A golden opportunity to improve outcomes for UK pension savers

There is appetite in Whitehall for far-reaching reforms to UK pensions policy. The Chancellor set the ball rolling in his speech at Mansion House on 10 July. The DWP then issued a wave of responses to existing consultations, new consultations and calls for evidence, with two key themes:

• Better returns and member outcomes are to be expected if pension schemes invest more in “productive finance” assets
• This would be more likely with fewer, larger schemes – both defined benefit (DB) and defined contribution (DC)

The Chancellor laid out three golden rules that he says will guide policy decisions:

• Improve member outcomes
• Maintain resilience of the gilt market
• Strengthen UK competitiveness in financial services

This presents the opportunity for fresh, bold thinking on pensions. At WTW, we are fully vested in leading the way with innovative, creative and well thought through ideas that could improve outcomes for pension savers. In July, ahead of the Chancellor’s Mansion House speech, we released a white paper, Six changes to seize the DB surplus opportunity, in which we suggested policy changes that would facilitate access, with the right checks and balances, to ‘trapped surplus’ within DB pension schemes – unlocking an opportunity to use the capital more productively for the benefit of employers, members, employees, and the UK economy.

In this paper, we set out and explain our perspective on the key points that should underpin policy reform, across DB and DC pensions.

We set out further commentary supporting these views in the remainder of this paper.

Our full paper is available for download below, as well as individual sections that you can choose from.