Ros Altmann was offered the role of pensions minister by the Conservatives but turned it down, Money Marketing can reveal.
Instead, Altmann will be made a peer and appointed minister responsible for financial consumer protection and education.
Former pensions minister and LibDem Steve Webb lost his seat in today’s general election, leaving the Conservatives without a pensions spokesperson.
Prior to the election, Altmann was offered Webb’s job by Chancellor George Osborne and Prime Minister David Cameron if the Conservatives were able to form a Government.
But Altmann decided not to accept the offer because she thought she could have more influence in a broader role, she says.
She says: “Everybody knows I’ve been supportive of the changes the Government has made, it’s things I’ve been talking to governments about for years.
“Since the reforms the Treasury had been asking me to help them implement the changes, things like Pension Wise, because I think they saw me as in touch with customers and ordinary people.”
Altmann drew criticism from some in the industry for accepting the appointment, but she says she will retain her independence and hold the Government to account.
She says: “I will do my absolute best to work on behalf of the ordinary silent majority of this country to improve financial fairness and education from within Government.
“The problem for someone like myself – and I’ve been criticised for accepting the role – is that I spent years as an independent outsider and I know what it’s like. I’ve achieved a lot but if you really want to make the biggest difference you have to be inside, not outside.”
She reveals she advised the Tories not to restrict tax relief on pension contributions before they unveiled pre-election plans to limit the lifetime allowance to £1m and taper relief for those earning over £150,000.
Altmann is due to conduct a review of “financial fairness for consumers” when she assumes office.
She will be investigating whether a charge cap should be applied to pension products – an idea first explored by Labour – rights for older people in the mortgage market and extending Pension Wise beyond at-retirement guidance.
Altmann says the guidance service should be included in auto-enrolment legislation.
She says: “Ideally you’d want included in the member cost of an auto-enrolment scheme a charge for financial education modules.
“Whether those modules are developed by Pension Wise or another body we’ll see but it should be part of the regular communication that you have to have with auto-enrolment. Preferably encouraging employers with tax incentives to offer courses at work.”
A complete ban on commission, which can still be paid for non-advised business, will also form part of the review.
And Altmann says she will crackdown on high pension charges.
The ABI’s audit of legacy schemes found £26bn of assets in schemes charging over 1 per cent.
In March some providers agreed to cut charges on £10bn of savings.
But Altmann says: “It is clear there are a number of companies who are paying well in excess of a far price, often on legacy products.
“We need to name and shame going forward if we are going to be serious about this.”
She gives an example of a saver who contacted her after a provider said they would charge 3 per cent a year for the first five years after increasing contributions to an old pension policy.
She says: “I’m not against the industry, I want to see a successful thriving industry which treats customers fairly, earns good profits and produces good value.”
The full interview with Ros Altmann will be published in Money Marketing later this month.