Torsten Bell: New pensions commission will not solve adequacy issues

The pensions minister has dismissed calls for a new pensions commission, arguing that it will not solve the industry’s problems.

Speaking at the Pensions and Lifetime Savings Association’s Investment Conference in Edinburgh yesterday, Torsten Bell said people who thought a “technocratic” approach to solving adequacy issues were “in la-la land”.

Over the past two years there have been calls for government to set up an independent commission to explore how to improve pension adequacy and expand the auto-enrolment regime.

Nucleus Financial, an investment technology provider, published an open letter to the minister on Monday calling for a commission to address “a lack of progress in the public’s confidence in securing a comfortable retirement and growing uncertainty surrounding the pensions system”.

Others – including People’s Partnership and The Investment and Savings Alliance – have argued that the government should seek to replicate the success of the Turner Commission, which ran from 2002 to 2006 and triggered the introduction of auto-enrolment.

However, Bell issued a robust rebuttal of the call yesterday, arguing that the political landscape had shifted since the Turner Commission.

He said that the “stakes are much higher” than they were in the early 2000s.

The minister intimated that it was harder to get a cross-party consensus, adding that the government should instead seek to leverage its strong majority to act, rather than initiate more discussion.

On Monday, Andy Tully, technical services director at Nucleus, said: “It’s never been clearer that the UK public needs to start planning and saving for later life much, much earlier. But they need support from a pensions system that is consistent, stable and encourages long-term saving.

“Automatic enrolment was a recommendation by a Pensions Commission reporting in 2004 and 2005, which has been a great step forward in encouraging more people to save for their retirement.

“However more needs to be done and we firmly believe that establishing an independent savings commission could again make balanced recommendations to encourage long-term savings, while promoting greater consistency in pension and savings rules.

“The government clearly has a focus on boosting economic growth and is looking at the role pension savings can play in this. We firmly believe that their growth agenda will have more chance of succeeding if people feel confident to save and invest for their future.”