Pensions opt-outs to be re-enrolled every three years

There will be an ongoing process of automatic re-enrolment into personal accounts, pensions minister Angela Eagle says.

Speaking at a Social Market Foundation fringe meeting - Rethinking Pensions: A new settlement for a new economic era?, held in Brighton on Sunday - Eagle said people would be thrown back into the scheme every three years in order to make sure as many people as possible were saving for their retirement.

But she told IFAonline's sister publication, Professional Pensions, such a move was not the first step towards compulsion - saying "if parliament had wanted compulsion, parliament would have voted for compulsion".

The meeting - which was led by SMF chairman Lord Lipsey - also included Money Advice Trust chief executive Joanna Elson, Pensions Policy Institute chairman Matthew Annable and B&CE Benefit Schemes deputy chief executive John Jory, who said more radical pension reform proposals should to be considered.

He said these could include standardising the rate of pensions tax relief to 30%; taking pensions away from politics and introducing an independent pensions commission; and introducing compulsion.

He said another reform to consider was increasing the state pension age to 75 or 80 and making the state pension significantly higher - perhaps linked to income in the three years before the state retirement age.

Jory said such a reform would mean there was no need for openended annuities - as they would only have to provide an income until the state pension kicked-in.

Annable said he was concerned about whether large number of members would opt out of personal accounts, and Elson explained money guidance would be crucial to the success of the new system.