Various consumer groups in the UK have recently voiced their concern about the government’s decision to consider the pensions consolidation scheme where the pension pot follows the worker around.
The consumer groups, Age UK, Which? and TUC have all issued statements that they are concerned about the plan means that people might have their pension schemes transferred into a lower quality one, which actually means that people are worse off in old age. The groups also highlighted the practicality problems about transferring a pension, and that job transfer is not always as clean cut as the government seem to be implying.
Steve Webb, the pensions minister, recently backed the idea that a pension should follow a worker, whichever job they go to throughout their career. This is not something that has been fully endorsed by the government yet, and there have been concerns recently because the response to the idea has been very negative.
The executive director of Which? is Richard Lloyd, and he is recently commented, “The most important thing that people do throughout their career is save for retirement. It is very important that every penny that they put towards their pension really counts, and government policy really needs to reflect this, so that people can retire comfortably.
We are pretty disappointed by the decision by the government to consider this scheme, as it will generally end up in people being worse off. The detrimental effect this could have on pensions would be very negative for some people.”