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UK pensions minister to make decision on NEST 'within days'

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  • UK pensions minister to make decision on NEST 'within days'

UK - Pensions minister Steve Webb has sought to separate the introduction of auto-enrolment from that of NEST, saying the UK coalition government remained committed to auto-enrolment, but that he would announce his decision on NEST shortly.

Speaking at the National Association of Pension Funds conference in Liverpool, Webb stressed that the review of auto-enrolment, written by Adrian Boulding, David Yeandle and Paul Johnson, was just that - a review of auto-enrolment and "not a NEST review".

He added: "You won't have long to wait to hear our views on NEST."

The minister said auto-enrolment would be delivered on the current timetable and that he wanted to make it easy for employers to use the certification regime because only one in three workers are currently in a workplace pension scheme.

"We must regulate in a light-touch way," he said. "We are looking at section 251 and 75 rules, as we do not want to put unnecessary hurdles in the way of good pension schemes."

The minister said simplification of the basic state pension was a priority, as people needed to know what they were going to receive. 

"I am proud of the fact we have restored the basic state pension's link with prices rather than earnings, but we need to make it simpler still," Webb said.

"One in three calls to the Pensions Advisory Service are about the basic state pension."

When challenged by conference delegates about the replacement of retail price index (RPI) by the consumer price index (CPI) as the index for pension increases, he reminded the audience RPI was not always higher than CPI and that the former was actually negative in 2008.

"No index is perfect, but when CPI is being targeted by the Bank of England, it has to be the index for pension increases," he said.

When asked by a delegate whether the government would introduce overarching legislation to override final salary schemes that specifically mention RPI, the minister said the Department for Work and Pensions would be consulting on CPI and indexation.

He also warned that the state pension age would "definitely have to rise" and that the government would be making an announcement on this shortly.

Life expectancy for 65 year olds has risen by three years over the last decade, he added, and scrapping the default retirement age and increasing the state retirement age are necessary responses to longer lifespans.

"By spending 35 minutes listening to me today," he said, "you have extended your life expectancy by nine minutes."
 

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