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Webb floats ‘money-back guarantee’ for workplace pensions

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Webb floats ‘money-back guarantee’ for workplace pensions

Pensions minister Steve Webb has suggested a money-back guarantee could help reinvigorate workplace pensions saving.

Speaking at the Liberal Democrat conference, Webb said providing capital guarantees could help re-engage workers with pension saving.

'A money-back guarantee, protecting capital to provide greater certainty, that is something else I am keen to work on,’ he said.

Webb said he had had 'chilling' conversations with employers who say they will scrap their high quality pensions provision because workers are not interested in them. He said he had a number of 'wacky ideas' on how to improve workplace pensions engagement.

'Why would employers spend money on decent pension provision when it’s not engaged with? How do we solve that conundrum? Employers must be able to recognise a good quality scheme and then be able to communicate that,’ he said.

'I have some wacky ideas about how to reinvigorate workplace pensions provision and I will put some of these forward at a later date.'

However Standard Life chief executive David Nish warned a capital guarantee would be expensive and urged Webb to consider linking workplace pensions to infrastructure investment instead.

'The money back guarantee is a great concept, but capital would be required, and how does that feed in to other parts of the pensions system? We need to talk about infrastructure funding. We could get a beautiful. attachment between employer savings and infrastructure investment. You would think they could be aligned but the government is running scared'

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