LONDON — The U.K. government has quietly shelved the former Conservative chancellor’s plans to introduce a “pot for life” for pension savers.
A Department for Work and Pensions official with knowledge of policy discussions, granted anonymity to speak freely, confirmed to POLITICO that “no active work is being taken forward” on Jeremy Hunt’s proposal to legislate for a moveable workplace pension.
Hunt, the former Tory chancellor, announced the pot for life plans in his Nov. 2023 autumn statement.
The policy aimed to tackle the problem of millions of small workplace pension pots being lost as workers change jobs, with employers instead paying into one portable pension pot which would be taken from one job to the next.
The DWP published a call for evidence last November, but the proposal was widely criticized by the pensions industry.
“There is little evidence that the introduction of a lifetime provider model will have benefits for savers,” the Pensions and Lifetime Savings Association told the last government earlier this year.
In his March budget this year, Hunt said he “remained committed” to the lifetime provider model, but it was notably absent in the Conservative Party’s manifesto leading into the July election.
Britain’s new government will instead focus on delivering a long-delayed pensions dashboard so savers can track their lost pensions.
Hunt’s successor Rachel Reeves has meanwhile announced plans for pensions “megafunds” which aim to consolidate the fragmented pensions landscape.
The pensions industry welcomed the demise of Hunt’s pot for life.
“This would have been a massive administrative hassle for employers, would have introduced considerable cost into the system and would have risked less well informed and engaged workers being left behind in potentially inferior arrangements. It’s great news that this idea has been dropped,” said Steve Webb, a former Liberal Democrat pensions minister and now partner at LCP.
Tom Selby, director of public policy at AJ Bell, said pursuing the reforms before delivering a pensions dashboard “would have been like throwing two rocks at the same bird.”
“Given how many times the launch of the first dashboard has been delayed, it makes sense for the government to prioritize this rather than pushing ahead with a second project aimed at tackling the same problem that would inevitably demand significant time and resources,” Selby said.
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