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Life offices divided on pace of Webb’s pension changes

Pensions minister Steve Webb is facing calls to put the brakes on his reform programme as the industry struggles to cope with an avalanche of announcements.

This year, Department for Work and Pensions policymakers have proposed a slew of changes as well as independent reviews of public sector pensions and automatic enrolment.

Aegon pensions development manager Kate Smith says the industry will struggle to cope with the range of changes. She says: “The reform announcements are all happening at the same time, which means there is a lack of resources to actually implement the changes. The pace of reform is too fast and they want a lot of changes to be implemented very quickly which risks putting strain on the industry.”

But Legal & General pensions strategy director Adrian Boulding believes the pace of change is “exhilarating”. He says: “When stakeholder was brought in and, despite the fact it was a manifesto commitment, it took four years and four reviews to get it implemented. New Labour came to power on a colossal majority, so were confident they would be in for at least two terms. Today, we have a coalition Government and while they are hoping it will last five years, they are all aware coalitions are potentially unstable.”

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  1. The trouble with this reform programme is that it’s tackling the wrong things first. Number 1 should have been the annuity trap. Number 2 should have been to stop taxing pension funds. Number 3 should have been to reinstate WoP and life cover and number 4 should have been to simplify the maximum contributions structure (to 30% of gross earnings for everyone with one year’s carry forward).

    Reforming the State Pensions could have been addressed more simply as well. A beefed up basic pension combined with running down the S2P is all very well, but what about the self employed who’ve never had to contribute towards S2P? Will they qualify for a lower basic state pension? It’s all a mess still.

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