The reforms of state and private pensions remain at a critical point, newly appointed minister Ros Altmann has warned in her first speech in the House of Lords.
Altmann was appointed pensions minister in the aftermath of the last election, and used her first comments to warn that much work remains in implementing the reforms introduced by her predecessor Steve Webb.
She said: “I am well aware that the real tests for success are still to come, notwithstanding the encouraging trends so far.”
In particular, Altmann added that while it is encouraging the automatic enrolment has so far been successful, only 4 per cent of employers have so far gone through the process.
She said: “The hardest work is just starting as there will be many challenges in ensuring the huge numbers of remaining employers manage the auto-enrolment process. In particular, I am conscious of the situation of the micro employers.”
Altmann also said that she was already in meetings with regulators around the risk of frauds and abuse of customers, and the costs associated with providing advice to savers.
“I have already had conversations with the FCA about this issue, and the issue of financial advice, and the difficulties faced by advisors and their customers in accessing affordable advice,” she said.
The new pensions minister also repeated the Government’s concerns about access to the new freedoms which were highlighted yesterday by Chancellor George Osborne.
Osborne revealed the Government plans to consult on “excessive” exit fees and obstacles to transferring between providers in Prime Ministers’ Questions. Altmann said the performance of the marketplace has so far been “most disappointing”.
She said: “Of course we must also make sure that customers have good value options to choose from.
“The pensions industry needs to help individuals act as they would like to and as the law now allows, but so far, too many firms are not offering many new options to their customers, or are imposing hefty charges, lengthy delays or exit penalties on those wishing to transfer to other providers.
“Ultimately it is in the interests of providers to look after their customers well. Their long term success requires a new approach.”