Queen's Speech Details Further Pension Reforms
On Wednesday 18th, Queen Elizabeth outlined further reforms of the UK’s pension system during the annual Queen's Speech. These changes aim to continue the work automatic enrolment started back in 2012, to bring pensions in Britain into the 21st century.
The Pensions Bill
The new Pensions Bill announced aims to further reform private pensions by:
• Providing protection for people in Master Trusts, these are multi-employer pension schemes often provided by external organisations
• Remove barriers for consumers who want to access their pension savings flexibly
• Restructure how financial guidance is delivered to consumers
The Benefits to Consumers
According to the Government, the Pensions Bill reforms have three major benefits to the public.
Firstly, Master Trusts would have to demonstrate that schemes meet strict new criteria before entering the market. The Bill aims to create greater powers for The Pensions Regulator to authorise and supervise these schemes when necessary, and take action when required.
Secondly, a cap on early exit charges aims to create a system that enables consumers to access their pensions without unreasonable barriers.
Lastly, a new pension’s guidance body would be created which would bring together the Pensions Advisory Service, Pension Wise, and the pension services offered by the Money Advice Service. The objective of this would be to streamline pension advice and help simplify access to pension help and advice. Additionally, a new money guidance body would replace the Money Advice Service and be tasked with identifying gaps in the financial guidance market to make sure the public can access high quality debt and money guidance quickly and easily.
Auto Enrolment & the Pensions Bill
These new reforms are designed to work in partnership with the Workplace Pension Reforms in place since October 2012. The Government’s accompanying whitepaper to the Queen’s Speech states that automatic enrolment has continued to be successful in revitalising pensions, and has ‘reversed the downward trend in private pension’s participation.’
Take the Hassle Away
Whilst the changes announced on Wednesday are designed to help simplify pensions and financial guidance for the consumer, for businesses they are the latest in a long line of reforms which need to be acted on. Like automatic enrolment currently in process, to RTI before it, and looking ahead to Holiday Pay changes, if you’d like to do without the hassle and time these changes demand, why not look at outsourcing your company payroll?
The IRIS Managed Payroll Service is fully RTI and BACS-accredited and complies with the latest legislation, so you can focus on running your business safe in the knowledge that we have things covered.