Pensions - Articles - Pensions in the Budget 2026

David Brooks, Head of Policy, Broadstone, commented: “Much of the pensions policy debate continues to focus on tax relief and encouraging people to save more, but there has been far less attention on what happens when those modest savings turn into retirement income. With the State Pension reaching the personal tax allowance, policymakers will need to think more carefully about the incentives facing lower and moderate earners. For some workers, particularly those expecting to rely heavily on the State Pension, the value of additional pension saving becomes less straightforward than it once appeared. At the same time, rising earnings and increases in the National Living Wage are steadily bringing more money into pension saving through automatic enrolment. The question is no longer simply how to increase contributions, but whether the overall system continues to offer clear and compelling rewards for lower earners throughout the whole savings journey. These questions are becoming increasingly relevant as policymakers await the findings of the next phase of the Pensions Commission and further consideration of future State Pension age increases. Both exercises are focused on the long-term sustainability of retirement provision, but they are being conducted against a rapidly changing backdrop of higher minimum contributions, maturing automatic enrolment savings and evolving interactions between the State Pension and the tax system. A quiet Budget may postpone that debate, but it does not make it go away. In fact, the foundations on which future pensions policy is being built may already be shifting.”

Calum Cooper, Head of Pension Policy Innovation, Hymans Robertson says: “A relatively quiet Budget for pensions should not be mistaken for a lack of pensions policy, particularly following on from the changes to triple lock announced last month at the Labour party conference. The challenge now for the government is joining up the reforms already under way into a coherent plan for retirement and look after pensioners of today, and the future. We now need to think about the State Pension, workplace saving and retirement income together, will acknowledging the challenges around the gender pensions gap and what the industry can do to close this gap. Our modelling shows how the Government plans to retain an earnings-linked State Pension foundation while improving long-term sustainability for taxpayers and benefiting the economy – no mean feat. By increasing the tax on cash savings and on property, the budget announced today makes saving in to pensions even more attractive. As a consequence, this budget puts long term investment at its core, for both employed and self employed workers, aligned withe the principle of a system which works hard to greater confidence about what they can expect in later life.”