Pension Schemes Bill

James Wild Excerpts

Wednesday 3rd December 2025 Commons Chamber

[Torsten Bell]

The hon. Member brings me back to the part of my speech I was coming to. The direct, quick answer to her question is that I would envisage taking powers in primary legislation and then consulting on the statutory guidance relating to the powers provided to the Government. That is the order in which I would think about it, but, exactly as she has asked for, I will endeavour to provide more clarity on the timeline.

As I said, I think there is good support for such a change across the industry—actually, I heard calls for it long before I became Pensions Minister—and it is time that we get on with setting out more details and providing that clarity to trustees so that, rather than debating whether trustees have the ability to invest with these longer-term structural or systemic factors in mind, they can get on with doing so, if they so wish. I should say that this is about giving trustees that ability and not specifying that they must do so.

I hope I have usefully set the scene for the debate. Let me close my opening remarks by reiterating my thanks to everyone who has engaged with the Bill so far. I look forward to hearing hon. Members’ further contributions this afternoon.

[James Wild (North West Norfolk) (Con)]

Before speaking to new clauses 24 and 25 and amendments 14, 15 and 16, I shall begin by reiterating the position adopted by my hon. Friend the Member for Wyre Forest (Mark Garnier), the shadow Economic Secretary to the Treasury—he is not here today, as the Minister acknowledged—which is that we support many of the planned changes in the Bill because, fundamentally, we all want a pensions system that is more accessible to the average person and gives all our constituents dignity in retirement. We want to see a Bill that helps make the system work better, and some of its measures will undoubtedly do that.

Equally, the higher-tax Budget, of which the Minister was a controlling mind, is relevant. We know from media reports that he feels passionately about the Budget—he used industrial language that is perhaps more expected from industry than from a think-tanker, and it is certainly not for the Chamber. We also know that, because of the briefings that appeared in the press, hundreds of thousands of people drew down their pensions prematurely, damaging their savings income as a result. The Budget also increases taxes on pension contributions. Taxing people’s incomes, savings and pensions more is the wrong political choice.

There is much in the Bill that we agree with, but some fundamental issues remain. Arguably the most pressing issue is the fact that the Bill does not address pensions adequacy. Research from Pensions UK shows that over 50% of savers will fail to meet the retirement incomes set by the Pensions Commission. The simple, uncomfortable truth is that this will affect millions of people, and that is despite the introduction of auto-enrolment and the triple lock introduced under the last Conservative Government.

The Bill was an opportunity to do more, but it does not currently do so. We are therefore giving the Government another chance through new clause 25, which would require the Secretary of State to conduct a review within five years and to recommend further measures. We recognise that the second phase of the pension review is ongoing, and we have faith in Baroness Drake to lead that review, but we have concerns that it will not report until 2027. We maintain that this part of the pensions review should be fast-tracked, so could the Minister at least clarify in which quarter of 2027 we can expect that report to be published?

Amendment 14 would change the wording on the eligibility conditions for new entrant pathway relief back to the form it was in when the Bill was first introduced. This means that schemes would qualify for relief if they simply demonstrated strong growth potential and an ability to innovate. All of us on these Benches understand the economies of scale and agree on the need for them, but we have concerns about the changes to the eligibility requirements. The benefit of the existing market is that its diversity provides choice, creates competition and incentivises innovation. As it stands, though, the Bill will disadvantage niche or boutique funds. Specifically, if the amendment made in Committee is enacted, existing companies that previously qualified for the pathway will now be excluded.

An example is Penfold, whose workplace pension was launched in 2022 and has grown quickly to over £1 billion of assets under management, tripling the rate since the start of 2024. Even with this trajectory, the timing of the scale test gives insufficient time to reach the £10 billion threshold for the transition pathway. We therefore agree with the chief executive officer of Penfold when he said:

“The original drafting created the scale that everyone agrees is vital, while still leaving room for challengers to innovate without the threat of a hard scale deadline that deters private investment”.

He is right. These are exactly the type of businesses that the Government should be supporting.

I shall turn now to the issue of indexation to pre-1997 pensionable service. We all want pensioners to have dignity in retirement, but when people have done the right thing by putting money in their pension and it is not followed through, that does not give pensioners the dignity they deserve. The issue around the pre-1997 indexation is also time-sensitive, like the infected blood scandal, and the longer the can is kicked down the road, the smaller the problem will become, sadly. We therefore broadly welcome the Minister’s commitment to taking primary powers through Government new clauses 31, 32 and 33. Our new clause 24 was seeking to achieve a similar outcome.

We pay tribute to the lobbying from groups including the Pensions Action Group and the Deprived Pensioners Association. Also, my hon. Friend the shadow Economic Secretary to the Treasury wanted to acknowledge our right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) for his continued representations on this issue. The Minister has already been pressed by a number of Members about the concerns of organisations, such as the Esso Pensioners Working Group, that want to understand further how the Government will ensure that these groups are not forgotten.

Finally, I want to turn to the part of the Bill with which we have our most fundamental disagreement: namely, the part that deals with mandation. Amendment 15 would prevent the use of the reserve mandation powers until the Government produced a report on the reasons why the powers were needed and the effects of the use of such powers, and resolved any issues raised in that report. It simply asks the Government to undertake an analysis of the barriers that pension funds are facing, rather than rushing to use mandation as perfectly reasonable. Amendment 16 would remove the power altogether.