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Pensions minister Steve Webb has pledged to extend the reach of government plans to reform small pension pots.
The government is currently planning moves to consolidate the small pots that will be created by the introduction of auto-enrolment.
Webb (pictured) said that once that work had been completed, the government would focus on sweeping up existing small pot 'stock'.
'Initially we are dealing with the flow but there are a very large number of pots sitting out there,' he said. 'The green paper doesn't have a lot to say about those but the sooner we can get on to that the better.'
Webb said he would prefer a solution that allowed people to transfer or accumulate big pension pots automatically, meaning reforms may not be limited to so-called small pots of around £10,000 but also apply to much bigger funds.
'I still want to put on the table the bigger vision...I still hanker after fat pots.'
Comments (2)
Whether the aggregator, the follow you around or a hybrid option is agreed, you do have to provide the member with an element of control. The main purpose is to consolidate the pots for all those who do not engage with pensions. The individual should be given the choice on job move whether to consolidate or not. The default for a non reponse should be to consolidate thereby achieving the objective for those who do not engage (and for those who wish to) . Those who do not wish to consolidate will have their own reasons for not wanting to consolidate and we should not enforce the transfer.
08:54 on 22 February 2012
But Mr Webb, when are you going to do something ~ anything ~ about what the Conservatives promised in their pre-election manifesto, namely to "reinvigorate the UK's long-term savings culture" by addressing all the damage inflicted on the pensions framework by successive governments over the past 25 years? Reforming small pension pots is just a distraction from enacting measures that will encourage people to build up significantly larger pots. Okay, so you "hanker after fat pots" ~ but you don't seem to be doing anything at all to encourage people to embark on and then maintain the levels of contributions necessary to build up those fat pots. Why is that?
My guess is that you've been told to come up with lots of new ideas to create the impression that you're doing something useful to improve the retirement funding landscape, whilst the Treasury pursues an entirely contrary agenda that's doing exactly the opposite. Cut the LTA, cut the annual allowance, ignore calls for the restoration of Contributions Insurance, ignore calls to restore an element of life cover within a PP, ignore calls to scrap the dividend tax debit, ignore calls to scrap the annuity trap, ignore calls to scrap the punitive 55% death tax charge on unspent funds in retirement and now Danny Alexander's making noises about cutting the TFC allowance at retirement, soon I suspect to be followed by levying a tax charge on the PCLS.
Everything you're saying Mr Webb is just a mendacious smoke-screen for what's really happening.
10:24 on 22 February 2012
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