Industry bodies back call for creation of independent body to oversee UK pension policy

Fewer than one in three savers think recent pension policy changes have made them feel more confident about the future of their savings, and more than half now feel more uncertain about their financial prospects in retirement, according to consumer research conducted by the National Association of Pension Funds (NAPF) as part of the report. The report, which has the backing of the Association of British Insurers (ABI) and Trade Unions Congress (TUC), calls for the creation of a 'standing independent retirement savings commission' to restore confidence in pension policy.

NAPF chief executive Joanne Segars said that there was a "very real discrepancy" between the increased number of people saving towards a pension as a result of automatic enrolment, and how confident those people felt about their saving.

"We believe this is a result of pensions policy driven by short-term priorities and political expediency creating a feeling of uncertainty among many employers that contribute to pensions, and the savers that rely on them," she said.

"Support for a standing commission stretches well beyond the people who work in pensions to the everyday savers who will rely on their pensions for a decent income in retirement. The idea of such a commission is not a new one but it has yet to become a reality – our report shows there is a growing chorus for that to change, and soon," she said.

The body envisaged by the authors of the report would consider not just pension saving but the wider issues affecting retirement, such as health, housing and living standards. It would be set up as one of the first actions of the incoming government. Membership would consist of a small group of commissioners with expertise in issues affecting savers, employers, the industry and the wider economy, and its work would consist of detailed research and analysis and providing annual reports and recommendations to government.

The work undertaken by the new commission would build on that of the previous Pensions Commission, established in 2002 to review private pensions and long-term savings. The final recommendations of that commission, which was led by former FSA chair Adair Turner, included a number of policy recommendations that have been implemented over the past five years including raising the state pension age, automatically enrolling private sector workers into occupational pension schemes and encouraging people to work longer.

The NAPF said that some other recent changes to pensions had been "driven by short-term priorities and political expediency". Its research found 84% support for the creation of an independent commission, and 85% support both for it to be politically neutral, and for its recommendations to government to be impartial. The findings of the research underline calls for the creation of an independent body made recently by the Work and Pensions select committee of MPs, and the UK's International Longevity Centre (ILC-UK).

"Despite how far we have come, there is further to go and issues that still need to be addressed," the report said. "These include agreeing what a 'good' retirement outcome looks like, how to ensure people are saving enough to reach it, the best way to balance the interests of savers and taxpayers in the system of tax relief, how future demographic and longevity trends will affect the level of state pension and the age at which it is paid."

"None of these questions have easy answers, but it is vital we get the answers right or we risk undermining – or worse, even undoing – the welcome and significant progress we have made so far," the report said.

"Whatever you think of the previous government's policies, most people in the pensions industry agree we need better long-term planning," said pensions expert Mark Baker of Pinsent Masons, the law firm behind Out-Law.com. "That's especially important now as auto-enrolment is still bedding down along with the April 2015 reforms."

"There's remarkably little variation between the pensions proposals in the parties' election manifestos, so that supports the idea that it should be possible to lift pensions policy at least partly out of the political arena. The proposal for a commission is ambitious, and one of the challenges will be defining its remit. But the NAPF's document is a powerful statement in its favour," he said.