Experts suggest 'full-scale compulsion' if NEST fails

The government has yet to develop a grand vision for pensions and should be prepared to resort to compulsion if auto-enrolment fails, experts say.

Speaking at a panel discussion at the Professional Pensions Show, Barnett Waddingham consultant Malcolm McLean said the government must make contingency plans in case auto-enrolment fails.

"The next step is full-scale compulsion, which is not that radical," said McLean, pictured.

"We already have a form of compulsion in National Insurance contributions."

McLean predicted full-scale compulsion could be in place within five years if auto-enrolment does not deliver as expected.

Barnett Waddingham senior partner Adrian Waddingham said progress on pension reform has been "infuriatingly slow".

"The [pensions] minister said the department will revisit risk sharing, but six years after the Turner report, I am disappointed we have not got something in this area yet," he said.

Waddingham called for more imaginative approaches to defined contribution (DC) pensions.

"One argument is the state could pick up the longevity risk with annuities being for a fixed term of say, 15 years after which the state steps in," he suggested.