At this point I panic a bit about whether I will have enough to write, then immediately realise it will be the opposite problem- so much has happened that I will run out of words.
That is likely to be the case this year too, and consequently I will focus on just a few key issues, and list a few of the others.
In 2012 the whole breadth of the pension world has been under the spotlight – from the proposed changes to the State scheme, through the commencement of the flagship auto-enrolment programme, to the proposed threats to future pensions tax relief.
The current ideas for State pension reform had been mooted in 2011 and were expected to be progressed in 2012. The proposals included a flat rate pension of £140 per week, a reform of means testing and further changes to the State pension age. The reforms were announced in the Queen’s Speech in May, and a white paper was eagerly awaited
In July with anticipation reaching fever pitch Steve Webb announced that the white paper would be delayed until the autumn, and in September 2012 we were further deflated by the news that the white paper would now just be ‘minty green’ and up for further consultation. Cost and transition were cited as issues to be resolved, particularly for those who might have benefits in excess of the new flat rate.
This leads us on to the main event of the year – auto enrolment, which at last commenced on 1 October. To start with it is the big companies that are being enrolled and it appears to be a case of “so far, so good”. However, the long-term effectiveness of auto enrolment is likely to need a concise and speedy reform of the State scheme.
All year we have been bombarded with research on trends for opting out and it would be fair to say there has been no consensus. The best I can leave you with is the DWP Attitudes to Pension Survey from November 2012, where 70 per cent of individuals said that if auto-enrolled, they would stay in.
Trends will be important as we move to smaller employers, but 70 per cent remaining in would surely be a sign of success.
In the same world we still need to get a definitive solution on what to do with small pots, and whether the removal of contribution and transfer restrictions on Nest would assist.
In a parallel pension world, the Budget in March 2012 was awaited with anticipation as there were strong rumours of a possible change to pension tax relief and even to the tax-free lump sum that pension scheme members have relied on for so long.
Well as I write this we have just had the Chancellor’s Autumn Statement and guess what – more changes.