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The news that new Pensions Minister Emma Reynolds has been appointed to a ministerial role in both the Treasury and the Department for Work and Pensions (DWP) should lead to a more “joined up” pensions policy approach, LCP partner and former minister Steve Webb has insisted.
At present, many areas of pension policy are split between the DWP and the Treasury.
The regulation of trust-based occupational pensions, for example, comes under the DWP and the pensions regulator.
Meanwhile, regulation of contract-based pensions provided by insurance companies comes under the Treasury and the Financial Conduct Authority.
“In the past, the two departments have not always been joined up when it comes to pensions policy, with Treasury changes to pension tax relief sometimes undermining DWP efforts to boost pension saving,” Webb said.
“With a combined appointment there is the opportunity for decisions on pensions to fully account for the whole pensions landscape.”
Webb said having a single minister in charge of both could mean that policy is “more coherent” and fully considers the many types of pension arrangements UK workers currently use.
Another potential advantage is that pension tax relief is a policy area which falls firmly within the remit of the Treasury but has huge implications for the whole pensions landscape.
Webb said any reform of pension tax relief would need to fully involve DWP for consideration of how changes could affect occupational pensions, and this will be easier with a minister who serves in both departments.
However, he warned that one risk is that the Treasury’s desire to see pension assets used to promote economic growth at a macro level could mean that the individual member perspective gets “less attention than it should”.
“This is something that the new minister will have to guard against.”
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