Blackford: Pension commission could restore consumer trust

Does the Pensions Regulator need to be beefed up?

Yes, I think the most important thing across the whole pensions landscape is that we inspire as much trust as we can in pension saving. The protection of savers has to be the thing that has to be uppermost in our mind. Anything that can be done to help do that I would fully support.

I would still like to take this away from the political theatre. I would perhaps describe a lot of the legislation which has been passed during the past few years as piecemeal, despite a lot of it being absolutely necessary. I have continued to press for the establishment of a pensions and savings commission that can look at all of these things, a continuation of what we had under Adair Turner.

Should flexibility be introduced to defined benefit to help struggling employers?

I think we have to be careful of the unintended consequences. There are some real fears out there about the sustainability of DB pension schemes, but I would not necessarily be of the opinion that DB schemes are of the past.

We all know the erosion of their pots when fees are high is quite significant

There are huge questions about how we look at valuation methodology, which I do not think were fully addressed in the government’s green paper. We have got to have an honest debate about where we are in terms of the funding of those schemes and what people can look forward to.

What role does transparency have in building trust in pensions?

In an environment where investment returns may be modest going forward, fee charging is going to become an important issue. What the Financial Conduct Authority has done is a welcome start to that process, and more work needs to be done on that. Value for money is a concept that has got to be grasped.

Would you impose a duty of care on asset managers?

What I would simply say to them is, there is a real risk to their business plan from the growth of passive fund management. It is in their own interest to make it absolutely crystal clear what they are offering. At the end of the day we are talking about pensioner savings, and we all know the erosion of their pots when fees are high is quite significant.

How can auto-enrolment be improved?

We have to look at the threshold and those with multiple part-time jobs, which particularly affects women.

We also have to find a way to bring in the self-employed, and perhaps reforming pensions tax relief could make auto-enrolment more dynamic.

We all recognise that the contributions have to increase if auto-enrolment is to become meaningful, but that has to be done over a longer period of time. It is about taking the consumer with us on that journey.

The concern I do have is that people end up investing into a Lisa when a pension would be much more suitable

Obviously there is going to be a review of auto-enrolment this year, and I am very happy for the SNP to play its part in that.

How would you ensure better pension adequacy?

That comes back to how we look at pensions tax relief. We need incentives from government that would encourage people to save, rather than what I might term the gimmicks that have come from government, particularly things like the lifetime Isa. The focus has to be on pension saving.

Would you scrap the Lisa?

I opposed it when it came through, but one of the things we have to have is consistency. Now that it is here I am grateful the FCA has been given enhanced authority to make sure that there is not, to put it bluntly, mis-selling of Lisas.

The concern I do have is that people end up investing into a Lisa when a pension would be much more suitable. I was appalled that government did this, but it has gone through, so let’s now wait and see.

Will the SNP pledge to preserve the exempt-exempt-taxed system?

Yes. I still think that is by far and away the most appropriate pensions landscape we can have. Creating incentives when people are saving and taxing people on their income when they receive it, is to me the most logical way of approaching this.