Former Labour pensions minister Malcolm Wicks has warned newly appointed LibDem pensions minister Steve Webb to beware of the “deep vested interests” of the pension industry.
In a letter, broadcast on BBC’s Money Box last week, Wicks says: “Opposition is easy. Government is tough, very tough. You will certainly not be short of advice. Among the more polite will be the pensions industry but remember that they have deep vested interests and cream off too much from people’s pensions.”
Webb confirmed he was still keen to bring in a citizens’ pension over the long term. He said: “We have a system with almost three pensions. A basic one that we are trying to increase, a complicated second one that few people understand and then a mass means test.
“The goal has got to be ideally a single simple system if we can get there. We are talking about a decent state pension and that does not come cheap and we have to think about the long term. But if we always have got in the back of our mind, well, we cannot do major reforms because there is never any money, then we are cursed with incrementalism and we just cannot go on like that.”
Axa head of pensions development Mike Morrison says: “Most pensions these days are nowhere near as expensive as they were previously. With the RDR, a lot of the pension industry’s products are more cleanly and keenly priced.”
Syndaxi Chartered Financial Planners managing director Robert Reid says: “Wicks’ comments underline the sheer number of pensions ministers Labour had and the fact that none of them ever really got their head around the problem.”