The Pensions Minister Guy Opperman has put “pressure” on the financial services industry to do more to ensure the financial wellbeing of their employees.
Speaking at the launch of Nest Insight’s sidecar trial yesterday, 12 November, Opperman said that he cannot fulfil his role as financial inclusion minister without organisations getting on board with initiatives such as the sidecar trial and mid-life MOTs.
Opperman’s latest call comes as he increasingly looks to industry to take the initiative on important changes to the pensions system. Last month, he told the industry to ‘get on with it’ over the pensions dashboard and also asked defined contribution pension schemes to up their infrastructure investments.
“I also wanted to slightly pressure all of you, I can’t be the financial inclusion minister, speaking to a number of different organisations many of whom work in financial services, without pointing out the desire to ensure that all your staff are included in the financial system," he said.
“You might consider doing the mid-life MOT, but you definitely will be ensuring that they are signed up to something like this and frankly asking yourself ‘why aren’t we doing one of these Nest sidecar pilots?’
“If you’re not doing it, please tell me who is doing this, because if the institutions that you are running are not motivated by a desire to get involved with this, I slightly question why you are here and I know you are all here for the right reasons.”
Yesterday, Nest launched its sidecar saving trial, looking to create an “optimal level of savings” for 5,600 Timpson employees over the next two years, at which point the impact on their financial wellbeing will be assessed.
Opperman added that in a years’ time he hoped many other organisations will have taken on such initiatives.
Under the sidecar model, contributions paid into the combined account structure would be distributed between a emergency savings account and a pension pot. Once the emergency account reaches the ‘savings cap’, all contributions will then start ‘rolling’ into the pension pot.
The saver can then withdraw funds from the emergency account, meaning future contributions would again be split until the savings cap was reached.