Guy Opperman is the Minister for Pensions and Financial Inclusion, and is MP for Tynedale and Ponteland.
Over the past decade, Britain has made great progress in boosting pension power and delivering better outcomes for savers.
The introduction of automatic enrolment in 2012 is undoubtedly one of the greatest long-term policy success stories of the Coalition Government, which has now been taken forward by this Conservative Government. More than 10.5 million employees are auto-enrolled into a workplace pension, saving eight per cent a year.
Today, our Pension Schemes Bill returns to the Commons, after clearing the Lords earlier this year. It is a Bill that delivers pensions for the next decade. It will make your pension safer, better and greener. This is how:
Pensions are a life asset, built up over decades. When we save for a pension, we expect that money to be there for us in retirement.
This Bill cracks down on the callous crooks who put people’s pensions at risk through their reckless behaviour. In future, reckless bosses who plunder people’s pension pots to line their own pockets will go to prison.
We have all heard the stories of cruel pension scams, too. I don’t like to call these crooks scammers, because they are thieves who rob victims of their hard-earned savings. Last year, we banned pension cold calling, but this new Pension Schemes Bill strengthens the powers of the Pensions Regulator to prevent scams happening, making your pension safer.
If you’ve ever tried to check how much you have saved for retirement, it can often involve emptying out draws in the hunt for lost paperwork.
Thirty years ago, many of us had just two or three jobs throughout our entire lifetime. Research shows the average millennial now expects to have an average of 12 jobs, and with auto-enrolment meaning more of us are saving for retirement than ever before, keeping track of pension pots from multiple employers can be tricky.
The Pensions Dashboard aims to change that by creating one single place – just like any other app on your phone – to see all your pension pots.
Dashboards will unite billions of pounds in lost, unclaimed pensions with their rightful owners, and users will be able to clearly see how much they have saved through information that is easy to access and understand.
Privacy is crucial, so dashboards put you in control. You can decide how and when your data is accessed, and who has access to it. This new technology puts consumers in control, and undoubtedly makes your pension better.
The 2019 Conservative manifesto pledged to get Britain to Net Zero by 2050. As the Prime Minister made clear yesterday in his brilliant conference speech, we can do it with investment in clean energy solutions, like wind, solar, and hydrogen.
With trillions in assets under management, our pensions have a crucial role to play.
When you save into a pension, your provider invests that money to provide long-term returns on your savings. If your savings are invested sustainably and ethically in green infrastructure and new technologies, your pension can play its part in getting Britain to net-zero. The evidence is also clear that this still ensures a safe and good return on your investment.
Last year, I introduced new Environmental, Social and Governance regulations – ESG. These require pension funds to take due account of climate risk when making investment decisions.
This Bill goes one step further, requiring pension schemes to take the Government’s Net Zero targets into account, as well as the goals of the Paris Agreement. This helps manage climate risk. and makes sure you know if your pension is invested sustainably.
Some have argued that we should simply divest pension funds away from high-carbon stocks. I am afraid this is a fundamentally flawed idea. Selling assets to others without the same environmental concerns is unproductive and will do nothing whatsoever to get Britain to Net Zero.
Instead, a partnership with business is the way forward, so we can deliver the innovative change required. By investing in the right assets, trustees can nudge, cajole and vote firms towards lower-carbon business practices.
I have seen this in practice across the country. Since last year’s general election, I’ve visited inspiring businesses and innovative organisations that are helping lead us to Net Zero. I met with BP and visited their solar farm in Angus to see how their organisation is evolving from an oil and gas company to a modern sustainable energy company. I’ve also had the opportunity to see how the team from Logan Energy is making hydrogen commercial, working to transform energy systems across the country, including in Teesside under the leadership of its Mayor, Ben Houchen.
The Pension Schemes Bill will transform our pensions system for decades to come, by cracking down on bad pension bosses, utilising new technology to put the consumer in charge, and making sure pensions are playing their part in getting Britain to get to Net Zero. I hope the Bill gets widespread cross-party support from across the Commons at Second Reading later today.