Pensions secretary resignation leaves savings policy ‘vacuum’

By Justin Cash

Nov 23, 2018

Pensions experts have expressed concerns over the future of long-term policy making as work and pensions secretary Esther McVey steps down from her position.

McVey tendered her resignation letter this morning, claiming that the government’s draft Brexit deal would not respect the referendum result and was not something that she could vote for.

Quilter head of retirement policy Jon Greer say Brexit’s impact on sensible policy-making has been to leave a “vacuum” at Westminster, particularly when creating plans for areas like pensions.

“Esther McVey’s departure after just 10 months in her position is unsettling, particular since she evidences the lack of faith in Theresa May’s leadership. Who will replace her and how long they will last is anyone’s guess, particularly given the growing risk of a no-confidence vote.

“Leadership at the Department for Work and Pensions has been about as stable as a mobile home in a hurricane as a parade of ministers have picked up the baton only to fling it away. Setting retirement policy and ensuring we have a well-functioning state pension system is a long-term project which is put at risk if the minister responsible for the DWP changes from one year to the next.

“Those planning ahead for their retirement need certainty and stability when it comes to government policy so that they can make informed financial planning choices. There are some big ticket issues that cannot be ignored for much longer, such as the future of the state-pension, gaps in auto-enrolment and the pension dashboard among many others. However, it seems all this will continue to be on the backburner as Brexit sits center stage at Westminster.”

Royal London director of policy Steve Webb, a former pensions minister, says that McVey’s position, which includes the wider remit of employment across the UK, is less important in reality the more junior role of pensions minister and civil servants within the Treasury though.

“Whoever succeeds Esther McVey at the DWP will have a lot to do as they continue work on Universal Credit and disability benefits. As a result, they will have little time to shape pensions policy. With this in mind the key people shaping pensions policy will remain Treasury and the DWP’s pension minister.”

The position of shadow pensions minister within the Labour party has also seen a revolving door in recent years. The position has been held by Jack Dromey since January, after MP Alex Cunningham stepped down.

Cunningham was in the position for just over a year, taking over from Angela Rayner, who herself was Labour’s fourth shadow pensions minister in under a year.

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