Pensions - Articles - General Election call means pension reform up in the air

TPT Retirement Solutions, My Pension Expert and The PMI all comment following Prime Minister Rishi Sunak’s general election announcement.

 Nicholas Clapp, Commercial Director of TPT Retirement Solutions, said: “The announcement of the general election means the progress of several important pension reforms is now up the air. The expansion of automatic enrolment to those aged under 22 and those in part-time work will now be delayed until we know the result of the election and the administration’s intentions, which will delay people from building up their savings for retirement. We were also expecting a draft of the multi-employer Collective Defined Contribution (CDC) scheme regulations to be published in the coming weeks. These rules would have made it possible for all employers to provide their staff with a CDC pension scheme rather than just the largest employers who it is currently more suited to.

 Proposals to give DB schemes more flexibility to access surpluses will also be delayed. These reforms would have created a much greater incentive for schemes to consider run-on, serving as an alternative solution to an insurer buyout.”

 Lily Megson, Policy Director at My Pension Expert said, "The race begins. The Prime Minister’s rainy day general election announcement is a pivotal moment for savers. As parties begin finalising their manifestos, it is crucial they understand the need for clear and robust policies that address the pressing issues facing households brought on by the cost-of-living crisis.
 “In his speech, Rishi Sunak stated that whoever takes on the coming period of economic stability will need ‘a clear plan and bold action’. As households struggle to keep up with soaring prices, it's unclear what economic stability he was referring to. However, when it comes to pensions policy, he is certainly right about the need for a clear plan and bold action.
 “I urge all parties to now put forward comprehensive and transparent policies that will help us move beyond the economic instability of recent years. These policies should safeguard the financial futures of the UK’s retirement planners while putting improvements to financial education and literacy and access to financial advice at the forefront.”

 Tim Middleton, Director of Policy and External Affairs at the Pensions Management Institute, said: “The Pensions (Extension of Automatic Enrolment) Act 2023 gained Royal Assent in September last year, but as yet we are still awaiting the Regulations needed to implement the changes. It would be extremely frustrating for these overdue reforms to be delayed any longer. When the coalition government came to power in 2010, one of their first reforms was to the drawdown rules. I would hope that an incoming government would consider reforms to the Freedom and Choice regime as a priority. There is clear evidence that members are making poor decumulation decisions and an initiative to address this would be most welcome. Perhaps my biggest concern at this point is that there is no Shadow Pensions Minister. This is something that must be rectified as a matter of urgency.” 

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