Following the resignation of the UK’s longest serving pensions minister Guy Opperman, pension experts are warning that it ends a period of stability for the industry.
The government haemorrhaged over 50 ministers in the lead up to the resignation of Boris Johnson as Prime Minister, among which was pensions minister Guy Opperman, who had only just overtaken Sir Steve Webb as the longest serving pensions minister since the post was first created in 1998.
Commentators were quick to raise concerns, at Opperman’s resignation and what it would mean for pensions policy, which they insist requires consistency of leadership.
John Greer, head of retirement policy at Quilter, commented: “This marks the end of a fairly long period of stability in the post, which has typically been a revolving door with many ministers using it as a springboard to jobs in the Treasury. Pensions by their very nature are long term and pension policy benefits from long standing ministers. Setting retirement policy and ensuring we have a well-functioning state pension system is a long-term project but it is unlikely we’ll see the kind of stability Opperman brought for some time now. In just 24 years there have been 14 ministers with only Sir Steve Webb staying for longer than two years.”
Opperman, who became the 51st MP to resign from their government role, took up the position of pensions minister in June 2017.
During his time in office, Opperman drove a number of projects and policies, including the upcoming pensions dashboard. However, his departure leaves a question mark over future progress.
Kate Smith, head of pensions at Aegon, said: “We had been expecting the government response to the DWP pension dashboard consultation with final regulations any day and everything hangs off this, including the timetable for schemes to connect to dashboards. Every day delayed puts the smooth implementation of the dashboard in jeopardy.
“Initiatives to improve member engagement with their pensions were gathering momentum. These need to continue at pace to help improve understanding of pensions.”
Opperman’s resignation could also impact the next steps for auto-enrolment, including lowering the minimum age from 22 to 18, as well as exploring solutions for the self-employed.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, commented: “The DWP has been noted for something of a revolving door policy as ministers came and went with alarming regularity -Opperman’s five-year stint brought much needed stability to the brief.
“However, while important progress has been made in areas such as the pension dashboard, the DWP has also been under increasing pressure with widespread issues of people not receiving their state pension on time or being underpaid. Whoever succeeds Opperman will be under pressure to fix these issues fast.”
According to the Hargreaves Lansdown Savings and Resilience Barometer, pension savings are already falling behind where they need to be for a comfortable retirement. In addition, lockdown savings are being eroded amid the cost-of-living crisis.
Morrissey said: “ Any new minister needs to look at these short-term issues while ensuring long-term savings are properly incentivised.”
According to Greer, change within pensions needs to not only be led by the Department for Work and Pensions, but also the Treasury going forward.
“One such area is auto-enrolment where progress has been hindered in part by the Treasury, which often kicked the can down the road or stifled evolution due to cost.”
He added: “Opperman has been keen to drive customer engagement and help people understand their pension and get value for money. He has been a leading force in pushing for ESG in pensions and investments and developing the available types of pensions such as Collective Defined Contribution. It is without doubt sad to see him go.”
