Minister for pensions and financial inclusion Guy Opperman looks at his first three months in office and what lies ahead for pensions.
Take automatic enrolment, which is generating a new savings culture across the country.
The latest figures show that more than 8.3m eligible employees have been automatically enrolled into a workplace pension since 2012. To put that into context, that is nearly the combined population of Scotland and Wales and, by 2018, we expect that figure to rival the combined population of Scotland, Wales and Northern Ireland.
Our white paper will outline how we can ensure the system continues to balance the needs of consumers, the schemes themselves and business for the future
We also know that 80 per cent of female and 76 per cent of male eligible employees are in a workplace pension. This is an amazing achievement.
At the same time, we have modernised the state pension system to help people understand what they can expect to receive and when. But as life expectancy continues to increase and the number of people in receipt of the state pension also rises, keeping the state pension age under review is the responsible thing to do.
People are living and working longer than ever before. In 1948, when the modern state pension was introduced, a 65-year-old could expect to spend 13.5 years in receipt of the state pension – 23 per cent of their adult life.
Today, this has increased to 22.8 years, or 33.6 per cent of adult life. That is why we plan to raise the state pension age to 68 from 2037 onwards, to ensure we have a fair and sustainable system that is reflective of modern life and protected for future generations.
Increase confidence in the sector
We will also launch our white paper on the defined benefit pensions sector this winter. Consumer confidence in these schemes has suffered a blow due to recent high-profile cases, but the vast majority of schemes are helping to provide a secure retirement for millions of people who need to have belief in their resilience.
That is why our white paper will outline how we can ensure the system continues to balance the needs of consumers, the schemes themselves and business for the future.
It is also important that people are confident in the guidance they receive when managing their personal finances. For that reason, I am very proud to be working on the financial guidance and claims bill, which will create a clear, single financial guidance body. This will provide a joined-up service where the public can get free, high quality, impartial debt advice, pensions and money guidance, whenever they need it.
We are also progressing our review of auto-enrolment, looking at how we continue to meet the needs of individual savers and employers in a fair, affordable and sustainable way. The review is also considering how the growing group of self-employed can be helped to save for their retirement.
We have received so much positive engagement from industry and consumer groups, and we intend to report to parliament before the end of 2017.
In the meantime, my role and focus is on two things: doing what is best to ensure people can build towards a financially secure future, and giving people confidence in a pensions system that is here to support everyone, no matter what their income or background. I look forward to working with our partners to making this a reality.
Guy Opperman is minister for pensions and financial inclusion
