Pension Schemes Bill returns to Parliament for second reading
Reforms that will consolidate small pension pots could see working people earn up to £29,000 by the time they retire, according to new figures from the government.
It comes as the Pension Schemes Bill returns to Parliament for its second reading today (7 July).
The Bill will see pension pots worth £1,000 or less brought together into one pension scheme that is certified as delivering good value to savers.
In future, schemes will also need to prove they’re value for money, helping savers to understand whether their scheme is giving them a return, and protecting them from getting stuck in underperforming schemes.
These measures will lay the foundation for the Pensions Review.
Minister for Pensions Torsten Bell said: “We’re ramping up the pace of pension reform, to ensure that people’s pension savings work as hard for them as they worked to save.
“The measures in our Pension Schemes Bill will drive costs down and returns up on workers’ retirement savings – putting more money in people’s pockets to the tune of up to £29,000 for an average earner and delivering on our Plan for Change.”
The bill will also “simplify retirement choices”, with all pension schemes offering default routes to an income in retirement, as well as increased flexibility for Defined Benefit pension schemes to safely release surplus worth collectively £160 billion.
Additionally, the bill will future-proof the Local Government Pension Scheme, leading to the consolidation of all £400 billion of assets into a small number of “expert asset pools”, which can invest in local areas.
Minister for Local Government and English Devolution Jim McMahon OBE said: “This Bill will ensure the Local Government Pension Scheme is fit for the future and harness its full potential, with assets due to reach £1tn by 2040, and will strengthen investment in local communities to accelerate growth as part of our Plan for Change.”
