B&CE Benefit Schemes has been in close communication with the DWP over many months now about the challenges that means-tested benefits create when trying to encourage those on lower incomes to save for their retirement.
As things stand, people on mid to lower incomes have an easy excuse they can make to themselves when deciding whether or not to save towards their retirement. The fact that many people will not receive the full benefit of their savings because they may lose eligibility to means tested state benefits puts many people in this target group off the idea of saving.
B&CE is in a better position than most to comment on this given it runs - on a not-for-profit basis - the largest stakeholder pension scheme in the UK for nearly 500,000 members of the construction industry.
Rather than just highlighting problems, B&CE has been very keen to bring potential solutions to the table. Late last year it sponsored the Pensions Policy Institute (PPI) to carry out an investigation to see how effective creating a 'Pension Income Disregard' would be in reducing the means testing hurdle.
This proposal has gained widespread support and while in no way the only option that the DWP will now consider, it will certainly be one of the front runners.
The Government has confirmed publicly its plans to investigate means testing issue and to explore potential solutions. This acknowledgement and commitment to taking it seriously is exactly what we hoped our lobbying would achieve.
An ambitious objective
'Something completely new'
'Illusion of control'
Reasons to be cheerful
Total investment reaches £9m