Hats off to Steve Webb for our new pensions system!

steve webbIt’s good to see the publication of the DWP’s white paper Security in Retirement – towards a new pension system. It announces an initiative first promoted by Frank Field in the late 1990s but thought then “unthinkable”;.

While I agree with the Shadow Pension Minister Gregg McClymont that “this government has consistently acted with secrecy and incompetence” , the focus of Steve Webb on seeing through this important reform deserves full and unreserved praise.

There will be losers; the overall spend on state pensions is anticipated to remain steady at 8% of GDP which means that for all the trumpeted winners- women and the self-employed, there will be losers. The losers look like those who are coming into the workplace now , who will not get the benefit of the second state pension. There also appear to be a substantial number of people with between 7 and 10 years NI payment history will get nothing at all. The young and the immigrants are easy enough targets- the Daily Mail should be appeased.

I’m quite sure, that operating independently , much of the detail would have been different. The major difference between Frank Field’s vision and Steve Webb’s realisation is that words are translated into action. We may have lost something in translation but we have gained so much more than we have lost.

The big win is in the simplicity of the new system which does away with those unloved “pension credits” in favour of a non-means-tested system with simple entitlements. It makes it easy to say that auto-enrolment is a good thing, even for those on low incomes and allows savers , providers and advisers to work in confidence without the usual ifs and buts.

I hope that taken together, the introduction of auto-enrolment and this new flat rate state pension will be seen as a crowning achievement of a Government short on genuine vision , struggling to guide the ship of state through the choppy waters we have recently experienced.

Moving in this bold way to a new system will have meant confronting many vested interest groups within Government. I am very proud , as a lifelong liberal, that it has been a liberal politician Steve Webb, who has made this happen.

It is fashionable to laugh at the Coalition and predict its demise. At least in terms of pension reform, the Coalition has a lasting monument which we will look back on as some achievement.

 

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in auto-enrolment, pension playpen, pensions, Public sector pensions, Retirement, steve webb and tagged , , , , , , , . Bookmark the permalink.

6 Responses to Hats off to Steve Webb for our new pensions system!

  1. Gerry Flynn says:

    “the Coalition has a lasting monument which we will look back on as some achievement.” The Victorian’s built lasting monuments, we now call them “follies”!

  2. Pingback: Never mind the width – feel the quality! | The Vision of the Pension Plowman

  3. As you rightly say, there will be winners and losers when it is looked at purely in terms of the state pension. But the simplicity removes most of the disincentives to save as even small amounts saved will increase the persons income in retirement. Therefore overall the simplicity is well worth it at the price and those who may be slightly less well off have notice and a bigger incentive to put more into their pension once they are auto-enrolled.

  4. Pingback: Seven things to know about the new state pension! | The Vision of the Pension Plowman

  5. Pingback: Vertical disintegration | The Vision of the Pension Plowman

  6. Pingback: Honest! Open Government in operation! | The Vision of the Pension Plowman

Leave a Reply