The Department for Work and Pensions’ confirmation that Guy Opperman will take the newly created role of Under Secretary of State for Pensions and Financial Inclusion has sparked fears it could signal a further sidelining of pensions.
Pensions Management Institute president Kevin LeGrand has warned that recent Treasury policies have pushed a broader savings agenda, with products such as the Lifetime Isa, which potentially marginalise pensions. He has called on Opperman to protect the ‘at-risk’ pension species.
But group risk providers have welcomed the broadening of the ministers brief, arguing that financial capability is an increasingly serious problem for UK workers, impacting health and productivity as well as quality of life.
LeGrand says: “It’s certainly right to recognise that people need to become more involved in managing their own financial affairs. Pensions are only one part of the equation. If this is what Mr Opperman’s title is implying then that is to be welcomed.
“However, one word of warning. Pensions satisfy a unique requirement. In considering where they fit into the wider financial picture, that uniqueness must not be overlooked or traded away in favour of a simplified generic savings approach. Recent Treasury-driven policies have moved significantly in that direction and it is important to ensure that pensions are ringfenced from any further such movement in the future.
“So whilst we welcome Mr Opperman’s appointment we look forward to an early opportunity to reiterate the case for the protection of the at-risk pensions species. We also hope that notwithstanding the disappointing decision to continue without a pensions champion with Minister status at the DWP, he will be able to give pensions the attention in government that they require.”
Unum head of public affairs and CSR John Letizia says: “I am very pleased that the government has recognised the need for strong, accountable leadership in government to promote financial inclusion.
“50 per cent more working people report money worries than in 2006 and 9 out of 10 employers think this affects employee performance. As the first Minister for Pensions and Financial Inclusion, Mr Opperman can at last deliver a coordinated plan to build the financial capability of working people. That plan must help families protect themselves from the risk of becoming too ill to work and other income shocks.”
Lincoln Pensions CEO Darren Redmayne says: “After the focus during the election on the future of the State Pension and pensioner benefits, the new minister will certainly have his hands full. However, it’s important that the new government maintains its focus on improving the security of benefits for members of defined benefit schemes through the sponsor covenant that stands behind them. There appears to be rare political consensus that members need better protection to address issues faced in cases like BHS, British Steel, and now Hoover.”