Pensions Minister and Poor Bereavement Service

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Grief is the price we pay for love. So why are relatives who are suffering from grief met with such indifference by many financial firms? Weeks and weeks and weeks of phone calls, of stress. They need to be efficient, they need to be kind, and to be frank, they weren't either. Banks have been told by their regulator to improve the way they deal with bereaved people.

And save a pound, get a 50 pence boost. A government scheme which helps low-paid people save has been extended to a half a million more.

But first, in an exclusive interview with this programme, the Pensions Minister, Torsten Bell, tells me pension schemes should be moving more of members' money out of shares and into infrastructure projects where, he says, returns are higher.

And to encourage that process, he announced a new plan to bring millions of small pension pots together into one multi-billion pound so-called consolidator scheme. That, he said, would be a high return... good value for money pension scheme invested in what he called productive assets like infrastructure rather than in shares.

The consolidation plans will absorb all pension pots under £1,000 in value that people have built up as they go from job to job, instead of leaving them as individual pots with each employer. He also made clear the scheme which was announced this week will not actually happen for some years. But Torsten Bell started our conversation on a positive note. Well, partly we should remember here there's some good news, which is... far more people at last are saving for their

Retirement, that's one of the big bits of progress over the last 20 years. I want to celebrate that before I come on to some of the problems with it. You know, we've now got 11 million people saving into their defined contribution pods. And that's a big improvement, particularly for low earners and women who were saving far too little.

and the 2000s and the early part of the 2010s. But that brings with it some challenges, which is lots of people now having lots of small pots as they move between employers and have different pots with different providers. And that has two challenges with it. One, it's expensive for the pension system. to run and we don't want any more costs in the system than we can because that ends up

on reducing the returns for savers, but also it's a hassle for people. So I want to reduce the hassle by bringing together people's smaller pension pots. And we're talking about pots here below 1000 pounds into one. pension scheme, a high return scheme, to make sure that it's easy for people to know where their pension pots are, but also to make sure they're getting good value for money from those savings. And how would it work in practice? I mean, you've sold that well and I won't go in.

to some of the questions I would ask you about that, but you've sold it well. But how will it work in practice? What will happen to this money? Which, in many cases, people don't even know about, do they? It's not people wanting to consolidate. They don't know this money's there.

Yeah, you're absolutely right, Paul. I mean, people in general, when I talk to savers, but also actually to people running their pension schemes, savers want to... have their their funds consolidated into one place being brought together but they don't know how to do it they're not even sure if they can do it so this is going to be automatic it will just happen for people unless they want to opt out so they'll be notified that there's going to be a consolidation of their smaller

pension pots into one high returns good value for money pension scheme and if they want to opt out of that of course they can but if they don't it will be done automatically for them so they know where that's those savings are where they're all consolidated together and they get better value for money

And just to be clear, who can opt out? Is it the individual or their employer? Absolutely. So the individual can absolutely, you know, if it's their pension savings, if they want to opt out, that's absolutely for them to do.

How will this consolidating fund protect people's money and keep their own individual entitlement clear? Yeah, that's really important. The only schemes that will be able to act as consolidators, people receiving these smaller pots and bringing them together, will be schemes. pension schemes that have been assessed as delivering really good returns for savers. We talk about interest rates in ISAs and bank accounts, but we need higher rates of returns for pension savers.

too. And that's exactly what we're going to do by making sure that these come together into pension pots that are delivering good rates of return, but also by getting rid of lots of small pots that maybe people are having to pay lots of flat fees on. we will deliver better rates of return because they're paying lower fees.

It's the real reason you're doing this, though, because, you know, these 13 million pots worth an estimated £4 billion, as I understand it, it's the real reason. You want them in one place so the Chancellor can then instruct the fund manager to invest the money in the UK economy.

No, absolutely not. The reason we're doing this is because we need to look further ahead. And as we've moved to a system where we've got people saving, it's all of our responsibilities, the government, but also the industries to make sure that we're delivering the best possible rates of return. And that's exactly what we're going to be doing.

But the Chancellor is doing that, isn't she? There was a report last week that the biggest pension companies have been asked to sign a voluntary code to buy British after pressure from the Treasury.

No, I think what you're referring to is discussions that are going on amongst the industry. And this is actually happening. This is a trend that's happening within the UK pensions industry long before I became the pensions minister, which is historically defined contribution schemes, which obviously the growing part of our...

in pensions industry to it heavily invested in equities but they haven't done as well historically as investing in productive assets the likes of infrastructure that we see other pension systems like Australia or Canada doing a much better job. of investing in and that's important because it gives better returns to savers but it also gives them a more diversified range of assets to invest in so i think all of us accept that it's a

better future if we see higher levels of investment in those kinds of productive assets. Yes, lots of those assets will be in the UK, which is the issue you're raising. But the underlying issue is how do we have a pension system? that is doing the best it possibly can for Sabres. I think that will also be better for the UK economy as a whole, which I think is part of the issue you're raising. But this is absolutely about getting the best returns we can for Sabres.

But people are cautious, aren't they? They don't want their pension money at risk. They want it invested safely for their retirement. They don't want it poured into HS2 or loss-making steel plants.

Yeah, in the end, it's always for individuals in choosing their pension schemes and how they invest, but also for those schemes themselves to make the decisions about the best investments for them. The government's not involved in any of that. But what I think we do need to do is to say the status quo.

isn't the best we can possibly do for savers. We need to have pension schemes that are bigger, delivering higher rates of return for their savers. And we also need to address some of these challenges in the system, like the proliferation of these small pots. Because you talked about 13 million pool and the 4 billion, but it's growing at a million.

every single year so we need to get ahead of that put in a system that consolidates these pots brings them together and makes the system cheaper for everybody but also as I say less hassle Isn't it more important, though, that there's something like 3 million lost pension pots that people aren't aware of? They're worth £30 billion. That's £10,000 each. Wouldn't it be more important to find those and make sure people know where those are?

than this relatively small amount of pots worth 300 quid. No, no, we've absolutely got to do both of those, Paul. We've got to do both. Are you doing the other one? Absolutely. That's what the pension dashboard system just reminds people. This is the system that will allow them to see.

all of their pension savings in one place to help them engage with them but also to plan for retirement in the round that's exactly what we are doing the pension dashboard work is now moving forward at pace we'll be bringing

um 20 providers will be testing their connections to that pension dashboard system you've talked about this again on your program in the past and so you're completely right we've definitely got to deal with the issue about people it being just too much hassle for people to know where all their pots of savings are. But we can't be saying, let's not deal with the small pots issue because we've also got to deal with this other issue. We've got to do both.

You say it's going at pace, which is always the thing ministers say when they don't quite know when it's going to happen. When will Moneybox listeners be able to log on to the pension dashboard and see all their pensions in one place? When? I can't tell you an exact date for that, but what I can say is that the deadline for making sure that we've got the first 21 providers.

is this autumn and we are on track to hit that so they're connecting to the dashboard and we'll also be coming forward with measures where people can start trialing some of the actual front end that you're talking about where people can see there where people can actually see you know start trialing the system so

You're completely right. This is a really important issue. It's not a ministerial thing. I'm just saying it does have to happen at pace because I think it is important. But we've also got to get it right. In the past, under the previous government, some of the approaches to try to rush this didn't work well.

going to give you a deadline that i'm not absolutely sure we can meet what i'm saying to you is my assessment is spending a lot of time looking at the issue is that we're on we're on track we're making a lot of progress on track for what though as i said give me some idea when people can look at their pensions never mind you know, big insurance companies.

joining it that no one's interested in that though of course it's got to happen when can i log on and look at my pensions well i think we're talking about a couple of years is when we'll be aiming for a couple of years so 2027 ish maybe and what about i think we'll be trialing the system before

that because we've got to get it right but yes i think those are the kind of deadlines when we'll see widespread use and what about the consolidation of these small parts when's that going to happen that will follow after the after the um

uh the pension dashboard because remember we also need to make sure that we've rolled out our value for money reforms for the system that means we're going to see a smaller number of larger pension schemes that will be delivering higher rates of return with these clear transparent value for money metrics because i don't want to be consolidating people's pension savings into schemes that aren't delivering the best possible returns. Pensions Minister Torsten Bell speaking to me earlier this week.

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The pain of grief is the price we pay for love. But the response of financial firms to grief-stricken customers is often indifference at best and obstruction at worst when they try to get hold of the money left them by their recently departed loved ones. Why are some financial firms so poor?

at dealing with people at one of the most traumatic times of their life? That was the question asked by the regulator, the Financial Conduct Authority, recently, and it's now set out guidance on how firms should treat customers at that time. Moneybox's Dan Whitworth. has been looking at this issue, Dan.

Well, we're talking about people here, Paul, like Mila Coombs and the experience she had after her husband Martin died in a hospice in January. Now, both in their 50s, Martin was an accountant his whole life. He knew the end was coming. And so, of course, as you might imagine,

Paul, he had all the paperwork in order for Mila to be able to access his 17-year pension from Fujitsu after he died. So, shortly after he passed, Mila called the Pensions Administrator. That's a multinational, multi-billion... power firm called WTW. Now, she expected WTW to carry out a fairly simple, quick process to pay her what she was owed, an initial lump sum and then ongoing monthly payments worth around about half the original pension.

Now, what Mila told me she actually got was three months of no money and no help. All the while, of course, she was dealing with having just lost Martin. Huge frustration at the weeks and weeks and weeks of phone calls, of stress. And also, I'm relatively young.

I have the wherewithal and the knowledge and the capability of ringing up and speaking to these people and chasing. But it can't only be me. There must be... hundreds and hundreds of other people that this is happening to who have no income nobody's talking to them nobody's dealing with them and it just seems they have one job they and they need to be efficient they need to be kind and To be frank, they weren't either.

Now, after we began investigating WTW, which again administers Martin's Fujitsu pension, well, it offered its sincere apologies to Mila. I should also say the lump sum payment was in Mila's account the next day and the future month. Now, WTW told us it recognised the process should have been handled differently in terms of the timings of the payments and its communications with Mila, adding it regrets it's fallen short this time.

Here's Mila again. It just seems riddled with inefficiencies. They probably wouldn't still have paid me my money had Moneybox not got involved. So how many people out there haven't got a money box, haven't thought about it, are just sitting waiting? And they don't seem to care. I've had a, oh, I'm really sorry. But actually, that doesn't cut it. I rang them so many times and told them there was no money. They have one job and they're not doing it properly.

And Dan, all this comes just a short time after the Financial Conduct Authority issued its own warnings about how to treat bereaved customers. Yeah, absolutely. So two weeks ago, the FCA put out a reminder to banks and building societies saying while some firms are, quote,

making a real difference with clear policies and procedures. Others have staff who are... unclear on the actions they need to take and how quickly they need to take them and then finally it warned it's really impacting people's ability to do even simple things like pay bills adding finally all firms should consider where they can make improvements on this issue.

Thanks, Dan. Well, with me in the London studio is Toby Porter. He's Chief Executive of Hospice UK, which represents more than 200 hospices and works with companies as well to help them with their bereavement policies. Toby Porter, is Mila's experience typical? It's a very bad example, but certainly, as the FCA have said, it's...

It's symptomatic of the fact that companies and businesses generally have a really patchy and inconsistent approach towards bereavement customer care. Yes, I mean, she said they should be efficient and kind, and they weren't either. From the outside, it doesn't seem that different.

to be efficient and kind. Why are they getting it wrong, some companies? Well, I think they have... WTW should be deeply ashamed and the fact that they landed her money in her account the day after you folks contacted them shows how... easy it was to have administered her the payment that she was due after the tragic loss of her husband martin and i think that this is just something that companies have a blind spot that when a customer dies they just think well that's it in many cases

Yes, I mean, the FCA says firms should make improvements. What should companies be doing specifically to deal with people better? Well, firstly, I think they need to be strategic about it. So, for example, in the next...

10 years down, a million more people will die in the UK than who've died over the past 10 years because of our aging population. So this is not a small... an emotive area this is a lot of customers the average person who dies has nine people affected by a bereavement so actually what what

banks and building societies and utility companies should realise is that bereavement care is a really important part of how they look after their customers generally. And I think they just need to... show a bit of empathy, show a bit of common sense, put themselves in the position of bereaved relatives, and we all suffer bereavements, and therefore there will be people in all of these firms and banks who... know what it's like to be bereaved and just

do better. Yes indeed. I mean the consumer duty which they're all subject to now says that you should in a sense put yourself in the shoes of your customer and treat them like you would want to be treated but from what we hear not all of them do that. You say this problem is going to get worse because more and more people are dying because of that post-war boom, people in their 70s and late 80s.

How big a problem is it, though? I mean, you know, you said and the FCA said many do it well, but some do it badly. So how big is this? Well, no, I think it is a big problem. I think the companies are very inconsistent. I think... You hear so many stories of where people get it wrong. I think what is clear is that when you're dealing with a bereaved person, you just...

You know, people, it's such a deep, personal, painful process that people are going through, that their tolerance to bad customer service, you know, being asked by... I saw someone sent me a screenshot recently of... customer service oh my mother's died and then the reply was oh I'm sorry to hear that is her move temporary or permanent I'm sorry to laugh it's just so appalling isn't it that you can't help That is the daftest thing to say. So...

People listening, and I have to say, emails are coming in as you've been speaking about this, most of them with bad stories. If people are struggling, it happens to them in future. Briefly, what should they do? Where can they go for help? Firstly, understand they have power and rights as consumers if they've been on the receiving end of really bad practice.

Ask for a subject access request. Get the phone call recordings provided to them or emails, transcripts. Use that. You have social media. You have complaint teams. I think everybody, you know, could be... Consumers have power in these situations. Toby Porter of Hospice UK, thanks.

Half a million more people will be eligible for a savings boost after the government extended a scheme which gives them 50 pence bonus for every pound saved. Help to Save allows working people on universal credit to save between one... and £50 a month. After two years, the government adds 50 pence for every pound that's been saved. Two years later, it does that again. Someone saving the maximum £2,400 over four years will get a £1,200 bonus.

from the government. The scheme was due to end this month, but it's been extended for two years and the qualifying conditions have been relaxed. People on Universal Credit can open an account now if they earn just one pound in the previous month. Before the change, they had to...

earn the equivalent of 16 hours at national living wage. Alex used help to save after a friend told her about it, and she used it to pay off a bounce-back loan that she took out when her business was disrupted by the coronavirus pandemic.

And he said to me, oh, do you know about this help to save scheme? And said, you should just do it because, you know, you can put in up to 50 quid and then you get another, you know, 50% on top of that. And I thought, well, I can use that to kind of pay off a bit of my bounce back when that comes to fruition.

what was it, four years' time. I mean, it's better than most savings rates. I know the savings rates last year were pretty good, but it is better than most. 50% is extraordinary. It was just a very simple scheme that really benefited me. Like I say, it just, yeah. Its timing of coming to fruition was actually perfect.

Well, listening to that in our Salford studio is Matthew Sheeran from Money Wellness. That's a free debt advice service partly funded by the government. Matthew Sheeran, over 62,000 people did open a Help to Save account in 2023-24. How does it work now? Yeah, so the Help to Save scheme is quite a simple process. So like you mentioned earlier, Paul, you can put anywhere between £1 and £50 a month into the scheme, and essentially HMRC will top that up by a further 50%.

now it allows you the flexibility to take money out at any point during those four years so if you do have that emergency where you really need the funds it is that access to you but for you to fully benefit from the scheme and the bonuses that it gives you

And, you know, the more money you can save and the higher you can build that part, the better. Yes. I mean, in a way, it sounds almost too good to be true and a brilliant scheme, as Alex was saying. But out of the 2.6 million people on universal credit who do work.

The take-up rate of $62,000 is about just over 2%, isn't it? Alex found it helpful. Why aren't more people taking it up? It's a low take-up rate, you're absolutely right. And I guess there's probably two main reasons. The first is that...

there's just maybe not enough awareness of the scheme. I think if you were to ask your viewers today and people listening, that most of them will never heard of the scheme. And that's one of the fundamental problems. We need to get the word out more. But in addition to that, a lot of people that are receiving universal credit, a lot of them... not in a position to save you know they are struggling to make ends meet so i think a lot of people that are eligible just don't have the funds to do it

No, I mean, that's the point people have made to me about it when they knew we were doing this item, that, you know, these people are, in many cases, in poverty. We often say how unsatisfactory universal credit is. You've got the two-child limit. You've got the benefits cap. Are most people on universal credit just without that even a pound a month to put into a savings scheme?

Definitely. The people that we provide debt advice to, many of them are on universal credit and money and working at the same time. And a lot of these people, when we do their income and expenditure, they've got more money coming out than what they've got coming in. That being said, though, Paul, for the people that...

do have that little bit left at the end of each month. It's an absolutely amazing opportunity to build that savings pot and have that financial resilience. Yeah, I mean, some people might be put off too because there's a limit of how much savings you can have and stay on universal credit, isn't there?

report by the Resolution Foundation saying that help to save is actually included in your capital and there is a chance in some cases it would mean the government would take a lot of the money back by reducing your benefit. It is, and we definitely agree with the recommendations that we've made. So if you were to have a couple that are maximising the savings through the scheme...

they'd actually have £7,200 by the end of the four years, including the bonus. Now, ultimately, that's going to take you over that capital limit that you mentioned. So we would like that to be exempt from the scheme just to help people.

still take out the scheme. You know, we mentioned about there not being enough take-up, so that would be a good opportunity. And obviously those are people who can afford to save the maximum, but how important is it for people, even on the lowest incomes, to save something, to have something in the bank? It is so important.

The people that we speak to, the main issue that they've got is that they've had a financial shock, they've had a change in the circumstances that they're not expecting. If they have the opportunity to have this little bit of a rainy day fund, it'll hopefully allow them to have that bit more resilience. when these life changes do happen. And if you're on Universal Credit, people are listening, maybe didn't know about it, how can they apply? Is that a simple process?

Oh, it's really simple. So there's two ways to do it. You can sign up through the gov.uk website or you can download the HMRC app. They will ask you for a couple of bits and bobs, but overall, it's a really easy process. So have a look as soon as you can. Matthew Joan of Money Wellness, thanks very much. And you search helptosave at gov.uk. It's also on an HMRC app on your mobile, though you do need a government gateway account for that. And I have to say, we have been getting so many emails.

Most of them, I have to confess, about bereavement and how badly the people have been treated on that. I'm very sorry to hear that. It's a subject we may well come back to and also about the problems of... of getting your money, but also about Torsten Bell's proposal to put pension funds into infrastructure, which many people find a bit alarming. Probably come back to that one as well.

And talking about help to save, the Moneybox podcast, of course, is about help to, well, do everything concerning your finances. And remember, you can hear it first by listening live on BBC Radio for midday on Saturdays. If you want your story to be heard, email moneybox at bbc.co.uk. In fact, many of you have been to tell us about your recent travel nightmares. So coming up next on Moneybox Live podcast, Felicity Hanna will be talking about what to do when that dream...

holiday wakes you up in a cold sweat. Wing a voice note to us on WhatsApp. The number is 033 06783 183. We do read and listen to them all. You might get on the show. In this podcast, the reporter was Dan Whitworth, researchers Catherine London, Joe Krasner, studio manager Patrick Shaw. Our editor is Jess Quayle, I'm Paul Lewis, and this was a BBC News Money and Work production for BBC Sounds, which also has this. News moves fast but understanding takes time.

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