A new Bill announced by the new UK Government could boost workplace pensions by 9 per cent. New measures to help people boost their pension pots announced in the King’s Speech on Wednesday have been welcomed by industry experts, but they said there is more work to do. The Pensions Schemes Bill aims to support more than 15 million people who save in private sector schemes to receive better outcomes from their pension assets.
The Bill aims to encourage pension consolidation and put a focus on value and outcomes for scheme members. The legislation forms part of wider plans aimed at boosting economic growth and it is hoped the moves will enable pension schemes to invest in a wider range of assets, driving growth. Measures include preventing people from losing track of their pension pots by automatically bringing small pots together.
This could also benefit pension schemes , which have been required to manage some loss-making pots. A standardised test will also be introduced that trust-based defined contribution (DC) schemes will need to meet to demonstrate they are delivering value. This should leave a smaller number of well-governed schemes and help improve outcomes for savers.
The Financial Conduct Authority (FCA) will ensure the framework is applied consistently. Pension schemes will also be required to offer retirement products, so that people can have a pension and not just a savings pot when they stop work. Duties will be placed on trustees of occupational pension schemes.
