The PMI welcomes the appointment of Emma Reynolds MP as the new Minister for Pensions. As the new Minister takes office, a poll of PMI members suggests that there are some reforms to the pension system that are considered to be of particular importance. The poll, which was open until the afternoon of 4 July, asked respondents to rank a series of proposals in order of preference.
Five proposals were ranked highly:
• Implement changes to auto-enrolment to reduce the eligibility age to 18 and to remove the lower earnings limit for contributions
• Increasing the minimum rate of auto-enrolment contributions
• Improving financial education across the workforce
• Simplification of the pensions tax regime
• The creation of a standing Pensions Commission
Tim Middleton, PMI’s Director of Policy and External Affairs, commented: “We congratulate Emma Reynolds on her new role and wish her every success. The appointment comes at a time when there is much crucial work to be done. It is clear that our members are keen to see reforms introduced by the new Government. Some proposals could be achieved over the short term, but others would involve major changes that would take years to enact.”
The most obvious changes called for are to the auto-enrolment regime. The 2023 Act received Royal Assent, but the Regulations required for their implementation have yet to be laid before Parliament. Many in the industry have been calling for an increase to the minimum statutory rate of contributions for years.
Middleton added: “What is also striking is the desire for the Government to commit to longer-term projects. Financial education is clearly important to PMI members. There is also a desire to reform the tax regime, which ironically has complicated a system it was introduced to simplify. A standing Pensions Commission would allow pensions policy to be formed for the long term without being compromised by the short-term constraints of the Parliamentary system.”
Middleton concluded: “There is much to consider here. We welcome the opportunity to meet the new Minister for Pensions to discuss these proposals. We are sure Emma Reynolds will rise to the exciting challenge of her new position and confirm that we would be delighted to offer our support.”
David Lane, Chief Executive of TPT Retirement Solutions, said: "One of the most pressing priorities for Emma Reynolds as the new Minister for Pensions is the expansion of automatic enrolment to ensure more people build up more savings for retirement. Auto-enrolment has already been incredibly successful in helping people to grow their pension pots, but raising minimum contribution levels would lead to a substantial increase in pension savings for millions of workers. We also need to consider how those aged under 22 and those in part-time work are brought into the fold.
“A renewed focus on innovation in the pension consolidation space would also be welcome from the new Minister. Reform in this area could allow pension schemes to benefit from increased scale to deliver better returns for savers.
“Finally, the new Government should consider legislation to allow the creation of multi-employer Collective DC pension schemes. Employers, scheme members and the wider economy could all profit from their introduction, and we hope to see their increasing adoption in the coming years.”
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