The government has also confirmed that it intends to proceed with the multiple default consolidator model, whereby existing small pension pots (probably those under £1,000), will be swept up between a small number of large pension schemes.
Exactly how this will work is still to be determined, but it seems likely it will depend upon much of the architecture planned for the pensions dashboard.
The very fact that the dashboard development is running behind schedule perhaps points to the complexity of this build, so it would be sensible to ensure the two things are considered in unison.
The complementary piece to this is the proposal that employees will be able to choose their own pension scheme – the so-called ‘pot for life’ idea.
While this sounds popular, it is not entirely clear what the benefits are for anyone other than those who are already savvy enough to make their own pension investment choices and feel they need more.
And it is also unclear why the more intuitive ‘pot follows member’ proposal was dropped, but the consultation is deemed to be a genuinely open one, so perhaps we have not seen the last of that yet.
It remains to be seen whether all of this will drive greater investment from pensions in the UK economy, and of course better outcomes for members.
In the absence of a pensions bill, it seems likely that 2024 will be a year of debate rather than implementation.
Arguably, the most successful policy intervention in the world of pensions was auto-enrolment. This thrived on political consensus. Whatever we do next, let’s hope it benefits from that same hallmark.
Jamie Jenkins is director of policy at Royal London
