The Spring Budget gives ‘pot for life’ a definite, 100 per cent, without a doubt, one day, maybe, green and red light.
I love the Budget. I am aware this will come across as sad to some, however I truly do.
I clear my diary, I get food and drink ready and sit down as if I am about to watch a major sporting event or a film. To me, it is ‘an event’.
But this year’s Spring Budget left me feeling a little flat in every way.
The jeers felt disproportionate, some of the jibes felt a bit icky (the "lose a few pounds" comment springs to mind) and most of the ‘key’ announcements had been made ahead of time, so each time the speech felt it was leading to something big, it ended with all the sparkle of still water.
The biggest tease was the lead up to the national insurance cut.
The language and delivery felt like it was building to something monumental and then ‘ta-da’, it’s what you already know.
My main takeaway was it felt like a carefully constructed speech to acknowledge as many people and interests as possible without causing any upset.
This resulted in most of the noise being confined to either the Westminster bubble or the respective sector/industry.
This felt particularly true when it came to pensions.
There were references, nods and slight expansions to Mansion House reforms, value for money and pot for life.
To my mind, it largely matched the rest of the speech: careful and considered.
However, one little word has managed to cause quite the noise and difference of opinion within the pension world.
The word in question? ‘Explore’.
In the Budget speech document it states Hunt said: “We will continue to explore how savers could be allowed to take their pension pots with them when they change job.”
For some, this meant the government is proceeding with pot for life.
To others, this meant the government have decided to shelf the idea. I’m still trying to work out which is true: has pot for life just been given a green or red light?
What is the pot for life/ lifetime provider model?
Let me take a step back, or rather a few months back.
Pot for life was mentioned in the chancellor’s 2023 Autumn Statement when he said it would give a “legal right to require a new employer to pay pension contributions into their existing pension".
Employees would have the option of one pension pot following them whenever they change jobs.
This is in contrast to the commonly increasing scenario of people building up a collection of pension pots when changing employers.
Reaction across the industry was mixed.
Concerns were raised about the admin headache for employers having to deal with multiple pension schemes – in theory, as many as one scheme per employee.
