Pensions and savings issues are split between two differing government departments with somewhat opposing agendas, Lord Hutton has said.
Speaking at the Pensions and Lifetime Savings Association Local Authority Conference, Independent Public Service Pensions Commission former chair, Lord Hutton, explained how HM Treasury is largely focused on issues around tax and "tweaking around with freedom and choice and the Lifetime ISA", largely focusing on short-term change and solutions. On the other hand, he noted that the Department for Work and Pensions places a greater focus on "the long term, preserving and growing a retirement income".
Essentially, Hutton commented, the government is "developing the pensions environment from two different perspectives".
To resolve this, Hutton suggested an all-inclusive "minister for savings" and said he "would like the new Prime Minister to look at where this [two pension departments] is going as its fundamental to the future economy".
Furthermore, looking to the next government, Hutton stated that it needs to "help Britain really become a nation of savers" as currently 50 per cent of UK households have no savings and the average value of pension pots stand at £30,000. These are two key figures that "haunt" him, Hutton said.
Complementing the auto-enrolment policy, Hutton stated: "It is an inspired policy as it works with the grain of human nature... it makes it easy as pie for people to save and I think it's going to work."
Nonetheless, he continued to emphasise the under-saving issue, that "even with increasing contributions, it's probably only half of what people need to save".
Hutton noted that of the parties running in the general election, "no one is speaking about the fundamental issue with pensions - that we're not saving enough".
"It is clear that from following the general election, that it is not going to be won or lost on the issue of pension savings but this doesn't mean pensions aren't a main issue to consider due to the uncertain economy that we face."
Moreover, shining a spotlight on the Local Government Pension Scheme, Hutton said: "It is impossible to exaggerate the importance of the LGPS... the LGPS stands front and centre of pensions infrastructure in the UK."
However, Hutton noted that there are three key areas regarding LGPS that needs to be addressed, these being: getting the right LGPS classification for MiFID II, improving the overall governance and transparency agenda and addressing the current opacity for scheme trustees.
If these are addressed, there is the "opportunity for LGPS to be a world leader in this area", Hutton concluded.
