Women – As well as having barely half the pension savings of men, women also receive a far smaller state pension. Women receive 13% (£1,092) a year less than the average state pension and 25% (£2,548) a year less than men get from their state pensions. Carers – Carers typically have just £5,800 in savings in defined contribution schemes – 44.8% below average. And carers have only £6,000 amassed in defined benefit schemes – a massive 86.2% below average. BME workers – An Indian worker typically has less than half (£22,100) the defined benefit pension savings of a white worker (£45,500). Black pensioners receive 16% (£1,404) less than the average for all pensioners and 20% (£1,820) less than white pensioners in State Pension. Self-employed – Self-employed workers typically have 4.8% less in defined contribution savings and 12.7% in defined benefit savings than average pensioners.
The Under-pensioned 2016 report says reasons for the disparities include workplace discrimination, job segregation and the lack of flexible working.
The report warns that despite recent changes to state and workplace pensions, these stark divisions will remain unless the government takes further action. It states that workers from underpensioned groups are less likely to be eligible for auto-enrolment into workplace pensions than the wider population, typically because their wages are too low. It explores the potential impact on underpensioned individuals of lowering the £10,000 earnings trigger for auto- enrolment, increasing contribution rates and dropping the system of banding that restricts the income on which pension contributions are based.
The TUC believes that these are key policies that the government should consider when it comes to review auto- enrolment in 2017.
TUC General Secretary Frances O’Grady said: “We urgently need a debate on how unions, government and employers can work together to can build on the success of auto-enrolment. And we mustn’t shy away from looking at the underlying problems in our labour market that are driving these inequalities in pension saving.”
Government to replace MAS, TPAS and Pension Wise 21 March 2016
Within the Budget 2016 announcements was the news that the Government is consulting on a restructure of the statutory guidance providers Money Advice Service (MAS), The Pensions Advisory Service (TPAS) and Pension Wise in order to ensure that consumers can access the help they may need to make effective financial decisions. In October 2015, the government launched the Public Financial Guidance consultation to seek views on how publicly funded pensions guidance, debt advice and money guidance (including financial capability) could best be structured to help consumers make effective decisions. In parallel, the government and the FCA launched the Financial Advice Market Review to look at making financial advice more affordable and accessible for consumers.
The two reviews have a shared objective of ensuring that all consumers can access the help they need to make effective financial decisions.
Free-to-client financial guidance is currently provided by three publicly funded bodies - The Money Advice Service (MAS), The Pensions Advisory Service (TPAS) and Pension Wise. Financial guidance is also widely provided by the third sector and the industry. At the moment there are both gaps in the guidance available to consumers and duplication of content within MAS, TPAS and Pension Wise, which is confusing for consumers. The three publicly funded bodies have independent strategies and business plans and there is no requirement for them to consult the other publicly funded bodies in developing guidance. The government therefore plans to restructure the delivery of public financial guidance to ensure that consumers can access the help they need to make effective financial decisions. The new delivery model will complement existing market provision, and provide targeted support where it is most needed, including through a comprehensive pensions guidance service. It has been designed to ensure that as much funding as possible can be directed straight to the front line.
The new delivery model will replace the Money Advice Service, and merge the functions of TPAS and Pension Wise. The new delivery model is made up of:
CIPP Policy News Journal
25/04/2016, Page 386 of 453
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