Calls grow for long-term savings commission

A new report from People’s Partnership makes the case for a cross-party commission to advise on pensions policy.

As the government’s focus on the pensions sector continues to intensify, a new report has added to calls for the ‘de-politicisation’ of policy through the establishment of a long-term savings commission.

People’s Partnership, which runs The People’s Pension master trust, published a report today (13 February) calling for the government to set up a commission to provide a long-term plan for retirement savings policy that will span changes of government.

The report was published by Edinburgh-based financial consultancy The Lang Cat, and is based on “in-depth interviews with leading figures from the pensions industry”, according to a press release announcing the publication.

Strategic purpose
Tom McPhail, director of public affairs at The Lang Cat, argued that the UK pension system “lacks a coherent strategic purpose”, with policies and changes instead being “fragmented” and failing to build on any consensus.

“People aren’t saving enough and they’re not able to engage effectively with the key decisions they need to take,” McPhail said, highlighting major issues such as small pension pots, the difficulty of changing providers, and the complexity of the tax system.

He added: “The only realistic way we can tackle them is by setting up an independent long-term savings commission that can make recommendations for all savers, and that will enjoy cross-party support. We owe it to future generations to work together.”

The report follows similar calls made in the wake of the government’s divisive ‘lifetime provider’ consultation. Nucleus Financial, an investment and retirement platform provider, wrote to pensions minister Paul Maynard and shadow pensions minister Gill Furniss at the end of January urging them to build on the success of auto-enrolment, which also emerged from an independent commission.

However, speaking at a Lang Cat event last week, Maynard said the time was not right for such a move.

Consensus “vital”
The People’s Partnership’s report states that the commission should look to establish “a consensus on the purpose of the UK’s pension system”, provide continuity through changes of government, and identify or commission research and data into under-researched areas.

It cited the “raft of consultations and policy initiatives” emanating from last year’s Mansion House Speech and Autumn Statement, including the lifetime provider proposal, consolidation plans, and the potential development of collective defined contribution pension schemes.

Phil Brown, director of policy at People’s Partnership, said it was “vital” that there was a consensus across political parties, the pensions sector and other stakeholders.

“While a new commission would be an important and welcome step, long term strategic change in pensions will only be possible with the full support from the government of the day,” he said. “Pensions are crucial to building stronger financial foundations for millions of people, meaning they must be viewed as a political priority.”