What does 'pot for life' mean and how far it should go?
Chancellor Jeremy Hunt (pictured) prepares for the Autumn Statement. Photo: HM Treasury
Yesterday the FT reportedthat Chancellor Jeremy Hunt would use his Autumn Statement today (22 November) to unveil «pot for life» reforms, giving workers the right to nominate the pension scheme their employers pay contributions to — an approach similar to that taken by countries such as Australia.
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A Treasury insider told the FT: «Helping people keep the same pension pot will stop billions of pounds being needlessly lost and make sure tomorrow's pensioners benefit from every penny they save.»
Eversheds Sutherland partner Michael Jones said, if announced, the measures would be «ground-breaking» and «signal a shift from employer choice to member choice in the UK pensions system».
He said: «By giving savers the choice of where their employer's pension contributions are directed, the government hopes to raise engagement in and awareness of pensions, reduce the creation of a new small pots every time an individual changes jobs and for individuals to take ownership of their pension savings and wider financial planning.»
Jones added, however, there was much to do before pot for life becomes a reality — noting that cross-party support was essential if these measures were to succeed.
He said: «A call for evidence is the first step and we expect this to ask the question: ‘What does pot for life mean and how far it should go?'
»Giving savers a simple choice is much easier to achieve than a true Australian-style pot for life system where savers are automatically ‘stapled' to their current pension provider on changing jobs, and which likely requires a clearing house and
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