In all the noise of the United Kingdom leaving the EU, the real work of Government is quietly going on. Knife crime, Nissan car production and Venezuela have received some attention but it is in the Grand Committee room off Westminster Hall that the real revolution will be happening when I lead a debate on pensions.
Two years ago the Government resolved to identify and develop ideas to increase retirement savings amongst the self-employed. Pensions have always been available to those working in the public sector but those who are self-employed or work for private employers have not always been able to access the same financial products. This was for a variety reasons - affordability, knowledge of pension products and simply ignorance of how to start a pension. Worryingly, a quarter of retired people aged 55 and over say they do not know the size of their pension savings.
To address this the Department for Work and Pensions (DWP) proposed the Pensions Dashboard - an online service to allow people to see information from multiple pensions, all in one place, on their smart phone, tablet or laptop, bringing our pensions industry into the 21st century.
The value of the Pension Dashboard must be seen in the success of auto-enrolment launched in 2012.
The Conservative Government has legislated so that all employers must auto-enrol their employee into a workplace pension scheme if they are aged between 22 and the State Pension age, earn more than £10,000 per year and work in the UK.
Employees are able to opt out of auto-enrolment but employers are not – and in order to assist young workers and those over the retirement age, the Government has entitled those aged 16-74 earning over £5,824 to opt-in.
This has driven the creation of millions of new savers – with nearly 10 million eligible employees having been automatically enrolled with an estimated £20 billion extra pension saving at the end of this financial year. Since April 2018 savers have been contributing at least 5% of their eligible income into their private pensions pot, inclusive of employer contribution. Next year this will rise to 8%, including employer contributions.
It is worth making mention of the number of women who are now enrolled in pension schemes. An additional 3 million now have a workplace pension, thanks to auto-enrolment. And amongst the 22 to 29 years age group the participation in the private sector has risen from 35% in 2012 to 79% five years later.
In total, the number of people who possess a workplace pension scheme reached a record high of 41.1 million in 2017, up nearly 50% since 2012.
These pension freedoms have given people greater choice about when and how they use their pension savings and is a truly transformation of our savings culture. This initiative displays true conservative values – creating opportunity, nurturing aspiration and assisting people to take responsibility for their own futures. I hope the importance of the Pensions Dashboard is not underestimated and will be taken forward by other Ministers in the Government. Their initiatives might just knock Brexit off the front page.