New Pensions Minister's strategy

13 October 2016

The Government's New Pensions Minister Sets Out His Strategy For The Future Unlike Baroness Ros Altmann, the government's previous pensions minister who was a very 'visible' minister, Richard Harrington as been somewhat more reserved and until now he seems simply to have been getting on with the job rather than making lots of public announcements and being interviewed in the press. However, Richard Harrington has now started to make clear what his intentions as minister are in a recent interview with CityWire.

Who is Richard Harrington?

Until Theresa May took over the Conservative Party, you would not be alone in not knowing who Richard Harrington is. He has happily been a backbencher since winning his Watford seat in 2010. Joining the Conservative Party at Oxford University 40 years ago, he has a diverse work history spanning John Lewis and his own property company that he founded in the 1980s.

Richard Harrington's views on:

Pension freedoms

Pension freedoms were one of George Osborne's most popular and most radical policies and one that have been warmly welcomed by most people. Richard Harrington think pensions freedoms are a good thing but they need to be marketed better:

"At the moment people do not feel that ownership. I would like the whole thing marketed to say that if you put in £100, the government will put in £30, your employer will put in £70 and it is for your retirement. We have to get people to understand it is their money."

Lifetime ISA

Auto enrolment has been one of the big successes of recent years with more and more people saving for their retirement thanks to the policy. However, according to the former pensions minister Baroness Ros Altmann the introduction of the Lifetime ISA puts the success of auto enrolment at risk as it could see people forsaking pensions for the Lifetime ISA. Richard Harrington disagrees but does think that there should be more information available that is clear and accessible.

"The lifetime ISA is a welcome addition to the spectrum of different products, but my fear is over complication. People find pensions complicated and there is a risk people will get lost if there are loads of different savings products."

Long term pensions policy

Richard Harrington would like to see more harmonization between the two ways people plan for their retirement, buying a house and having a pension:

"Property is also saving for your future. While an arbitrary distinction between the two is necessary at the moment, in the long term it is logical to move to the stage of bolting on a long-term non-retirement savings product in the same pot."

Pension funding issues

We have seen several instances of where companies have had pension funding issues in recent years such as BHS. Whilst some commentators are making dire warnings about the funding of company defined benefit schemes, Richard Harrington recognizes the problem but doesn't think it is time to panic yet:

"As far as the scale is concerned, to use a Theresa May comment, I do not accept the sky is falling in. When things go wrong like with British Home Stores (BHS), we have to make sure the regulator has the powers it needs and we are awaiting [Chief Executive of The Pensions Regulator] Lesley Titcomb's report on BHS to see if the whole system of regulation needs to be changed."

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      Jack was a Marketing Executive at Smart Pension. Jack served as Smart Pension's Marketing Executive from September 2014 to October 2…