The Queen’s Speech is always an important event in the political calendar, showcasing the Government’s agenda for the forthcoming parliamentary session. With a general election on the horizon, it included a number of interesting announcements, notably the plans to allow workers to contribute to Dutch-styled collective pensions. This would ‘pool’ the risk between members and potentially allow for more stability in pension outcomes upon retirement. But as there were already a number of reforms announced in the last Budget, this has led to concerns within the industry that the sheer volume of new legislation – albeit well intentioned – is leaving consumers confused.
Could it be that all sides would benefit from postponement, as we attempt to digest the latest round of legislation? Not everyone has been phased into Auto-enrolment yet, leaving a large number of potential investors confused about the choices and their implications. Research shows this can lead to paralysis of action which, in the end, will benefit no-one.
Although intended to provide more value to pensioners and reduce the risks associated with individual pension schemes, there is scepticism on both sides, even though these pool schemes have operated successfully in the Netherlands and Scandinavia for some time.
Perhaps the Government should invest in a campaign of real awareness as it has with other issues that ultimately affect the purse, like health and education? So that when we eventually retire, we will all be happy to tip toe through the tulips in our English Country Garden.