Steve Webb became the coalition Government’s pensions minister after winning his seat for the Lib Dems at Thornbury & Yate at the 2010 General Election and since then he has trail-blazed his way through the entire UK pensions system, writes Mark Soper.
Mr Webb is again beating the drum for ‘’ better pensions’’ and today his target is the legacy private personal and occupational pension schemes ran by insurance companies who reportedly are raking off charges as much as 3% p.a. from an individual’s pension pot. He has given the insurers an ultimatum to find a way to reduce these ‘’shocking’’ charges and quickly or he will legislate.
To some, Mr Webb is seen as a self-styled man of the people, starting out at the IFS researching poverty, benefits and taxes and as pensions minister has overseen the introduction of Workplace Pensions now firmly embedded in the UK’s largest employers and by 2017 almost all employees will have been enrolled into a pension plan.
As part of this process he fought the established pension providers who were demanding an ongoing charge on Workplace Pensions funds of at least 1.0% p.a. but next year a charge cap of 0.75% p.a. will be introduced.
He has also been the architect of the new private pension ‘’freedoms’’ announced in the 2014 Budget and taking full effect from next April.
Mr Webb is, however, not necessarily popular with everyone and as part of the overhaul of the State Pension System first started by the previous Labour Government, he has along with the OBR overseen the linkage of the State Pension Age with life expectancy. The result of this has been to accelerate the increase in State Pension Age for both men and women to age 66 in 2020 and a further increase to age 67 between 2026 and 2028 with further increases planned from the 2030 onwards.
Many of his detractors were women who under the Labour proposals would have been impacted by the increased State Pension Age in 2020 but this was brought forward by the coalition to 2018 resulting in some women losing pension income up to £15,000. A reprieve was given and the maximum wait would be eighteen months rather than two years.
What next for Mr Webb?
There is a general consensus that Steve Webb has navigated the thorny issue of pensions well but much will of course depend on the outcome of the General Election next year. Assuming the coalition continues, however, then we at RetireEasy expect to see a new pensions minister and a promotion for Mr Webb
