Budget: Chancellor pushes ahead with 'Pot for Life'

Chancellor Jeremy Hunt has reaffirmed the Government’s plans to give people one ‘pension pot for life’, moveable from job to job, despite concerns shared by the financial advice industry. Mr Hunt launched a consultation on the proposals as part of his Autumn Statement in November. The reforms would give workers the right to nominate the pension scheme they want their employer to pay into, which the consultation claims could help solve the problem of lost pension pots as workers move jobs Nearly two thirds (63%) of advisers are concerned about the impact of the Government’s proposed lifetime pension provider model. Advisers said the plan could make communication more difficult and reduce employer interest in pensions, according to a survey by Royal London. Gail Izat, managing director for workplace at Standard Life, said the Pot for Life ambitions were not a short-term fix and will require a significant level of planning and preparatory work. She added that the much-delayed Pension Dashboard project must be completed first. She said: “It's worth remembering that the UK is already on the journey to creating this infrastructure through other initiatives, like the Pensions Dashboard and small pots work but these initiatives must be completed before a pot for life system can become viable. “With around 14 million defined contribution pension savers currently not on track for their expected retirement income according to Phoenix Insights, we also need to see a greater focus on savings adequacy prioritised. "Plans to lower the age of eligibility for auto-enrolment to 18 and remove the lower earnings trigger should be accelerated and, when the time is right, minimum contributions need to rise to give people a chance of securing a decent standard of living in retirement. Introducing Pot for Life without these other necessary reforms will add further complexity to our pension system."

Budget: Chancellor pushes ahead with 'Pot for Life'

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