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Pension Schemes Bill 2025-07-07
07 July 2025
Lead MP
Torsten Bell
Debate Type
General Debate
Tags
TaxationEmployment
Other Contributors: 52
At a Glance
Torsten Bell raised concerns about pension schemes bill 2025-07-07 in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The Bill aims to deliver fundamental reforms to the pensions landscape, building on a broad consensus across the House. It focuses on higher returns for pension savers, responds to specific responsibilities in Parliament, and addresses the fragmentation of the current system by creating megafunds through consolidation. The UK's pension system is worth £2 trillion, with over 22 million workers saving for pensions since the policy of automatic enrolment was introduced in 2012. However, there are no grounds for complacency as most retirees have defined-contribution pensions without guarantees. The Bill will require multi-employer schemes to have at least £25 billion in assets by 2030 and ensure better returns for savers through lower costs, diversified investments, and improved management.
Meg Hillier
Lab/Co-op
Hackney South and Shoreditch
She supports the direction of travel towards consolidation but expresses a slight concern about mandation. She asks how the Minister will ensure that the Bill actively delivers on both sides of the equation, ensuring that pension funds have better experts to advise and deliver returns for savers.
Orkney and Shetland
He raises concerns about the administration of defined-benefit schemes by large companies like BP, Shell, and Hewlett-Packard in the last Parliament. He questions what is being done to protect pensioners' positions under those schemes, specifically referring to pre-1997 indexation issues.
Orkney and Shetland
Asked the Minister about automatic appointments for pension savers to be guided towards better outcomes, suggesting that MaPS needs to work with pension schemes to facilitate this process.
The Minister thanked Mr Carmichael and acknowledged ongoing efforts to ensure the system can handle additional calls when pensions dashboards are rolled out. He promised to review the point raised by Mr Carmichael about automatic appointments.
Nick Smith
Lab
Blaenau Gwent and Rhymney
Asked the Minister for an update on the introduction of pension dashboards, suggesting recent progress deserves less laughter and optimism. He secured early warning from the Minister regarding a firm date.
Alan Gemmell
Lab
Central Ayrshire
Questioned about the Bill's impact on constituents like Patricia Kennedy in Hewlett Packard Pension Association, who are asking for more action on their pre-1997 non-index-linked contributions.
Julian Lewis
Con
New Forest East
Asked the Minister about specific cases such as the ExxonMobil pension scheme and potential loopholes that may prevent pensioners from receiving discretionary increases. He raised concerns over trustees' lack of power to award benefits directly.
Lincoln Jopp
Con
Spelthorne
Inquired about insurance buy-out being considered the gold standard and sought reassurance that increased choice for defined-benefit pension schemes would provide safety in superfunds as well as insurance buy-outs.
Kirsty Blackman
SNP
Aberdeen North
Highlighted concerns about surplus funds benefiting employees rather than employers and requested more information on the expected splits during Committee discussions.
Mark Garnier
Con
Wyre Forest
Welcomes the Bill despite its imperfections, highlighting cross-party support. Acknowledges past Conservative efforts to improve workplace pensions through auto-enrolment and commends measures in the Bill such as the consolidation of pension funds and the creation of larger megafunds. Raises concerns about pensions adequacy and the need for further reforms.
Questions whether the Government's policies address the cost-of-living crisis affecting young people’s ability to enrol in pension schemes, highlighting a Public Accounts Committee report that found similar issues years ago.
Name
We are concerned about the lack of detail in the Bill. Too much is left to the discretion of regulators and to secondary legislation. Parliament deserves to have proper oversight of these reforms. We support greater flexibility when it comes to the extraction of surpluses from defined-benefit pension schemes but there need to be robust safeguards; that is certainly the message coming back from the industry.
Name
We would welcome a strengthening of the Bill to prevent trustees from facing undue pressure from host employers to release funds for non-growth purposes. In addition, to provide stability, the Government should carefully consider whether low dependency, rather than buy-out levels, will future-proof the funds.
Name
The part of the Bill on which we have our most fundamental disagreement is the provisions on mandation. The Bill reserves the power to mandate pension funds to invest in Government priorities. That not only goes against trustees’ fiduciary duties but means potentially worse outcomes for savers.
Debbie Abrahams
Lab
Oldham East and Saddleworth
We recognise that defined-contribution pension schemes have around £500 billion in assets under management. Around 20% of these assets are invested in the UK. That is down from 50% some 10 years ago. It is very welcome that the Government are focusing on this, so that we can ensure that these assets contribute to our growth.
Meg Hillier
Lab
Hackney South and Shoreditch
Expresses concerns about mandation and calls for the Minister to provide context, success criteria other than 5% investment, and whether the sunset clause should be brought forward from 2035. Asks if the Government will consult on mitigating unintended consequences of mandation power and consider changing fiduciary duty law.
Debbie Abrahams
Lab
Oldham West and Royton
Supports concerns about long-term financial decisions being partly political. Asks the Minister for reasons behind further merging LGPS funds if proposed. Raises issues around PPF indexation rules and members struggling financially in later years.
Torbay
Supports the Bill but has concerns about mandation, transparency, and evidence of pensions helping tackle climate change positively. Welcomes development of larger pots and investment in economy through social rented housing and high streets.
Sarah Edwards
Lab
Tamworth
Stresses importance of early pension savings due to compound interest benefits. Supports Bill's aim to strengthen pension investment for around 20 million people, improve outcomes, and direct investments towards UK regional development from local authority funds.
Matt Rodda
Lab
Reading Central
Supports the importance of ensuring investment reaches high streets and towns beyond cities to help entrepreneurs in communities. Encourages Minister to take supportive approach towards pools transitioning into new ones.
Sarah Edwards
Lab
Tamworth
The Bill includes reforms to trustee payments of surplus to employers, enabling surplus funds to be paid out. It also allows automatic enrolment pension schemes regulated by the FCA to change investment strategies or transfer pots without individual member consent if it benefits members as a whole. The goal is to encourage fair and secure work with well-funded pensions, pushing forward on the value for money agenda to increase UK investments.
Kit Malthouse
Con
North West Hampshire
Expresses reservations about the Bill's centralisation of control over pension funds and risk of disenfranchising those it aims to help. Raises concerns about previous reforms that struck a hammer blow to British pension funds.
Debbie Abrahams
Lab
Oldham East and Saddleworth
Asks the Minister what problem he is trying to solve with this Bill. Malthouse believes it affects him uniquely as a member of the local government pension scheme.
Comments on Malthouse's points and raises questions about OMERS' performance compared to the London Pensions Fund Authority.
Callum Anderson
Lab
Buckingham and Bletchley
Supports the Bill as a landmark legislation addressing long-term economic challenges such as low productivity, low business investment, regional inequalities, and financial insecurity. Cites data from Capital Markets Industry Taskforce showing UK pension funds are underweighting domestic equity markets by 40%. Proposes consolidation of private defined-contribution market and local government pension scheme to improve governance, lower fees, and deliver higher returns.
Matt Rodda
Lab
Agrees with Callum Anderson that there is a growing consensus in the pensions industry regarding consolidation. Supports the Bill's proposal for a comprehensive value-for-money framework to guide DC consolidation.
Alex Brewer
LD
North East Hampshire
Highlights pension and post-retirement financial concerns in his constituency, citing constituent support for transparency from pension schemes to empower local growth. Supports transparency as a key incentive for sustainable investment.
Kirsty Blackman
SNP
North East Fife
Argued that auto-enrolment was a significant intervention by the government in pensions. Discussed the value for money aspect of the Bill, noting concerns about the lack of requirement to publish regulations in draft form. She also expressed disappointment at the absence of measures on adequacy and proposed more comprehensive approaches like mid-life MOTs.
John Grady
Lab
Glasgow East
Spoke in favour of the Bill, emphasising its importance in ensuring good outcomes for pension savers. He discussed the shift from employer to employee risk and highlighted the need for a focus on overall value and better returns through diverse investments.
Kit Malthouse
Con
N West Hampshire
The hon. Gentleman raises concerns about illiquid investments, mentioning the collapse of Neil Woodford's fund due to high risk and lack of liquidity. He questions who will bear the financial responsibility if mandated to invest in such assets.
Lincoln Jopp
Con
Spelthorne
The hon. Member discusses part 3 of the Bill, sharing his experience as a director attempting to launch a pensions superfund but facing regulatory challenges and vested interests. He argues for addressing capital requirements disparity between superfunds and insurers, suggesting measures like applying a lower confidence level threshold, creating matching adjustments, extending VAT exemptions, and allowing structured capital instruments. Jopp requests stricter time limits for Pensions Regulator's licensing process to facilitate market growth.
Rachel Hopkins
Lab
Luton South
The hon. Member declares her interest in various pension schemes but does not provide a substantial position or critique on the Bill beyond acknowledging its potential benefits for workers like herself with multiple pensions.
Stratford-on-Avon
Welcomes some reforms introduced by the Bill but is concerned that it does not go far enough in protecting vulnerable pensioners. Raises issues such as the Midland bank pension scheme clawback and the treatment of widows and widowers of police personnel upon remarriage or cohabitation, urging for consistency across the UK.
Poole
Supports creating a system with fewer and bigger pension funds but stresses that it must ensure decent income in retirement. Raises concerns about climate change and divestment from planet-wrecking industries, highlighting UK pension schemes holding around £88 billion in fossil fuel companies.
South Devon
Asks Neil Duncan-Jordan if there is an opportunity to do something transformational for local communities by enabling funds, particularly local government pension funds, to invest in much-needed infrastructure like care homes and high streets.
Final Member
Party Not Specified
Not specified
Called for the Government to legislate to provide inflation protection on pre-1997 benefits and give the Pension Protection Fund greater flexibility. Emphasised that a progressive Labour Government should be proud of using workers’ pension funds to build social housing and invest in green technology.
Peter Bedford
Con
Mid Leicestershire
Stressed the importance of cross-party cooperation on pensions legislation. Highlighted that the current auto-enrolment rate is inadequate, with millions heading towards retirement without sufficient income. Advocated for improving financial education and engagement in pension savings.
Kirsty Blackman
SNP
Not specified
Asked Mr Bedford to agree on making it easier for people to understand what a defined-contribution scheme pot means in retirement, advocating for clarity regarding monthly or annual income derived from such pots.
Kit Malthouse
Con
Hammersmith
Agreed with Mr Bedford's concerns about financial education and the implications of pension adequacy given demographic changes. Noted that the number of workers per pensioner will plummet to below three by 2070, stressing the need for better private provision.
Jayne Kirkham
Lab/Co-op
Truro and Falmouth
Expressed concerns about the consolidation of Local Government Pension Schemes into larger pools. Highlighted that Cornwall’s pool was effective in making local investments, including clean energy projects. Emphasised the importance of maintaining local influence over responsible investment policies.
The scheme worked well in Cornwall and provided good results. The local government pension scheme allowed for flexibility, which resulted in the construction of houses that local people live in and work at. However, there is concern over the new Bill's potential to limit this freedom.
Blake Stephenson
Con
Mid Bedfordshire
Concerned about Government-led interventions rather than market-led growth. Suggests that trustees need protection from safe harbour provisions if they are directed by the government to invest in certain assets which might perform less well compared to alternatives chosen by them independently.
Jim Shannon
DUP
Strangford
Welcomes regulation of private pensions, highlighting the importance of pension advice and the need for people to understand the value of their pensions. Concerned about tax implications that might affect pension contributions negatively. Emphasises the need for opt-out clauses to be clear and allows individuals to follow moral obligations.
Rebecca Smith
Con
South West Devon
Celebrates increased engagement in workplace pensions due to auto-enrolment introduced by Conservatives in 2012, but notes that review of pension values remains low. Aims to ensure the pensions market works effectively for people to get best returns on their savings.
Sarah Edwards
Con
Tamworth
Expressed expertise and concerns over the consensus in the debate, supporting principles while questioning specific measures like reserve powers and local government pension scheme changes.
Kit Malthouse
Con
North West Hampshire
Provided detailed arguments on both sides of the issue, showing support for certain aspects but raising concerns about potential conflicts with fiduciary duties and lack of clarity on regulatory details.
Kit Malthouse
Con
Asked for clarification on the opt-out provision mentioned in the Bill. He questioned whether trustees would have discretion or if they would need to seek regulator approval.
Andrew Western
Con
Clarified that trustees cannot make a decision to opt out at their discretion; instead, they must apply to the regulator with evidence. He welcomed support for the Bill regarding value for money and small pots.
Andrew Western
Con
Discussed the importance of giving savers better advice and protections while also noting that many pension schemes already make investments in social housing. He welcomed comments on the Bill's impact on value for money changes.
Andrew Western
Con
Welcomed support from other Members regarding the need to give savers better advice and protections, as well as opportunities to deliver further investment in the economy. He also supported pension schemes making investments in social housing.
Andrew Western
Con
Addressed concerns about the adequacy of pensions by emphasising that Members across the House care deeply about this issue and are eager to ensure constituents receive proper support. He also mentioned that trustees ultimately decide on any surplus release balance.
Andrew Western
Con
Acknowledged questions regarding investment flexibility and the importance of individual choice in pension funds while noting a consultation on UK sustainability reporting standards is underway. He also thanked Members for their contributions to the debate.
Government Response
The Bill includes a reserved power that will allow the Government to require larger auto-enrolment schemes to invest in wider assets, reflecting industry calls for change. The Minister assures that while he does not intend to use this power currently, its existence provides clarity to the industry that change will come. He also emphasises safeguards prioritising savers' interests and discusses measures against fragmentation within providers. The Minister responded to various MPs, emphasising ongoing efforts for pension dashboards, addressing specific issues such as automatic appointments and trustee powers. He also clarified that trustees remain in control of surplus releases and provided reassurances about superfunds, PPF updates, and the extended definition of terminal illness. Outlines plans for multi-employer collective defined-contribution schemes and the next phase of the pensions review focusing on pensions adequacy. Emphasises the importance of a holistic view regarding pension contribution rates, employer roles, and tax relief. Welcomed broad support for the Bill, acknowledged concerns raised by Members and emphasised the need to address fragmentation in the pensions framework. Reassured that no cross-subsidising will occur due to changes made by the Bill and expressed confidence in trustees adhering to their fiduciary duties.
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Assessment & feedback
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