The FT have been given a briefing from the Pension Market on the announcement of a Commission akin to the Turner commission 20 years ago, set up under Blair, one of those the Turner commission is to sit on this one.

The picture’s of Blackfriars bridge a breath from which I’m writing this piece. My guess it is the cyclist outside  the cycle lane and pulling a commercial load who is going to be of interest to this ~ Commission. I walked over this bridge last night and noticed that most cyclists stay where asked, a bit like the way we save for retirement.

Let’s not be over- excited, this is a means to keep the pensions industry at arms length. The Commission will deal with those working “outside the lane” who aren’t getting a workplace pension. Some may entitled to one and have opted out, some may be under 22 and have to opt in and a great number may be working as self-employed though organised as if a workforce of an employer. London, even the City, is full of these pension vagrants (they aren’t within the system and need help).

We have had a number of options for them put forward so far this year. We have had Nest Insights promotion of Lloyds Bank’s into Lloyds Bank savings schemes,

we have had Arun Muralidhar’s SeLFIE

No doubt there will be many more products including Andy Young’s view that we all should have a second pension through a state run funded CDC plan.

The Commission.

As I have written these last two weeks, the Government is not ready for a solution (as they are to implement a default decumulation fund and consolidation around mega-funds).

The Commission is estimated to sit for 18 months before reporting. We can expect to hear conclusions in the early part of 2027 which means decisions will struggle to be up and running this parliament. It will need the kind of cross parliamentary consensus that was had with auto-enrolment and indeed an idea that grabs everyone as Turner and his crew found 20 years ago.

Here’s the Pension Minister talking to the FT

“We are going to complete the job,” he said ahead of the launch of a commission to examine options to boost pension savings and broaden the number of people setting money aside for retirement.

Bell warned that the country was on track to move backwards on pensions adequacy with young people, lower earners, the self-employed and people from Pakistani and Bangladeshi backgrounds particularly exposed, adding that the problem was “massive”.

“Massive” means 45% of the working age population are doing nothing to save for their future, according to Torsten Bell

This is pretty vague stuff and will need “political consensus”, that’s a good way of passing the buck and he has chosen a new commission which  will be led by Baroness Jeannie Drake, who served on the Turner commission, alongside Nick Pearce of Bath university and former Kingfisher chief executive Sir Ian Cheshire.

What may be forgotten is that before 2012, pension salesforces were rewarded by commission (and savers with advice- albeit with whopping charges). They have led to a new group of savers who have no advisers and little long term saving. There are no pension salesman any more.

Research from the Institute for Fiscal Studies think-tank found that while only 10 per cent of eligible white employees were not participating in a pension plan, the figure rises to 16 per cent and 24 per cent for those from Pakistan and Bangladesh, respectively. The FT have been shown research from the Pension Minister’s DWP

Private pension incomes were on track to be 8 per cent lower by 2050, expressed in today’s earnings terms, according to new modelling by the Department for Work and Pensions to be published on Monday.

Bell is clear that he want to add sails of the reform process (or is that “sales”).

“We are running down one pension system [the defined-benefit system] and have half-built another,” he said. “I’m just adding wind to the sails of the reform process . . . we are ramping up the pace of the reforms.”

Either way

Bell added: “If we carry on as we are, tomorrow’s pensioners will be poorer than today’s. It is not just that it doesn’t grow as fast, it actually goes backwards . . . That is obviously not what success looks like.”

This is taking pension reform back into consultation and while it will get those who operate in this space, the chance to mull things over, it is a long-term project, primarily for a group that the Stakeholder Pension Project tried to get saving at the turn of the century, the Turner Commission decided to leave “half finished” and only Pension Bee and a few smaller rivals have offered to the new target.

Bell is clear who he considers inadequately served and it is not the well off

Analysis on savings rates is sometimes overly focused on what higher earners need to put aside, because

“that is where the state pension does least of the work as a share of their replacement rates”,

he said.  “Government’s job is to be sure you have a system delivering for lower and middle earners.”

A review of the State Pension – let’s hope more effective than the one in 2021

Dr Suzi Morrissey

Unsurprisingly the Commission is being put together alongside the appointment of the PPI’s Dr Suzi Morrissey who will look at the state pension. This is a requirement on Government, the last one ducked taking any action on the work of Neville-Rolfe and Therese Coffey initiated in December 2021