Government urged to take immediate action on pensions | Personal finance

A legal expert has called on Chancellor Rachel Reeves to speed up work on several pension policies.

Clive Pugh, partner at Burges Salmon, said the new pensions minister had a “very complex portfolio” to consider, encompassing several previous government policies.

He said: “Many of our customers have a long list of issues they would like the new Pensions Minister to address as soon as possible.

“For defined benefit (DB) plans, the most urgent request will be to review the new DB Funding Code issued by the Pensions Regulator (which will accompany the regulations coming into force for plans with a valuation date from 22 September 2024).

“But there are many other unresolved and ongoing legal issues.”

He added that another important policy that needs to be implemented is the pension panel, with the final connection deadline currently set at 31 October 2026.

Another concern is the extension of automatic enrolment, as legislation has been “legislated but not yet come into force” to cover all workers aged 18 and over. It currently covers workers aged 22 and over.

Mr Pugh listed other issues that need to be addressed, including “resolving the shortcomings of the Lifetime Allowance abolition (legislation delayed by the election), the outcome of the Virgin Media appeal (and any related DWP involvement in this matter), reportable events (will the new system ever see the light of day?) and, for defined contribution schemes, the promised consultation on new value for money requirements”.

Mr Pugh highlighted Labour’s manifesto promise to review the pensions landscape, which suggests changes to the pension system could be coming.

He said: “We can therefore expect both market consolidation and manufacturing finance to remain high on the agenda, as they did under the Conservative Party’s Mansion House reforms.

“We would like to see the government’s new review of the pensions ecosystem, which will include both private and public sector findings, fully engage with industry stakeholders who will have valuable insights and perspectives to offer on both the challenges facing pensions and possible future solutions.”

Michael Hayles, another partner at Burges Salmon, said there could be a policy shift towards the Mansion House reforms.

He explained: “With the promise of significant reforms to employment law, we could see a new Labour government take a fresh look at workplace pension rights – perhaps increasing auto-enrolment contribution rates or extending duties to address long-term concerns about pension adequacy.”

But he also pointed to several uncertainties surrounding pensions policy. He commented: “Will we see more wholesale changes to existing public service pension arrangements in the face of the promised wave of insourcing of public services?

“Climate change is likely to be a key area of focus – Labour’s manifesto pledged to make the UK “the green finance capital of the world” and require pension funds and other financial institutions to “develop and implement credible transition plans consistent with the 1.5°C target of the Paris Agreement”, but what will this requirement look like and how will it be implemented?”

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