Pension Schemes Bill

Baroness Scott of Needham Market Excerpts

Tuesday 3rd February 2026 Grand Committee

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Noakes, who always throws out good challenges. I welcome the opportunity and hope that I can persuade her with the answers I am about to give.

Let me say at the start that the Government’s objective is clearly to move to a market of fewer, larger providers so that savers can benefit from better governance, greater investment sophistication and lower costs. The measures in the Bill, together with the review and the regulation-making powers in Clauses 42 to 44, are carefully calibrated to reduce fragmentation or preserve the scope for innovation if and where doing so demonstrably serves members’ interests. That is the key.

I accept that much of the fragmentation is a product of history, but we have seen, in the pensions investment review and the responses that came back to the consultation, that master trusts are creating multiple default arrangements. We do not want to see the same issues arising over time as exist in GPPs, where members are in too many default arrangements that do not offer value. The point I would make to the noble Lord, Lord Palmer, and the noble Viscount, Lord Younger, is that this is about members’ interests and returns for members. We are trying to address the multiplicity of default arrangements that do not serve members because they offer poor value.

Amendments 168 to 170 from the noble Baroness, Lady Noakes, would aim to broaden—

[The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)]

My Lords, the Division Bells are ringing. The Committee will therefore adjourn for 10 minutes.

[Baroness Sherlock (Lab)]

I was going so well; I was in full flow.

--- Later in debate ---

[Baroness Noakes (Con)]

My Lords, Amendment 175 is a probing amendment about the best interests test, which is a part of the power to make unilateral changes to FCA-regulated pension schemes in Chapter 5 of Part 2 of the Bill. I am grateful to the noble Baroness, Lady Bowles of Berkhamsted, for adding her name to this amendment.

The FCA requires the firms it regulates to comply with a consumer duty, which means that firms must act to deliver good outcomes to retail customers—in this case, those within pension schemes. The duty was introduced after a long period of consultation and is intended to replace a lot of rules-based consumer protection measures. This Bill, on the other hand, goes in the opposite direction by requiring the FCA to layer some specific rules in relation to the best interests test on top of the consumer duty.

My amendment, in effect, asks the simple question of how the best interests test relates to the consumer duty. In what ways does it differ from the consumer duty? If there are differences between the two, the Government need to be clear about what they are. Alternatively, they need to require the FCA to make it clear what the differences are, and the Bill does neither. Can the Minister say why achieving better outcomes for the members affected by the unilateral change is necessary? For example, if members are being transferred to another scheme using the power in new Section 117B, why is it necessary to go beyond good outcomes?

In addition, transferring members who will be better off, while leaving behind those who are no worse off, may mean that over time some groups will be stranded in uneconomic schemes because they are the last man standing. How does the Minister think that this will work if there are several transfers over time and each taken in isolation was better for some but no worse for others, but cumulatively there is a detriment for those left behind? In practical terms, how is this meant to work in practice? I beg to move.

[The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)]

I inform the Committee that if this amendment were to be agreed to, I cannot call Amendment 175A for reasons of pre-emption.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I support the general issues that the noble Baroness, Lady Noakes, has raised. Of course, if this whole clause were deleted, the amendment that I am seeking in addition would disappear.

I want to speak to my amendment which is about new Section 117D(2), which says:

“The best interests test”, in relation to a unilateral change, is that it is reasonably likely that effecting it will”,


change. I do not like the words “reasonably likely”. We have to examine what “reasonably likely” means in legal terms.

Reasonably likely is a threshold of probability that is lower than the civil standard of “more likely than not”. More likely than not means above 50%, so reasonably likely means less than 50%. Having “reasonably likely” means that lower than 50% might have a better outcome, which is unacceptable. I find it hard to believe that that is what is intended. When you look at a phrase such as “reasonably likely”, you would think that the reasonable is somehow enhancing the likeliness, but in legal terms it is not. It is taking away from it. Therefore, I hope that that can be looked at and that the Government will address that issue.

--- Later in debate ---

176: Clause 49, page 68, line 4, leave out subsection (3)
Member’s explanatory statement
This is a probing amendment which seeks to test the definition of “default pension benefit solution”.

[The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)]

I should inform the Committee that, if this amendment is agreed to, I cannot call Amendment 177 for reasons of pre-emption.

[Viscount Younger of Leckie (Con)]

My Lords, it is a pleasure to speak to this group of amendments on guided retirement. Perhaps I should begin by saying that we welcome the direction of travel set out in the Bill in this area. The Minister will perhaps be pleased to hear that.

Poor outcomes at decumulation have long represented one of the most persistent weaknesses in the defined contribution system, and there is a strong and widely accepted case for providing better support to savers who do not or cannot make active and confident choices at the point of retirement. We will continue to engage constructively with the Government to ensure that these reforms succeed. However, their success will depend not on intent alone but on whether the framework is workable in practice, sufficiently clear in its operation and properly aligned across regulatory regimes. It is in this constructive and probing spirit that I have tabled Amendment 176, together with clause stand part notices on Clauses 49, 50, 51 and 57, which I will take together for the sake of brevity.

Amendment 176 seeks to probe the definition of a default pension benefit solution, and in particular how such defaults will be framed in practice. The Bill recognises, rightly, that default solutions will not be suitable for everyone, and it therefore requires trustees to consider members’ circumstances, needs, interests and characteristics when designing them, including the possibility of different defaults for different cohorts of members. That principle is sound, but it immediately raises an important practical question: how, in reality, are trustees expected to carry out these assessments in a consistent, proportionate and defensible way?

Pension Schemes Bill

Baroness Scott of Needham Market Excerpts

Committee stage
Monday 19th January 2026 Grand Committee

Northern Ireland and Welsh legislative consent sought, Scottish legislative consent granted. Relevant document: 42nd Report from the Delegated Powers and Regulatory Reform Committee

[The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)]

Before I call the noble Lord, Lord Davies, I point out to the Committee that there is an error on the Marshalled List, in that Amendment 30 is to Clause 10 and not Clause 9, as it says here. It makes no practical difference to the debate, but it will do when we call the amendments later.

Clause 9: Power to modify scheme to allow for payment of surplus to employer

Amendment 23

Moved by

Universal Credit Bill

Baroness Scott of Needham Market Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 22nd July 2025 Lords Chamber

[Baroness Scott of Needham Market (LD)]

My Lords, I have a long-standing interest in ME—chronic fatigue syndrome—having seen at first hand its awful impacts on people’s lives. It is good to be able to say something this evening, because today we saw the publication of the long-awaited delivery plan on ME. It is very welcome to see that. The Ministerial foreword says that we need

“a better understanding of the condition”.

I think patients with ME would certainly agree.

For context, an estimated 400,000 people in the UK are living with ME, and around a quarter of those are disabled to the extent that they spend most of their lives in bed. The remainder have symptoms on a very wide spectrum. As we heard from the noble Baroness, Lady Brinton, it is estimated that around 381,000 people have serious post-viral symptoms that have lasted for more than two years as a result of long Covid. Long Covid is not the same as ME, but there are some similarities.

The sad truth is that for many people ME is a lifelong condition. Its severity and impact vary enormously, not just between individuals but for the same individual, both over the long term and as part of a pattern of symptoms in the short term. Flare-ups are common, relapses occur, and it is entirely unpredictable.

For claimants, that means tasks that can be completed on some days cannot be completed on others, or simply cannot be sustained. I had a look at the training module for assessors, which says, “This training will take you approximately 30 minutes to complete”. The training is not bad, but I suggest to the Minister that 30 minutes is wholly inadequate to train an assessor in determining the condition of someone who is presenting such a complex set of conditions.

The delivery plan, which I referred to, says that we need

“to ensure that … the right decisions are made the first time”.

Amen to that, but the briefing from Scope tells us that around 49% of universal credit decisions reaching appeal are overturned. I cannot help but wonder whether that is related to the level of training on the part of the assessors. It would be very good if the Minister could say a word or two about that.

From April next year, new claimants will get a reduced limited capability for work rate, even if they have the most severe form of ME. Although it is lifelong and often seriously disabling, because it fluctuates and has an uncertain prognosis, many people will simply fail the “severe, lifelong condition” criteria. Many will not reach the strict “no improvement expected” test and thus will be locked out of the enhanced support.

Current regulations refer to

“the majority of the occasions on which the claimant … attempts to undertake the activity”.

The new regulations refer to “all occasions”. That is highly problematic for anyone with a fluctuating condition. I am talking this evening about ME, but we have heard from many other organisations and from individuals who have fluctuating conditions.

Freezing for four years means that disability support will not rise with inflation while other basic costs such as food and energy keep rising. It is a fact that many ME patients carry on working—life is tough, but they do it—and there are many others who aspire to work. They want to recover enough to one day go back to work, but it is complex and unpredictable. Their general health and well-being are key if they are to get back to work. Being pushed into poverty by measures in the Bill and by other measures will simply further disadvantage people with this condition.

Although not in the Bill, there is consultation on removing the health element of universal credit for under-22s. That is causing widespread concern, particularly among families and carers of young people with ME. The median onset age for ME is 15.

I agree with the comments made by Steve Darling, my colleague in the House of Commons, that the key to achieving the Government’s aspirations for welfare reform is genuine engagement with the people affected. I say to the Minister that, from reading the briefings from the organisations, it is very clear there is a huge gulf between the picture that she has painted today and the understanding of the organisations, and, perhaps even more importantly, the testimony from many hundreds of people who are now desperately worried about what the future holds for them. We need collectively to do much better to offer them not just a financial leg-up but some reassurance that we have their back.