Paul Waters, Head of DC Markets, Hymans Robertson says: “The last few months have seen a flurry of activity around the pensions landscape, and we are pleased to see the second reading of the Pension Schemes Bill take place today ahead of the forthcoming summer recess. The Bill marks a seismic shift in UK pension policy and sets in motion wide-ranging changes across both defined contribution (DC) and defined benefit (DB) pension schemes, including the Local Government Pension Scheme (LGPS). With the Bill set to introduce some of the most significant changes to the pensions landscape in years, including the release of DB surplus and default retirement solutions for DC members, it presents a vital opportunity to improve the long-term financial wellbeing of savers while supporting national growth priorities to create a more prosperous place to retire into. Today’s reading must ensure that reforms deliver the intended aim of pensions as a force for good, delivering better retirements and fuelling UK growth while helping the industry to continue to innovate and grow. However, debate could be hampered by the fact that the Bill lacked clarity in certain areas. While it introduced fairly significant powers for the government over LGPS funds and pools, the criteria and circumstances for when these powers would be exercised was not included. Also missing, was more detail on the goals for local investment. Without this, conversations around what is best can’t be had in full. The Pension Schemes Bill is a once-in-a-generation opportunity to align pensions policy with national prosperity. It lays some of the essential groundwork which would enable the realisation of many of our proposals, as outlined in The Untapped Potential of Pensions. These outline how unlocking the untapped potential in pensions could help with better pensions for people by removing barriers to adequacy by saving the Treasury and employers money, all while stimulating much needed investment in the UK. It could generate the £100bn a year that is needed for 3% economic growth and our net-zero transition - all essential ingredients for Phase 2 of the review - reassuringly now committed to happening shortly.”
Lisa Picardo, Chief Business Officer UK at PensionBee, said: “Whilst the second reading of the Pension Schemes Bill 2024–25 is a further step forward, more ambition is needed to ensure automatic enrolment works universally, for everyone in today’s workforce.
“Lowering the age of enrolment to 18 and removing the earnings threshold altogether would help to close long-standing gender and income gaps in retirement savings. Millions of workers – particularly younger, part-time and lower-paid individuals – remain excluded from the current system, and even those who are enrolled often save too little to meet the rising cost of retirement. Through our Invisible Workers campaign, we’ve also called for urgent reform to bring gig economy workers into the scope of auto enrolment. These workers contribute significantly to the economy and represent a growing population, yet are too often overlooked by outdated legislation. The Government now has a golden opportunity to deliver a fairer, more inclusive and adequate pension system that reflects the realities of modern working life.”
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