Speaking this morning at the Resolution Foundation’s retirement debate, Webb said in order to get pensions right it was crucial to think more broadly about factors that shape retirement income.
He criticised the way that government tended to “silo-ise” and focus on policies rather than seeing people, saying this was part of the reason why there was no integrated product for care and pensions.
“What I would like is for the government to see people and their later life in retirement and care needs, the impact of social change and the labour market, holistically in one place,” he said.
Webb would like to see one department for both pensions and the ageing society but admitted the current government had tried and failed to find a way to overcome the silos.
Where he has tried to float the idea of such a department dealing with the Treasury aspects impacting pensions, it has become clear the Treasury “will never let go of tax relief”, however.
He believes that joint ministers could be the answer to the problem.
“At the moment we have ministers that do energy and business, or in education and cabinet office, so I see no reason why people in the ministries for pensions and ageing society could not have a foot in the Treasury to provide that bridge.”
This would enable government to consider factors that affect pensions, such as life expectancy, occupation, career path, marital status and tax relief, holistically, he said.
It would also help to see how the labour market affected what happened in retirement, and also to look at the impact of social change, the minister explained.
“Your pensions outcome depends on everything that happens in your life,” Webb said.
One example of where a more integrated approach would help is divorce, which Webb called an “elephant in the room”.
He explained: “I worry that in a world where the state pension only gets you to a basic minimum and where quality of retirement means something else, we haven’t quite worked out how that works in a world where we can’t assume that people have a partner to rely on all the way through even if they have a partner when working.”
Webb said while in theory divorcees have options such as pension splitting and pension credits, “in reality I don’t think it works terribly well”.
