The long time campaigner-turned Minister, who only took up her role just over a year ago, has exited, blaming short-term political considerations for getting in the way of her work.
In her resignation letter to new Prime Minister Theresa May, she called for a radical overhaul of incentives in the pensions system.
She wrote: “As an economist and investment professional who has been involved in all aspects of pensions for nearly 40 years, I am at heart a policy expert, rather than a politician.
“I have spent my entire career trying to help as many people as possible enjoy better later life incomes, encouraging consumer protection and social justice. As a Minister, I have tried to drive positive long-term changes on pensions from within Government and ameliorate some of the past mistakes, which I have cautioned against.
“Unfortunately over the past year, short-term political considerations, exacerbated by the EU referendum, have inhibited good policy-making. As the country heads into uncharted waters, I would urge you and your new team to enable my successor to address some of the major policy reforms that are needed to improve pensions for the future.”
Baroness Altmann offered help to her successor, Richard Harrington, who will not have exactly the same title. Penny Mordaunt and Damian Hinds have been announced as Ministers of State at the Department for Work and Pensions.
Despite her resignation, Baroness Altmann also praised Mrs May, saying: “I am so delighted that our country will have the benefit of your wisdom, good sense and experience.”
Good luck to all the new team https://t.co/mm7In0tYFv
— Ros Altmann (@rosaltmann) July 17, 2016
.@Richard4Watford has been appointed as Parliamentary Under-Secretary for Pensions
— DWP Press Office (@dwppressoffice) July 18, 2016
Baroness Altmann made three major policy calls in her letter. These are shown in full below:
A ‘one-nation’ pension - long overdue reform of pension tax relief:
Our present ineffective and complex incentive structure for pension saving costs over £40billion a year. It favours the highest earners disproportionately, while leaving lower earners seriously disadvantaged. We need a radical overhaul of incentives, which can offer more generous help than basic rate tax relief, but as a straightforward Government pension contribution for all, and would end the discrimination against Britain’s lowest earners who are forced to pay at least 20 per cent more for their pension than higher paid workers. This ‘one nation’ pension would see withdrawals taxed in later life, so that people have a behavioural incentive not to spend the money too soon.
A major review of Defined Benefit pension scheme funding and affordability:
We must urgently assess the future of our Defined Benefit pension schemes. Given the risks of diverting corporate resources to one favoured group of workers, the need to ensure adequate resources for younger generations’ pensions, the time is right to properly consider the issues facing employers trying to support Defined Benefit pension schemes and potential use of pension assets to boost economic growth.
Fair treatment for women and better communication on State Pensions:
On the issue of women’s state pension age, whilst I respect the democratic decision taken in 2011 by our Parliament, I am not convinced the Government adequately addressed the hardship facing women who have had their state pension age increased at relatively short notice. They were not adequately informed. I also believe we must devote resource to widely communicating and publicising the coming changes to state pension age for both men and women.