Latest news with #LCP
The Independent
9 hours ago
- Business
- The Independent
Workers could see £6,000 boost to pension pots under Government plans
Millions of workers could see a £6,000 boost to their retirement pots as part of Government plans to double the number of UK pension megafunds by 2030. Reforms in the Pension Schemes Bill propose that multi-employer defined contribution pension schemes and local government pension scheme pools operate at megafund level, managing at least £25 billion in assets within the next five years. This could result in an investment of £50 billion in infrastructure projects, which the Treasury hopes will boost the economy and drive up higher returns for savers. Chancellor Rachel Reeves said: 'We're making pensions work for Britain. These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses – the plan for change in action.' The schemes are expected to save £1 billion a year through economies of scale and improved investment strategies, the Treasury said. Under the reforms, the local government pension scheme will be consolidated, reducing the current 86 administering authorities into six pools. Deputy Prime Minister Angela Rayner said: 'The untapped potential of the £392 billion local government pension scheme is enormous. 'Through these reforms we will make sure it drives growth and opportunities in communities across the country for years to come – delivering on our plan for change.' Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP (Lane Clark & Peacock), described it as a 'truly a red letter day for pension schemes, their members and the companies who stand behind them'. He said: 'The Government has clearly been bold in this area and this opens up the potential for this surplus money to be used more productively to benefit scheme members, firms and the wider economy.'
Yahoo
9 hours ago
- Business
- Yahoo
Labour accused of unleashing ‘stealth tax' on pensions
Labour is preparing to unleash a 'stealth tax' on pensions, critics have warned. The new Pension Schemes Bill will give the Government the power to force pension funds to invest in British assets to help spark growth. Yet critics of the reform argue the change, laid out in the Treasury's Pensions Investment Review published Thursday, risks lower returns for savers. Pension industry experts also called into question government claims that the package of reforms could leave retirement savers £6,000 better off. Tory MP Neil O'Brien called the plans 'a massive stealth tax' and said pension savers will 'get lower returns' so the Government can reduce its borrowing costs. Mel Stride, the shadow chancellor, said the move was an extraordinary overreach. He said: 'Labour is crossing the Rubicon into directing the public's savings. Pension pots are there to secure retirements, not to bankroll a government.' Last month major pension providers said they would voluntarily commit to investing 5pc of their total funds into UK assets by 2030. However, the new reserve power would go further and mandate how much of savers' money needs to go into UK plc. Experts within the industry have also thrown scorn on the plans. Tom Selby, director of public policy at AJ Bell, said the move 'puts a gun to schemes' heads and will create those mandatory targets in all-but-name'. Laura Myers, partner and head of DC pensions at consultancy LCP, said the threat of the Government telling trustees how they should invest was 'a step too far' that 'risks losing sight of the primacy of member interests'. James Carter, of investment firm Fidelity International, labelled the power to direct pension scheme investments in the future 'a concern'. Publication of the review follows the news this week that HM Revenue and Customs is exploring plans to tax pension contributions made via salary sacrifice work schemes. If implemented the changes would cost the average earner more than £500 a year in extra income tax and National Insurance – and whittle away their pension pot and their retirement potential. The Government has said that the changes within the new review will result in an additional £6,000 on average being added to an individual's pension pot over a lifetime of saving, as revealed by the Telegraph. However, Sir Steve Webb, a former pensions minister and now a partner at LCP, has said he would not 'put any weight' on the figure. He said that while lower cost pensions due to reforms could see savers add to their pots, the increase will only be marginal and there is a risk that costs actually rise, adding: 'Even the assertion that there will be overall cost savings is far from obvious.' Mr Selby added: '£6,000 isn't exactly a big potential 'gain' over the course of a retirement in return for the extra risk that is likely to be taken on. Entirely possible the gains will be higher but they could also be lower.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
10 hours ago
- Business
- Yahoo
Labour accused of unleashing ‘stealth tax' on pensions
Labour is preparing to unleash a 'stealth tax' on pensions, critics have warned. The new Pension Schemes Bill will give the Government the power to force pension funds to invest in British assets to help spark growth. Yet critics of the reform argue the change, laid out in the Treasury's Pensions Investment Review published Thursday, risks lower returns for savers. Pension industry experts also called into question government claims that the package of reforms could leave retirement savers £6,000 better off. Tory MP Neil O'Brien called the plans 'a massive stealth tax' and said pension savers will 'get lower returns' so the Government can reduce its borrowing costs. Shadow chancellor Mel Stride said the move was an extraordinary overreach. He said: 'Labour is crossing the Rubicon into directing the public's savings. Pension pots are there to secure retirements, not to bankroll a government.' Last month major pension providers said they would voluntarily commit to investing 5pc of their total funds into UK assets by 2030. However, the new reserve power would go further and mandate how much of savers' money needs to go into UK plc. Experts within the industry have also thrown scorn on the plans. Tom Selby, director of public policy at AJ Bell, said the move 'puts a gun to schemes' heads and will create those mandatory targets in all-but-name'. Laura Myers, partner and head of DC pensions at consultancy LCP, said the threat of the Government telling trustees how they should invest was 'a step too far' that 'risks losing sight of the primacy of member interests'. James Carter, of investment firm Fidelity International, labelled the power to direct pension scheme investments in the future 'a concern'. Publication of the review follows the news this week that HM Revenue and Customs is exploring plans to tax pension contributions made via salary sacrifice work schemes. If implemented the changes would cost the average earner more than £500 a year in extra income tax and National Insurance – and whittle away their pension pot and their retirement potential. The Government has said that the changes within the new review will result in an additional £6,000 on average being added to an individual's pension pot over a lifetime of saving, as revealed by the Telegraph. However, Sir Steve Webb, a former pensions minister and now a partner at LCP, has said he would not 'put any weight' on the figure. He said that while lower cost pensions due to reforms could see savers add to their pots, the increase will only be marginal and there is a risk that costs actually rise, adding: 'Even the assertion that there will be overall cost savings is far from obvious.' Mr Selby added: '£6,000 isn't exactly a big potential 'gain' over the course of a retirement in return for the extra risk that is likely to be taken on. Entirely possible the gains will be higher but they could also be lower.'
Powys County Times
17 hours ago
- Business
- Powys County Times
Millions of workers could see £6,000 boost to pension pots
Millions of workers could see a £6,000 boost to their retirement pots. Reforms in the Pension Schemes Bill propose that multi-employer defined contribution pension schemes and local government pension scheme pools operate at megafund level, managing at least £25 billion in assets within the next five years. The Government plans to double the number of UK pension megafunds by 2030. This could result in an investment of £50 billion in infrastructure projects, which the Treasury hopes will boost the economy and drive up higher returns for savers. Since taking office we've delivered pay rises for over 3 million workers by increasing the National Minimum and Living Wage, and secured trade deals with key international partners. Today I spoke to the unions about our ongoing commitment to working people. — Rachel Reeves (@RachelReevesMP) May 28, 2025 Chancellor Rachel Reeves said: 'We're making pensions work for Britain. These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses – the plan for change in action.' The Treasury said the schemes are expected to save £1 billion a year through economies of scale and improved investment strategies. Under the reforms, the local government pension scheme will be consolidated, reducing the current 86 administering authorities into six pools. Deputy Prime Minister Angela Rayner said: 'The untapped potential of the £392 billion local government pension scheme is enormous. Recommended reading: 'Through these reforms, we will make sure it drives growth and opportunities in communities across the country for years to come – delivering on our plan for change.' Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP (Lane Clark & Peacock), described it as a 'truly a red letter day for pension schemes, their members and the companies who stand behind them'. He said: 'The Government has clearly been bold in this area and this opens up the potential for this surplus money to be used more productively to benefit scheme members, firms and the wider economy.'
Glasgow Times
19 hours ago
- Business
- Glasgow Times
Millions of workers could see £6,000 boost to pension pots
Reforms in the Pension Schemes Bill propose that multi-employer defined contribution pension schemes and local government pension scheme pools operate at megafund level, managing at least £25 billion in assets within the next five years. The Government plans to double the number of UK pension megafunds by 2030. This could result in an investment of £50 billion in infrastructure projects, which the Treasury hopes will boost the economy and drive up higher returns for savers. Since taking office we've delivered pay rises for over 3 million workers by increasing the National Minimum and Living Wage, and secured trade deals with key international partners. Today I spoke to the unions about our ongoing commitment to working people. — Rachel Reeves (@RachelReevesMP) May 28, 2025 Chancellor Rachel Reeves said: 'We're making pensions work for Britain. These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses – the plan for change in action.' The Treasury said the schemes are expected to save £1 billion a year through economies of scale and improved investment strategies. Under the reforms, the local government pension scheme will be consolidated, reducing the current 86 administering authorities into six pools. Deputy Prime Minister Angela Rayner said: 'The untapped potential of the £392 billion local government pension scheme is enormous. Recommended reading: 'Through these reforms, we will make sure it drives growth and opportunities in communities across the country for years to come – delivering on our plan for change.' Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP (Lane Clark & Peacock), described it as a 'truly a red letter day for pension schemes, their members and the companies who stand behind them'. He said: 'The Government has clearly been bold in this area and this opens up the potential for this surplus money to be used more productively to benefit scheme members, firms and the wider economy.'
