'Now is not the time to sit back': Ros Altmann exclusive

Pensions Minister Ros Altmann speaks exclusively to AOL Money

Updated: 
General Election 2015 campaign - April 17th

When the general election saw Liberal Democrat Steve Webb ousted from his position as Pensions Minister, there were widespread concerns that a dedicated expert would be lost, and the job would be taken over by a career politician with little or no knowledge of the pensions arena.

So when Baroness Altmann was confirmed as the new minister, there was a rapturous reception and deep sighs of relief from all quarters.

Her long career as a pensions expert, rigorous and passionate campaigner, and spokeswoman for the rights of older people, have been an ideal preparation for an incredibly challenging role, taken on during a time of enormous change.

She spoke exclusively to AOL Money about her objectives and aspirations as Pensions Minister.

What are your priorities?

My priorities are clear: to strengthen British pensions, improve later life incomes, and protect the pensioners of today and tomorrow.

As our population ages, it is more important than ever to help, encourage and empower people to plan and prepare for their later years. I will take forward work to bring in the new State Pension, help millions more to be enrolled into good quality workplace pension schemes, and safeguard new freedom and choice as to how people access their savings.

How important is communication and education, and is enough being done?

We have already introduced the free and independent Pension Wise service so that people approaching retirement can be guided to take advantage of the new pension freedoms armed with the key facts.

This is a huge step in the right direction, but more is needed to get across to people the importance of long-term saving, especially for those who are starting out in their careers. We need to improve financial education and engagement so that more people understand how to plan for their long-term future, and appreciate that there is real value in doing so.

I want as many people as possible to feel that having a workplace pension is always the best option. And I hope that in time we can convince workers that by voluntarily increasing the amount that they pay in above the standard minimum contribution, they will reap the rewards when they retire.

In broader terms, Pension Tube offers a free and engaging source of information through video content. Further help and guidance is available from The Pensions Regulator and The Pensions Advisory Service.

Is it fair to make people responsible for decisions about their income in retirement when the industry is so complex?

Complexity should not be a barrier to people being able to use their pension savings as best suits their circumstances. I believe that those who have saved while working should have the freedom to spend their money as they see fit in later life.

But people do need to approach these freedoms with their eyes open and armed with the facts. This is where Pension Wise comes in.

Pension Wise is a free and impartial guidance service that helps people approaching retirement to understand their options. It is available online, over the phone and face-to-face. It is important to remember that Pension Wise is a guidance service; staff don't offer financial advice. But they will help you to understand the importance of considering paying for independent financial advice, and how to find it.

Can you ever see a day when young people engage with pensions?

Young people are already engaging with pensions in a way never seen before thanks to Automatic Enrolment. Employers now have to enrol anyone over the age of 22, who earns more than £10,000 a year, into a workplace pension. Just 9-10% of people who are automatically enrolled are choosing to opt out, and younger workers are proving to be the least likely to do so. Figures show that pension membership has risen across all age groups, and the largest increase has been with 22 to 29-year-olds, which shot up from 36% in 2013 to 53% last year.

We can, of course, do more to help younger people understand the value of saving for the future, and I will be looking at ways of doing just that.

Do you have any concerns about pension freedoms and pensioners being targeted by scams?

It has always been the case that people need to be on their guard if they are to avoid becoming the victim of a financial scam. Now that this issue is getting more attention, I hope people are becoming more alive to the risks. If an offer seems too good to be true, it probably is.

I cannot overstate the importance of those who plan to access their money under the new freedoms speaking to Pension Wise before they take any decisions. Here they will receive free and impartial guidance about their options from a trusted Government source. We have made it a criminal offence for fraudsters to pass themselves off as Pension Wise.

Savers should also consider seeking professional advice from an Independent Financial Adviser authorised by the Financial Conduct Authority.

We have been working hard with our partners to tackle the scourge of pension scammers. Project Bloom, whose members include police forces, the National Crime Agency, Government departments, including the DWP, and regulators, was launched in 2012. Since then a range of action has been taken including police raids, shutting down fraudulent websites and tightening the rules over registration.

With so much change implemented recently, is there anything left for you to do?

Much was achieved under the previous Government, such as the introduction of new pension freedoms, Automatic Enrolment, and the Triple Lock. The groundwork was laid for the new State Pension, which is on track to be rolled out on April 6, 2016, for those reaching State Pension age from that date onwards. The new State Pension will reduce means-testing and ultimately create a system that is easier to understand.

But much work remains to be done to ensure Automatic Enrolment succeeds for small and micro employers, pension freedoms work well and the new State Pension is clearly communicated. Now is not the time to sit back, and I will be working hard to try to ensure these reforms work properly for the benefit of both today's and tomorrow's pensioners.

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