Government pension reforms
On 14 November 2024, Chancellor Rachel Reeves gave her first Mansion House speech indicating the government’s plans for reforming the pensions industry. The speech contained a range of initiatives designed to increase the security, transparency and productivity of pensions across the UK.
Combining smaller schemes
Research suggests that larger pension schemes are generally able to invest more productively because of their size. That can mean better returns for members, as well as ensuring the money tied up in pension schemes is put to good use for the economy in areas such as innovation, infrastructure and public services.
With that in mind, the Chancellor proposed the introduction of pension ‘megafunds’, with some created by consolidating smaller defined contribution (DC) schemes and others through the merger of local government pensions.
Pensions Minister Emma Reynolds described the move as a "win-win", benefiting future pensioners, and the wider economy.
Further detail will be unveiled in a forthcoming Pensions Bill next year, while HM Treasury will consult with the industry on how best to implement these reforms.
Improving financial advice
The Chancellor also took the opportunity to announce that the Financial Conduct Authority (FCA) will be looking at changes to financial advice and guidance, with a view to improving the quality of advice offered to customers.
If you’re reviewing your finances, planning your retirement or considering a major change to your pension savings, we recommend getting advice from an authorised independent financial adviser (IFA). MoneyHelper, the government-sponsored service, can help you to find an IFA in your area. Go to MoneyHelper to get started.