A new savings culture?
We have a new pensions minister. All right, strictly speaking he is not a minister, and he is also no longer just in charge of pensions.
Guy Opperman’s appointment to the Department for Work and Pensions was announced on Wednesday, but it took the DWP another day to confirm that his brief is pensions and financial inclusion.
Several industry figures have welcomed the fact that financial inclusion has been made part of the brief. It seems to show a desire to tackle not just inequality in resources and access to savings products, but also acknowledges that later-life provision is, for many, about more than pensions, and could take into account things such as debt and long-term care.
The DWP issued a press release on Friday to celebrate new figures on pension saving, noting that more than 16m employees are now scheme members. It said the data highlight “Britain’s reviving savings culture”.
But the enrolment of employees on which these figures are largely based is automatic as we all know; it has little or nothing to do with shifts in attitudes towards saving on which a ‘savings culture’ arguably relies.
While it is early days, the tone of future statements made by the DWP will also depend much on David Gauke, the new work and pensions secretary.
Ian Neale, director at policy specialists Aries Insight, fears Gauke has spent too much time at the Treasury to not want to infuse the DWP with “a heavy measure of Treasury thinking about pensions”, which could relegate the DWP to “an outpost of the Treasury”.
It also remains to be seen, said Neale, to what extent Opperman will be given licence to develop pensions policy – or if he will have to do as he is told by Gauke.
The other obvious question centres around continuity. Neither Opperman nor Gauke might be in their posts for very long depending on just how stable the coalition government turns out to be.
With pensions ministers seemingly changing within months rather than years, and the time-bomb of pensions and long-term care ticking, the government is ignoring industry calls for a pensions commission at its peril.
Sandra Wolf is editor at Pensions Expert. You can follow her on Twitter @SandraCWK and the team @pensions_expert.