Pensions policy: A little more consultation, a little less action please

As Nigel Stanley and I write in Third Time Lucky: Building a Progressive Pensions Consensus, consensus-building is paramount to pensions policy. Policy decision can take years, even decades, to make a difference – they might have to survive several changes of government (not to mention ministerial changes) to deliver the desired impact on people’s retirement outcomes. This is one of the reasons that government consultations on pensions are extremely frequent, and usually quite open-ended affairs, reflecting the consensual nature of this policy area more generally.

But there are worrying signs that this is no longer the case. The Pensions Bill currently working its way through the House of Commons offers us a prime example. Pensions provision in the UK is currently undergoing the ‘automatic enrolment’ revolution, with employers required to enrol most of their workforces into a pension scheme, and make contributions above a minimum level. Clause 34 of the Bill, however, grants the government the power to create exceptions to these requirements through regulations without parliamentary approval. Exceptions can be created that are ‘framed by reference to a description of worker, particular circumstances or in some other way’. In other words, the government may suspend auto-enrolment duties at any time, for any reason.

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Image: Dave Gibbs

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