Pensions Commission II: “Good people, but with one hand tied behind their back”
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The people who will lead the new Pensions Commission announced today by the government are highly respected and knowledgeable and will do a good job, but their restricted remit will limit their ability to deal with the scale of the problem, according to LCP partner and former pensions minister, Steve Webb.
The scale of the problem is indicated by separate figures published today by DWP which show that in *just two years* the number of people estimated by the government as not saving enough for their retirement has gone up by two million from 12.5 million in the 2023 report to 14.6 million in the 2025 report published this morning.
Although the Commission will be able to look at a wide range of issues, including the idea of having a cash ‘sidecar’ attached to the pension, the Secretary of State confirmed at the launch event that the ‘triple lock’ policy on the state pension and the taxation of pensions were not in scope of the review. According to Steve Webb, this will make it very hard for the Commissioners to map out a blueprint for the future of pensions when key policy levers are off limits.
Steve Webb said:
“The Government has chosen its commissioners well. These are excellent, respected and knowledgeable people who will no doubt do a first rate job. But they have had one hand tied behind their back from the outset. Central to any plans for the future of retirement incomes is a view on how the state pension will contribute, yet they have been told they are not to comment on the future indexation of the state pension and the triple lock policy in particular. Another key lever available to government is to use pension tax relief to incentivise pension saving and to do more to support under-pensioned groups. But despite having a Pensions Minister who is also in the Treasury, this review is not being asked to look at pension tax relief. On a day when the Government admitted that the number of people under-saving for retirement has soared by two million in just two years, the need for a comprehensive review has never been greater. The tight remit of this review represents a missed opportunity”
