With Kendall and Bell imposing so many stipulations on the commission, it’s been hamstrung before it’s even got to work, according to former Coalition-era Pensions Minister Steve Webb.
“They have had one hand tied behind their back from the outset,” Webb said.
“Central to any plans for the future of retirement incomes is a view on how the state pension will contribute, yet they have been told they are not to comment on the future indexation of the state pension and the triple lock policy in particular.”
‘Complex barriers’
The revived commission will be led by Jeannie Drake (a member of the original one launched in 2002), Ian Cheshire and Professor Nick Pearce. Over the next 18 months it will explore the “complex barriers stopping people from saving enough for retirement,” and its recommendations will help Bell “build a future-proof pensions system that is strong, fair and sustainable.”
According to Rachel Vahey, head of public policy at AJ Bell, the commission will likely have to think outside the box to come up with an approach that earns retirees more without hitting businesses. “The solution could be higher contribution rates,” she said. “But new plans for demanding employers stick their hands in their pockets once more, so soon after the national insurance hike, will be deeply unpopular, even if Labour has ruled out increasing pension contributions for employers in this parliament.”
Ministers will at least have 18 months’ breathing room before the commission issues its recommendations.
And the government appears to be well aware of the challenge it has on its hand, with Monday’s review already delayed by over six months.
“Reforming the welfare state is never easy and always contested,” Kendall said.