The new State Pension comes into payment from April 6 Next Year. This reform will bring much-needed clarity to a system that few people truly understand, and will reduce the need for pensioner means-testing. Alongside this, over 5.4 million employees have been enrolled into a workplace pension by around 60,000 employers, dramatically increasing the number of people saving for later life. However, they represent around only three per cent of employers as large and medium-sized firms were first to implement automatic enrolment.
The Government’s priorities are to carry through those important reforms to ensure they are a success. This means new State Pension being delivered as smoothly as possible and small and micro employers getting the help and support they need as they meet their automatic enrolment duties.
Government and the pensions industry are also currently working through the changes following from the new pension flexibilities which allow scheme members to have more freedom and choice about how and when they withdraw their pension savings.
All these reforms will increase the number of people saving into workplace pensions, introduce new freedoms allowing savers to access their cash, and implement a new State Pension that will be far easier to understand in the future. However, we are conscious of the need to ensure Government, providers, employers and members are able to focus on these changes to ensure their success.
That is why we have decided that the time is not right to implement Defined Ambition, Collective Benefits and Automatic Transfers. The time is not right to ask the pensions industry to absorb the new swathe of regulation that would be needed to make such further reforms work effectively. The market needs time and space to adjust to the other reforms underway and these areas will be revisited once there has been an opportunity for that to happen.
This statement has also been made in the House of Commons