government with clear research, looking at the long-term impact of policies for current and future generations of retirees, as well as predicting changes to retirement and retirement saving patterns.

According to the letter, this stability would also help the industry create products that will stand the test of time and be truly tailored to retirement savers’ needs.

Signatories include key industry figures such as BESTrustees chairman Alan Pickering, NAPF head of policy and research Jackie Wells and ACA chairman David Fairs, along with former Office for National Statistics National Statistician and Chief Executive Dame Karen Dunnell.

These letters form part of Pensions Age’s Unchaining Pensions from Politics (UPP) campaign, which aims to highlight the need for an independent body outside of Government to consider the long-term implications of pension reform.

Read the letter to the Pensions Minister in full below:

Dear Baroness Altmann,

Congratulations on your appointment as Pensions Minister. We look forward to the excellent work you will achieve in this role, bringing together your in-depth understanding of pensions with your experience as a vocal campaigner for the rights of savers.

It is due to this dedication to savers that we are writing to call for the creation of an independent retirement savings advisory body.

In these times of rapid reforms, coupled with an ageing population, it is important to take a step back and assess the path we are on, and the subsequent impact on long-term saving in this environment. An independent retirement savings advisory body would able to do this, and help solve the current problems of short-term decision-making and consumer mistrust in financial institutions.

The advisory body’s fundamental roles should be to improve individuals’ financial well-being in later life, to promote stability for long-term savers and to balance inter-generational affordability of retirement provision.

These important aims would be achieved by the body taking a holistic approach to reviewing the retirement landscape.

This would include examining different methods of long-term saving, including pensions, property and other investments. Incentives to save, such as taxation and National Insurance Contributions, and their cost effectiveness, would also be explored, along with the promotion of financial education. Later-life trends would be researched, the impact of policies assessed and recommendations made to Government.

A key aspect of the body’s formation is that it would be advisory. The Government would be under no obligation to take its advice, and nor should it, as they are democratically elected to make these decisions on behalf of the electorate.

However, the body can help the Government validate any difficult decisions relating to retirement or long-term saving. It would provide the Government with clear research, looking at the long-term impact of policies for current and future generations of retirees, as well as predicting changes to retirement and retirement saving patterns.

This stability would also help the industry create products that will stand the test of time and be truly tailored to retirement savers’ needs.

This advisory body may be beneficial to both Government and industry, but its focus, and biggest beneficiary, would always be the long-term saver.

It will help provide retirement savers with reassurance that the system they are saving into will not change beyond recognition by the time they reach retirement. It will help individuals more effectively plan for their later life. It will enable retirement savers to trust that politicians are putting their needs at the forefront of pensions policy.

Funding an ever-increasing (as longevity statistics continually show) later life can be a daunting prospect for individuals, particularly if the ‘system’ for doing so continues to change and does not appear to be subject to a guided, ‘joined up’ approach to policy making.

This is a problem you have already highlighted. You stated when you were appointed Pensions Minister that “as our population ages, it is more important than ever to help, encourage and empower people to plan and prepare for their later years”.

An independent retirement advisory body will work to the same aims you have: to strengthen British pensions, improve later life outcomes and protect the pensioners of today and tomorrow. We urge you to form an independent retirement advisory body to help achieve your goals.

Yours Sincerely,

Mike Allen, Director of Pensions, LPFA

Laura Blows, Editor, Pensions Age

Emma Douglas, Head of DC Distribution, LGIM

Dame Karen Dunnell, Chair, Longevity Science Panel (Legal & General)

David Fairs, Chairman, ACA

Ammo Kambo, Charted Financial Planner

Kevin LeGrand, Head of Pensions Policy, Buck Consultants at Xerox

Ronnie Morgan, Strategic Market Insight Manager, Royal London

Darren Philp

Alan Pickering, Chairman, BESTrustees

Carolyn Saunders, Head of Pensions, Pinsent Masons

Rachel Vahey, Independent Consultant

Jackie Wells, Head of Policy and Research, NAPF


If you would like to comment on this letter, please email upp@pensionsage.com

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