Bill to create pension ‘megafunds' and tidy up ‘micro' retirement savings pots
Many people build up several small pensions that can be hard to keep track of as they switch jobs. The Bill will bring together micro pension pots worth £1,000 or less into one pension scheme.
For people approaching retirement, the Bill will require schemes to offer clear default options for turning savings into a retirement income.
There will also be new rules creating multi-employer defined contribution (DC) scheme megafunds of at least £25 billion, using economies of scale to invest in a wider range of assets.
The Government said defined benefit (DB) pension schemes will also have increased flexibility to 'safely' release a surplus worth collectively £160 billion, to support employers' investment plans and benefit scheme members.
Work and Pensions Secretary Liz Kendall said: 'The Bill is about securing better value for savers' pensions and driving long-term investment in British businesses to boost economic growth in our country.'
Chancellor Rachel Reeves described the legislation as 'a game changer'.
Pensions minister Torsten Bell said: 'Pension saving is a long game, but getting this right is urgent so that millions can look forward to a higher income in retirement.'
Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at LCP (Lane Clark & Peacock), said: 'Whilst there are many worthy measures in the Bill, the biggest omission is action to get more money flowing into pensions.'
He continued: 'This issue is unfortunately on the back burner. Measures such as consolidating tiny pension pots are helpful tidying up measures, but do nothing to tackle the fundamental problem that millions of us simply do not have enough money set aside for our retirement.
'With every passing year that this issue goes unaddressed, time is running out for people already well through their working life to have the chance for a decent retirement.'
Patrick Heath-Lay, chief executive of People's Partnership, provider of the People's Pension, said: 'The Bill contains many measures that will require providers to deliver better outcomes for savers and improve the workplace pension system.
'We are encouraged by the introduction of default consolidator schemes, which will be the most effective way to solve the dormant small pots problem.'
Andy Briggs, CEO of Phoenix Group, said: 'The Bill sets a clear direction for the future of pensions with the emphasis on building scale and ensuring savers receive value for money.'
Ian Cornelius, CEO of Nest, said: 'We believe that large, well-governed schemes can drive great outcomes for their members by using their scale and expertise to diversify where money is invested, and gain access to attractive investment opportunities not available to smaller investors at low cost.'
Nausicaa Delfas, chief executive of the Pensions Regulator, said: 'Making sure all schemes are focused on delivering value for money, helping to stop small, and often forgotten pension pots forming, and guiding savers towards the right retirement products for them, will mean savers benefit from a system fit for the future.'
Michelle Ostermann, chief executive of the Pension Protection Fund, said: 'We will support the Government and policymakers as the Bill progresses.'
Rocio Concha, director of policy and advocacy at Which?, said: 'Pensions have become far too complex and fragmented, so it's good to see the Government taking steps to simplify them and ensure schemes provide value for money.
'Which? has campaigned for years for the consolidation of small pots, so we are delighted that this Bill is seeking to do just that – a move that will provide greater value for savers and support them to keep track of their pensions.'
Yvonne Braun, director of policy, long-term savings, at the Association of British Insurers, said: 'This wide-ranging Bill is set to usher in the most large-scale pension reforms since auto-enrolment. The details will be crucial and we will scrutinise the Bill to ensure it puts the interests of savers first.
'We also urgently need to tackle the level of pension contributions which are too low to create an adequate retirement income for many. We urge government to set out the details of its adequacy review as soon as possible.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sky News
an hour ago
- Sky News
Who is Jimmy Lai? 'Prisoner of conscience' who has endured 1,600 days behind bars
Hong Kong media tycoon Jimmy Lai has been in a high-security prison for more than 1,600 days. The 77-year-old was arrested over his role in pro-democracy protests in 2019 and has since been charged with various offences, including collusion with foreign forces, as well as sedition under colonial-era laws. His trial for alleged national security offences has faced lengthy delays, but is due to restart in Hong Kong on Thursday. Here is everything you need to know about the "world's most famous prisoner of conscience" and his trial, as it draws ever closer to a long-awaited conclusion. Who is Jimmy Lai? Lai was born in mainland China but fled to Hong Kong at the age of 12, after stowing away on a fishing boat. Here, he began working as a child labourer in a garment factory. He went on to build a fortune with the fashion empire Giordano and, after the 1989 Tiananmen Square massacre, when thousands of people protested for political reforms in Beijing, he became a democracy advocate and turned his hand to newspapers. Ahead of the 1997 handover of Hong Kong from the UK to China, he started the Chinese-language newspaper Apple Daily in an attempt to maintain freedom of speech. The paper was staunchly pro-democratic and did not shy away from criticising authorities in Beijing. Around the same time, in 1994, he became a full British citizen. He has never held a Chinese or Hong Kong passport, but is seen as a Chinese citizen by Hong Kong authorities. Why is he in jail? It was his pro-democratic beliefs that led to Lai becoming a key figure in the 2019 protests in Hong Kong, spurred by Beijing's tightening squeeze on wide-ranging freedoms. Lai's Apple Daily newspaper backed the protesters, criticising the government reforms. Lai and his sons were arrested in August 2020 after police raided the offices of the Apple Daily publisher, Next Digital. He was granted bail, but this was overturned in December of the same year, when Lai was charged with fraud. He was charged under the very national security laws, put in place in 2020, that he had protested. The charges include collusion with foreign forces, as well as conspiracy to print and distribute seditious publications. Lai has been in solitary confinement for most of his imprisonment. During this time, he has lost a significant amount of weight and his son, Sebastien Lai, has consistently raised concerns for his father's declining health. His legal team has claimed he has been denied independent medical care for diabetes, is only allowed out of his cell for 50 minutes a day and, as a devout Catholic, has been denied the Eucharist. However, this week the South China Morning Post has reported a Hong Kong government spokesman saying that Lai had received appropriate treatment and welfare in prison. What has happened during his trial so far? After years of delay, Lai's national security trial started in December 2023. Prosecutors allege that Lai conspired with senior executives at Apple Daily to publish 161 seditious articles intended to incite hatred toward the central or Hong Kong governments. They labelled him a "radical political figure" and accused him of asking the US and other foreign countries to impose sanctions on Hong Kong and mainland China. The charges he faces under the territory's national security law could see him handed a life sentence. But Lai has always denied the charges against him. Nearly a year after the trial started, in November 2024, Lai took to the stand to testify. During his 52 days on the stand he faced questions about his editorial control over Apple Daily, links to activists in Hong Kong, the UK and US - and about alleged meetings with US politicians. Closing arguments in the trial were due to start on 28 July, but were delayed until 14 August. The next hearing is due to last around eight days. How is the British government involved? As he is a British citizen, the UK government expressed concern when Lai was first charged under the national security law in 2020. Subsequent British governments, including the current Labour one, have said Lai's imprisonment is a breach of the Sino-British Joint Declaration - the 1984 agreement which set out the conditions of the transfer of Hong Kong from the UK to China. Three months after winning the general election, Sir Keir Starmer said securing Lai's release was a "priority" for his government and said his government would "continue" to raise the case with China. Most recently, during a January trip to China, Chancellor Rachel Reeves said she raised the question over Lai's imprisonment with every minister she met. Foreign Secretary David Lammy said he has also pressed Chinese foreign minister Wang Yi on Lai's detention during previous visits. In March, Lai's son, Sebastien, delivered a letter to 10 Downing Street asking for a meeting with Sir Keir to get his father released immediately. He said he was worried his father might die in prison and the case is a "litmus test" for the government to see if it will stand up to China for a British citizen who is in jail "for peaceful campaigning and journalism".
Daily Mirror
an hour ago
- Daily Mirror
Boris Johnson named as potential witness in Nuked Blood Scandal crimes against troops
In office, Boris Johnson was told of allegations about crimes by the British state in withholding information about blood testing of nuclear troops. Now he has been identified as a potential witness in a criminal investigation Boris Johnson has been named as a potential witness to a criminal cover-up at the heart of the British state. The former PM's name appears, alongside others, in evidence handed to Thames Valley Police, which is considering whether to launch a full investigation. Detectives have been urged to question him about a secret programme of human radiation experiments on servicemen, the results of which have been withheld from their personnel files. The Nuked Blood Scandal - involving blood tests taken from troops before, during and after service at Cold War nuclear weapons trials - has led to a formal allegation of misconduct in public office centred on the Ministry of Defence. If convicted, such a charge is likely to lead to a sentence of 3 or 4 years' in jail for any public official who has acted unlawfully in post, with harm caused to others as a result. The maximum sentence is life imprisonment. Alan Owen of campaign group LABRATS said: "Veterans and their families have been serving a life sentence of their own. Chronic illness, cancers, birth defects, bereavement, miscarriage, trauma, suicide - much of it avoidable, and all of it more treatable, had they been told what really happened. "Instead they had decades of denial from successive governments. Boris was the first PM to sit down and look us in the eye, and now we ask him to do the right thing once again. and help the veterans get the justice they have for so long been denied." Mr Johnson was first informed of the scandal by the Mirror during a showdown in his Parliamentary office in June 2022, when he was asked to authorise a nuclear test medal. We showed him a 1958 memo between atomic scientists discussing the "gross irregularity" in the blood tests of a squadron leader who had been ordered to fly through mushroom clouds. We told the PM - in front of witnesses who included ministers, Downing Street officials, and backbench MPs - that the officer's medical records were being unlawfully withheld, and that was potentially a criminal offence. "Yes it is," he agreed, before studying the memo and asking the Mirror where the records had been hidden. It is not known what action he took as a result of the information he had been given. His representatives have been asked for comment. Mayor of Greater Manchester Andy Burnham, who is also named as a potential witness, confirmed he would speak to the police if asked. He said: "Just as with infected blood, I believe senior politicians have been witnesses to a live and ongoing cover-up affecting our nuclear test veterans. If the police decide to investigate, it is incumbent upon all of us to co-operate fully and tell officers what we know. Politicians must have the courage to step forward and end Whitehall's culture of cover-up." Victims Commissioner demands police investigate allegations of Nuked Blood cover-up Other names on the list of potential witnesses include lawyers who provided sworn testimony, submissions to judges and written evidence handed in to court, stating that blood testing of troops did not take place, no documentation about it existed, and all relevant records had been disclosed. Thousands of pages of orders, discussion and results have since been uncovered, and a huge database is due to be declassified. Keir Starmer, who was first informed of missing medical records while Leader of the Opposition, is also on the list, along with Defence Secretary John Healey and Veterans Minister Al Carns. Downing Street, the MoD, and Government Legal Department all declined to answer the question of whether they would co-operate with any investigation. A government spokesman said: "These claims are false and there is no evidence to back this up. The Minister for Veterans and People has commissioned officials to look seriously into unresolved questions regarding medical records as a priority. This comprehensive work is underway and will enable us to better understand what information the department holds in relation to the medical testing of service personnel who took part in the UK nuclear weapons tests." Former Conservative ministers, and staff at the Atomic Weapons Establishment, have also been identified to police as people who may be able to shed light on who knew about the blood testing, and what was done about it in government. Campaigners say all the people they have named were told, or should have known, there was evidence of criminal behaviour within the MoD, and taken steps to report it to police. A ministerial review of the records has so far checked more than a million pages of documents, including orders for blood testing, but the government has refused to tell Parliament what has been found.
Times
an hour ago
- Times
Inheritance tax proposals would make UK ‘dangerous place' for wealthy
Treasury proposals to stop parents from making unlimited tax-free gifts to their children would make the UK a 'dangerous place' for wealthy people to live, tax experts have warned. Government officials are said to be examining proposals that would tighten the rules on the gifting of money and assets in an attempt to close the black hole in government finances at the autumn budget. The move has been attacked by the Conservative leader, Kemi Badenoch, who claimed Rachel Reeves, the chancellor, wanted to tax 'what you leave your children … all to pay for [her] failures'. • How an inheritance tax raid could work — and what you can do about it Richard Tice, Nigel Farage's deputy, promised Reform UK would abolish a tax that caused 'unnecessary pain to grieving families' and 'disincentivises hard work, ambition and risk-taking'. Dan Neidle, the founder of Tax Policy Associates, said while a raid on inheritance tax might be a good idea in theory, Reeves was highly unlikely to adopt it amid concerns that it would further discourage wealthy people from living in the UK. 'The changes to inheritance tax rules and non-dom status at the last budget have already sent quite a damaging message to wealthy people and there is a big risk that Labour suffers a death by a thousand cuts on the rich who have the ability to leave the UK,' he said. 'You would be saying to non-doms that not only do you have to pay inheritance tax — as announced in Reeves's last budget — but you can't even gift your way out of it. It would make the UK a very dangerous place for a wealthy person to be'. Neidle added that the move would also not necessarily help Reeves balance the books as it would be almost impossible for the Office for Budget Responsibility to accurately assess how much such a new tax might raise. 'No one knows how much people are gifting currently so there is no way that you could calculate how much the tax might theoretically raise,' he said. 'And if there is one thing the Treasury hates, it is not knowing the impact of tax changes.' David Sturrock, of the Institute for Fiscal Studies, said that Reeves was unlikely to be able to raise significant sums from inheritance tax without hitting small gifts made by middle earners. The Treasury is looking at the possibility of tightening rules that taper away inheritance tax liabilities on gifts made within seven years before a death, but Sturrock said there 'isn't a large amount of revenues coming in from gifts within that period. I don't think that is going to be a big revenue raiser'. A lifetime cap on tax-free gifts is also said to be under consideration. Sturrock said this would also have to be set very low to bring in large amounts, pointing to evidence that 90 per cent of the £14 billion in gifts made each year were below £20,000. 'It's going to have to be a number in the small thousands if you want to start bringing in substantial amounts of revenue,' he said. 'In a large majority of cases these gifts are being used to buy houses, it's help with a deposit. Those are more often received by those with wealthier parents, but it is still some 'ordinary' people too. [A cap] might be a way of preventing lifetime gifting to avoid some elements of inheritance tax, but it doesn't seem like it's going to raise game-changing sums unless you drastically expand the scope of gifts that are going to be taxed.' Badenoch said that Labour 'want your savings, your pension, your home and now what you leave your children', arguing for cutting spending rather than raising taxes. Tice confirmed his party was still committed to abolishing inheritance tax completely, a move which would cost an estimated £14 billion by the end of the parliament. 'Inheritance tax does little more than add extra unnecessary pain to grieving families. It disincentivises hard work, ambition and risk-taking, so it's no wonder this Labour government are such big fans of it,' he said. 'Reform UK would abolish this death tax, ensuring people are rewarded for their hard work and putting more money into the pockets of families.'
