Pensions minister Guy Opperman has hit out at the pensions industry’s apparent lack of involvement in the development of so-called “midlife MOTs”, and argued in favour of the service being offered to savers in their thirties.
Midlife MOTs are free reviews offered to workers above the age of 40 to help them manage their finances and wellbeing. Speaking to a Lang Cat podcast, the pensions minister said that the industry role in this initiative is “massive and they’re not doing enough”.
“In my view, in five, 10, 15 years’ time, this will be one of the biggest interventions that takes place in the workplace and in the evolution of your professional career,” he said.
“Changing government policy takes a lot of time, tremendous amounts of heavy lifting, consultation, pilot projects and proper evolution of policy,” he continued.
It is patently the case that even Aviva, to their discredit, sadly, are not really stepping up to the plate
Guy Opperman, pensions minister
Midlife MOTs for people in their thirties?
Opperman said that he had worked “on and off” on midlife MOTs for the past four to five years, admitting that the project at times “went to the back burner slightly”.
“However, over the past two years I’ve done two separate funding rounds and those funding rounds have produced £400,000 worth of money”, he added, which he said was spent on pilot work conducted by local enterprise partnerships in 2021.
The minister also secured £5mn from the last Budget. In July, the Department for Work and Pensions said that the expansion was part of a wider £22mn package, created to support the over-fifties in finding new careers and earn more money by bringing in specialist support.
“We split that three ways,” he said. The government is working on an “enhanced online version” with the Money and Pensions Service and the DWP’s own version, as well as observing what others are doing, he said. It is also working with job centres.
“The bit I’m most excited about,” continued, involves seeking ideas on conducting “the best interventions” from the private sector.
He cited Aviva’s model as the best current version. “I don’t necessarily know that for sure,” he added, given its in-house nature and the large profile of the provider.
The minister said that he needed “to make this work countrywide” and conduct a “big commercial pilot”, with which he could present to the Treasury with the aim of compelling everyone between the ages of 45 and 50 to have a midlife MOT.
“And frankly, make them have a midlife MOT at an earlier stage, when you are 30,” he added, citing the range of significant financial decisions individuals often make at that age.
“Large financial services providers love this. But it is patently the case that even Aviva, to their discredit, sadly, are not really stepping up to the plate and going, ‘yeah, come on, we can do this, we would take one of these contracts on and we will run one of these things and show you how to do it on a much larger level’,” he continued.
“That disappoints me, because the industry is really quick to criticise when they don’t think government is doing a good job.
“When the government says, ‘we will actually pay you taxpayers’ money to show us how to do this even better, and then roll out a product that you will then probably get the benefit of’, I am, I think the technical term is, pissed off that they don’t man up and sort it out.”
Companies would recover the costs from the Treasury
Opperman suggested that the initiative could be funded by a Treasury tax break that could be recovered against a company’s corporation tax or capital expenses.
He was asked to comment on the DWP’s procurement process that invited tenders for participation in the midlife MOT project, which launched in June. Suppliers are being sought to help deliver midlife MOTs as part of the programme’s pilot stage.
When challenged over whether Aviva had responded, the minister said that “they may have done so over the past three or four weeks”.
DWP announces £5mn mid-life MOT expansion
The Department for Work and Pensions has announced a £5mn expansion of the mid-life MOT initiative, but the project is considered to “barely touch the sides” by an industry expert.
“Very few private sector organisations stuck their hand up,” Opperman continued. The procurement process is ongoing.
An Aviva spokesperson said: “We can confirm that Aviva did respond positively to the DWP’s initial tender document, in advance of their June deadline.
“We are now awaiting the DWP’s next steps. We continue to support the government’s mid-life MOT ambitions.”
