Put Retirement Saving Above Politics

7th October 2014

John McTernan, former political secretary to Tony Blair, recently commented that, in the aftermath of the Budget, without consultation, the entire structure of the British pension settlement was torn up by the Chancellor.....it is the death of private pensions, it is the death of occupational pensions in the medium term and the death of pensions in their totality. (Money Marketing, 18 September 2014.)

In a new article published today by the Centre for Policy Studies, Michael Johnson considers the validity of this statement and concludes that the UK needs an independent Savings Commissioner tasked with developing policy, free of the electoral cycle, to catalyse a broad-based, retirement saving culture.

"Retirement saving needs to be placed above politics, not least to confront some very difficult home truths, and facilitate some tough decision-making. The DWP and the Treasury should co-sponsor an independent Savings Commissioner (supported by a small team) tasked with developing policy, free of the electoral cycle, to catalyse a broad-based, retirement saving culture. Co-sponsorship is important; successive governments (irrespective of political hue) have exhibited pushmi-pullyu behaviour. The DWP wants people to save, whereas the Treasury favours consumption (not least to bolster VAT receipts).

The Commissioner's guiding principle should be to act in the long-term national interest, ideally with nothing deemed "out of scope". To be clear, the Commissioner would not be in a position to implement policy; the role would be to make recommendations to government, which, given the Commissioner's independence, would be hard to ignore. Ideally, in time, the Commissioner's credibility would become akin to that of the Office for Budget Responsibility's (OBR)."

Read the full blog here