The first King’s Speech of the new government introduced a Pension Schemes Bill, which largely continues existing policies rather than introducing major new changes. The Bill emphasizes small pot consolidation, value for money, and greater scheme consolidation, continuing themes from previous years.
Labour has proposed the creation of a National Wealth Fund to drive investment in infrastructure, green projects, and other areas. With £7.3 billion in state funds allocated, Labour aims to attract additional private investment. In its manifesto, Labour also suggested reviewing workplace pensions to focus on consolidation and scale for better returns, while promoting greater investment in the UK.
This approach seems prudent given the substantial funds in UK pensions and savings that could be used to boost the economy. However, if new rules mandate investing a portion of pensions in potentially high-risk assets, it might not be beneficial for individuals. Balancing these interests is crucial to avoid pushing people into risky or costly investments without their consent or knowledge.
There was no mention of auto-enrolment in either Labour’s manifesto or the King’s Speech. Nonetheless, Labour has expressed interest in advancing the 2017 changes to extend auto-enrolment. A longer-term consideration in Labour’s wider pension review will be whether and when to increase the current 8% minimum contribution level.