The government will not rush into a “single saving intervention” for self-employed workers because such a move could be counter-productive, Pensions minister Guy Opperman says.
In a letter to work and pensions select committee chairman and MP Frank Field, Opperman says testing and understanding what works is critical to any good intervention.
Opperman was responding to a letter from Field that describes the government’s pension policies for self-employed workers as “disappointing” and lacking “ambition”.
The government’s review into auto-enrolment last year said there is no simple and straightforward mechanism to bring the self-employed into pensions.
The review proposed using HM Revenue and Customs’ making tax digital initiative to identify the most effective options to increase pension saving among self-employed people.
It also said targeted interventions would be trialled to see what ones work best.
Opperman reiterates these points to Field and says auto-enrolment worked because sufficient time was taken to design and implement the policy properly.
He says the national insurance contributions solution for the self-employed proposed by Royal London was carefully considered and determined not to be the best option at this time.
This was because not all self-employed people pay national insurance and setting up a system to reclaim any payments would be difficult to design and administer.