The government’s revived Pensions Commission, led by Baroness Drake, is set to re-examine auto-enrolment and the state pension age (SPA).
One of the commission’s aims is to build cross-party and industry consensus on how to improve pensions savings adequacy.
Alongside this commission the government has also launched a review of the SPA. It has commissioned two independent reports to determine how to set the SPA for future decades.
The commission will look at a range of issues, which will include current auto-enrolment contribution levels, and how to tackle the problem of certain groups saving very little for retirement.
The commission’s recommendations to improve future retirement incomes and address the barriers that currently prevent some saving for retirement will be reported in 2027.
This marks the second phase of the government’s pension review. The first phase of the review brought in changes which will see the creation of pension ‘megafunds’ in the workplace sectors, designed to boost investment into a wider range of assets and deliver better value for money for savers.
Yesterday’s announcement confirmed that proposals for change will be beyond the current parliament, with no increase in AE levels within the next four years.
The previous Pensions Commission was set up in 2002 and led by Lord Turner. It resulted in the introduction of auto-enrolment.
The commission unveiled yesterday will be made up of Baroness Drake, a member of the original commission, an architect of auto-enrolment, and a Labour peer since 2010, Sir Ian Cheshire, chair of the Institute for Government and chair of Land Securities Group, and Professor Nick Pearce, director of the Institute for Policy Research.
It will aim to build a national consensus working with a number of stakeholders, including the Confederation of British Industry, the Trade Union Congress and the wider pensions industry. The announcement of the commission and its remit has been broadly welcomed by pension providers, particularly across the workplace sector.
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