Why our hard-working pensioners-to-be deserve financial security in retirement

    Dr Ros Altmann

    Pensions minister Dr Ros Altmann is a woman on a mission to help people prepare for a longer, healthier retirement. Writing exclusively for the Times, she sets out her vision for pension reforms…

    Pensions are vitally important, and as Minister for Pensions I’m on a mission to ensure that everyone can make the most of theirs. As our population ages, it is more important than ever to help working people in Tunbridge Wells and beyond plan and prepare for their retirement, while at the same time protecting today’s older citizens.

    This government is in the process of delivering the biggest pensions reforms for decades and I believe that they will help us all work towards a more financially secure retirement.

    One major area of change has been the state pension. We will be replacing a system fraught with inconsistency and complexity with one that, over time, will make saving for retirement much easier to understand. From April 2016, we will have a brand new system that will help people prepare for their retirement and know well in advance what they can expect to receive from the state.

    One aspect of the system that will not change is the basic concept of a contributory state Pension and, just as under the current system, receipt of the new State Pension will be based on National Insurance contributions.

    Those who have taken time out of work to raise children or care for relatives can receive national insurance credits so they do not lose out, and we are strengthening these credits. We will ensure that women are not penalised for having children, and they are not expected to rely on their husband’s pension when it comes to retirement. This is absolutely essential in a 21st century state pension system.

    All in all, the new state pension is good for women and the self-employed as well as other groups that have historically not done so well. In the first 10 years after implementation, some 650,000 women are expected to receive on average £8 a week more, as we revise the way their national insurance contributions are calculated and the majority of people reaching state pension age will receive more in the new system that they would have had in the current one.

    While we can reform the state pension system for the future, we can’t change the past. There are millions of people already retired – or who reach state pension age before April – who will continue to be served by the outgoing system. We are also helping to give these people the best chance of a comfortable later life.

    One part of that is the ‘triple lock’, whereby the basic state pension is increased by at least 2.5 per cent each year.

    But we also recognise that people in certain circumstances might benefit from the chance to pay to increase their state pension further. So to help those who continue to receive their pension under the old rules, we have launched a new state pension top up scheme.

    This will allow those eligible to secure up to £25 a week additional state pension in return for extra national insurance contributions. The scheme will be open for the next 17 months and I would encourage Times readers who think that they might benefit to find out more at www.gov.uk/state-pension-topup.

    While reform of the state pension and initiatives like state pension top-up are important, these alone are not enough to ensure everyone will have the retirement they want.

    A decent state pension safety net must be complemented by a private pension system that makes it cheaper and easier to save.

    That is why in 2012 we began implementing automatic enrolment into workplace pensions, designed to make pension saving the default. Already 5.3m people have been automatically enrolled and by the time the process is complete in 2018 more than nine million people will be saving, many for the first time.

    The next phase of the scheme will be helping the 1.8m smaller employers in the UK enrol their staff.

    Times readers might be familiar with our new promotion campaign. Adverts featuring the new ‘Workie’ pensions character and his message not to ignore the work place pension were running across the big screens at the Royal Victoria Place shopping centre in the town centre earlier last month. This bold new campaign is certainly having an impact and you also might spot ‘Workie’ on local buses and in TV ad breaks.

    Automatic enrolment is about changing attitudes to retirement savings. While the State Pension can provide a base level of income for retirement – and a much more decent one than ever before thanks to the many above-inflation up-ratings made since 2010 – most people wanting to maintain their living standards into old age will need to have their own private provision as well.

    Of course, when people turn 55, they now have the freedom to choose how to use their savings.

    They are no longer forced to buy an annuity, as they were in the past, which should help to make private pensions more attractive.

    A priority now for me is to make sure that those people who want to take advantage of the new freedoms do not find themselves blocked by excessive charges and have as much choice as possible with what to do with their savings.

    We have set up a free and impartial service to guide you through any decisions about your pension. For more information go to www.pensionwise.gov.uk

    What we have seen in the past few years is nothing short of a pensions revolution. These reforms will provide more certainty and security in retirement for millions of hard working people in a way that is sustainable for future generations.


    Rosalind Miriam Altmann, Baroness Altmann CBE, was born in 1956 and is recognised as a leading expert and campaigner on UK pensions. She was appointed to the House of Lords after the 2015 general election.

    Baroness Altmann previously led a campaign on behalf of 150,000 workers and their families whose company pensions disappeared when their employer’s final salary scheme failed.

    Having been assured their pensions were safe and protected by law, these workers from companies such as Allied Steel and Wire faced losing their entire savings and her work contributed to establishing the Pension Protection Fund and the Financial Assistance Scheme.

    Baroness Altmann has also supported the campaign for people whose pensions were placed in peril by Equitable Life.

    In 2009, she campaigned against the sudden, short notice increases in women’s state pension age, achieving success in reducing the planned rises, and was instrumental in highlighting the injustices of the annuities market, which resulted in a government reversal in policy.

    Blessed with a formidable intellect and an endless capacity for hard work, Baroness Altmann has also been involved in economic analysis and most recently in highlighting the inadequacies of the social care system.

    She is instantly recognisable from her appearances on television as a pensions’ champion and has spoken both nationally and internationally on policy, retirement and investment issues.

    Baroness Altmann, who is married with three children, was appointed as director general of the over-50s provider the Kent-based Saga Group in October 2010 where she stayed until February 2013.

    In 2011 her work as a commentator on pensions was recognised with the Public Affairs Achiever of the Year award.