Pensions reform in focus

SEC Newgate’s Life & Pensions team were at Pensions UK 2026 in Liverpool this week, catching up with familiar faces, making new connections, and joining some timely discussions about the future of pensions and retirement.

One of our highlights was hosting a breakfast with Steve Webb, Partner at LCP and former Pensions Minister, bringing together industry voices to explore some of the most significant issues on the agenda, including pensions adequacy, the Pensions Commission, productive finance and UK investment, and expectations around next week’s Budget. So, what were some of the big themes?

More pension reform is coming. Possibly the main thematic was the upcoming reforms on pension adequacy. The conference came only two weeks after the Prime Minister made his high-profile announcement to amend the triple lock on the state pension, which arguably has placed more emphasis on the future role that workplace pensions need to play in securing adequate retirements. 

Baroness Drake, the Pensions Commissioner, was largely tight-lipped during her session about the recommendations in her upcoming final report, but it is widely expected that contribution rates will go up for automatic enrolment. Torsten Bell focused extensively on this issue in his speech and confirmed that the Pensions Commission will make its final report in February and the government will act on its recommendations “swiftly” in spring. Other key announcements included an upcoming consultation this autumn on guided retirement, which could reshape the pension market by offering default retirement options for those in DC schemes. 

Secondly, with the Budget less than two weeks away, there was naturally speculation on what the Chancellor might do on pensions taxation. When asked about this, the Pensions Minister Torsten Bell, was not giving too much away, but he did make an announcement that there would be tax changes in the Budget to help those with terminal illnesses access their pension. However, when pressed more widely on whether he could rule out potential tax changes, such as on the tax-free lump sum, the Minister instead hit out at a number of pension providers, wealth managers and their PR teams for scaremongering people and fuelling speculation through “cheap PR” (those “irresponsible” pension providers and PR firms were not named by the Minister…).

Lastly, the future of DB schemes was heavily debated. Given that overall funding levels for DB schemes have substantially improved over the past few years, the options for sponsors and trustees have opened up and many of the discussions were focused on topics around buyouts/buy-ins, run on, surplus release and superfunds. In some of these discussions, the competing interests of sponsors and members can become apparent. In one tense moment during a panel session on what success looks like for DB pensions, an audience member made a pointed remark to a well-known asset manager on the panel that “success for DB schemes is making sure everyone gets paid their pension, anything else is just people being greedy”. 

All eyes then will be on the UK budget next week. The coming days are likely to see pensions as a significant area of Budget scrutiny and speculation, reflecting both the UK's long-term retirement savings challenge and the Government's focus on economic growth.