7 January 2010

Rt Hon Yvette Cooper MP

Secretary of State for Work and Pensions

Launch of National Employment Savings Trust (NEST)

Thursday 7 January 2010

[Check against delivery]

I want to say a big thank you to you all for being here today for this launch – and especially to Jeannie (Chair) who has been with us from the Pensions Commission all the way to Personal Accounts – that's quite a journey through a number of years, two Pensions Acts, and a hard fought consensus. Thanks also to Tim (Chief Executive) and everyone at the Personal Accounts Delivery Authority (PADA) – it is great to see the progress you have made.

It’s a great pleasure for me and for Angela to be here for the launch of the brand and to have the chance not just to thank people for their hard work, but to say quite how important we believe these reforms to be.

Because we shouldn’t underestimate this.

These reforms will deliver the biggest changes to pensions in Britain for a century.

The number of people living to 100 is set to double in the next decade alone. For some people that means living more years in retirement than they spent in paid work.

We need a pensions system that can keep up – that helps people make the provision they need during their working lives for a prosperous retirement in future. And we need to tackle the unfair inequalities that kept too many people’s pensions falling behind.

Already we are making major changes to the state pension. An extra 40,000 women who reach State Pension Age will get a full Basic State Pension. And up to a million more people will start to build up State Second Pension for the first time – 90 per cent of them women, discriminated against by the old system because of the time they spent caring for their families.

The State Pension will always be the foundation of the pension system in the UK and through Pension Credit we are also supporting the poorest pensioners.

But as we all know we need to do more to help more working people build up the kind of pension they want for retirement.    

At present around 7 million people are not saving enough for their retirement. Yet for many people, enjoying the kind of retirement they have in mind depends on them saving more right now.

And despite our long history of occupational pensions in this country, at present, 14 million of our private sector workers do not currently receive a pension contribution from their employer.

Our reforms will make pensions support a right for working people.

This is a major reform to support for working people on the scale of the minimum wage reforms of the late 1990’s.

That is why we are introducing landmark reforms to workplace pension saving, on a scale unprecedented anywhere in the world.

And that is why auto enrolment and the introduction of a simple, low-cost pension scheme is so important. We are introducing mandatory employer contributions for the first time alongside government tax relief to make it worthwhile for people to save. And we are setting up a pension scheme to make sure those on moderate to low incomes missed out by the market have a low cost way to save.  

These reforms will see up to 9 million people saving for the first time, or saving more, in an occupational pension

Today PADA is setting out the new brand. Angela will be laying the next set of regulations imminently

You will know that we have announced changes to the roll out as part of the Pre-Budget Report. New business start ups and the very smallest businesses will now be enrolled at the very end of the process – giving them more time to adjust, but also helping ensure it is affordable for the taxpayer over the first five years at a time when we are bringing the deficit down.

But we have also made clear workplace pension reforms are so important that we need to keep up the progress, to ensure we are on track to start in 2012.

So that is why it is so important – and why we are so committed to keeping up the progress to deliver the workplace pension reforms starting in 2012 as well as the other pension reforms.

These reforms are founded on a hard won consensus of support – I want to thank the many stakeholders, organisations and groups involved in building this consensus and helping to make this happen. And I hope we can agree it’s vital we maintain that consensus. It matters to too many generations.

The significance of what we are all working hard to achieve with these reforms really cannot be stressed enough.

Thank you and good luck with the next step.