The Pension Schemes Bill received Royal Assent on 29 April and became the\u00a0Pension Schemes Act, marking the most significant overhaul of pensions in a decade.<\/p>\n
The Act will bring about significant reforms to the UK pensions system, benefitting workers by up to \u00a329,000 by the time of retirement according to the Government.\u00a0\u00a0The Government\u2019s\u00a0statistics claim\u00a0that more than 20 million workers will see better retirement outcomes from the reforms.<\/p>\n
Minister for Pensions Torsten Bell said:<\/p>\n
\u201cFor too long, our pensions system has been fragmented and rarely ensures that people\u2019s savings are working hard enough to support them in retirement.\u00a0 The Pensions Schemes Act will change that by creating schemes that drive down costs, deliver higher returns, and give savers the security they deserve.\u201d<\/p>\n
While the focus has been on unlocking billions for the UK economy, as a pension member, you likely have a more immediate question: what does this actually do to my money? Here are the key points:<\/p>\n
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Pension mandation backlash<\/strong><\/p>\n The journey to this point hasn’t been smooth, however.\u00a0 The pensions industry, led by major trade bodies and asset managers, pushed back during the consultation phases, and wrangling in Parliament between the Houses of Commons and Lords, saw an important part of the bill watered down: pension mandation.\u00a0\u00a0Pension mandation was an attempt by the Government to direct pension schemes where to invest scheme members\u2019 money \u2013 with the idea being that it could oblige such schemes to invest more in UK-based assets to help the economy grow.<\/p>\n However, under \u2018fiduciary duty\u2019, a pension trustee\u2019s sole legal obligation is to act in the best interest of the member. For years, the industry has argued that mandating where money goes would set a dangerous precedent.<\/p>\n This led to a rebellion in the House of Lords on this point.\u00a0 The Government finally agreed to pare back the powers it sought through the bill, to get it made into law.\u00a0 While it will still be able to mandate certain investments, pension investment managers will still be able to refuse under their fiduciary duty.<\/p>\n <\/p>\n How this affects your pension<\/strong><\/p>\n It is important to remember at this point that these reforms that individual pensions and retirement plans still have a raft of options available.\u00a0\u00a0For the most part these reforms affect workplace pensions, which in some cases (depending on the scheme) can still be adjusted to better suit your long-term plans.<\/p>\n An adviser can help you determine if your overall risk profile still aligns with your retirement goals, whether your portfolio lacks global diversification or if your current pension provider is delivering value for money under the new fee structures.\u00a0\u00a0Get in touch if you would like help reviewing your pension plans or for any other long-term financial planning matters.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The Pension Schemes Bill received Royal Assent on 29 April and became the\u00a0Pension Schemes Act, marking the most significant overhaul of pensions in a decade. The Act will bring about significant reforms to the UK pensions system, benefitting workers by up to \u00a329,000 by the time of retirement according to the Government.\u00a0\u00a0The Government\u2019s\u00a0statistics claim\u00a0that more than 20 million workers will see better retirement outcomes from the reforms. Minister for…<\/p>\n