New UK Government 'hits the ground running' with its pension change plans

In a move which surprised many, the UK's King Charles announced plans for a pensions scheme bill, during his speech earlier, the first one he has made since Labour took office earlier this month, says Steve Berridge, IFGL pensions technical manager.

He announced that “Bills will be brought forward to strengthen audit and corporate governance, alongside pension investment”.

It seems likely that there will be a full review of the auto-enrolment regime, leading, one suspects, to increases in mandatory contributions. This is inevitable, given current concerns that for many, DC pension provisions are simply inadequate.

Also on the agenda is a look at how DB schemes can be used in conjunction with possible superfunds, linking into the idea that pensions can play a major role in large investment projects. There are plans to review DC pension scheme consolidation and how small pension pots can be combined in one place and also plans to change the definition of terminal illness so that eligible savers can access lump sums earlier.

Finally, a further review of poorly performing default funds is plans, a continuation of the value for money framework established in the past couple of years.

What is striking is that the new Government appears to be on the same path as the outgoing one with its pension plans. There are currently rumours abounding about what changes they might make, but what has actually been announced is not really a departure from recent Government thinking on this important area.

We will watch with interest how things progress with the pension landscape but the initial outlook is that the new Government is placing a high degree of importance and urgency on an area that in some way or another affects all of us.

By Steve Berridge, IFGL pensions technical manager