Pension Schemes Bill

Jim Shannon Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to speak on this Bill. Pensions and the regulation of private pensions are increasingly of national interest. I believe that regulation is needed, so I welcome the Bill. Obviously the small print will become more apparent during its passage, but it is good that we are introducing the Bill.

The Government’s intention of ensuring that people have a private pension to supplement their income when they eventually reach retirement is increasingly being realised. By and large, most young people—22 million, I understand—have a pension. The Minister will remember the story I told him about when I was 18. I think I am right in saying that I am the oldest person in this Chamber, so that was not yesterday. The fact is that pension advisers were almost unheard of then. I will tell hon. Members who the best pension adviser I ever had was: my mum. When I was 18, she took me down to the pension man in Ballywalter. She said, “You need a pension.” I said, “Mum, I’m only 18. What do I need a pension for?” She said, “You’re getting a pension.” We know how it is: our mum tells to do something, and we just do it, so I got a pension on her advice.

I ended up with four pensions over my working life, which were all beneficial. I did not understand the value of them until I came to the stage at which I was going to cash some of them in—I realised the value of them then. Today, we have an opportunity to advise young people of the need for a pension. When it comes to pensions, not everybody has my mum, but everybody has somebody, or an equivalent through Government.

Let me give a quick story about my office staff. I employ six ladies and one young fella. They are in their 20s, 30s, 40s, 50s and 60s. I will not get into trouble by naming the staff in each bracket, but their approach to their pension varies by age bracket, and that is a fact; they see it differently. Listening to their discussion highlighted to me the need to educate people on the importance of paying into their pension, because it is so important that we get this right. That is why the Bill is important: it is an opportunity to advise people.

One member of my staff has two children at primary school. She highlighted that she was paying an additional 5% into her pension on the advice of her older colleague, only to find that the tax on her savings this year meant that she actually had less money in her account each month compared with last year. The first thing to go was not the kids’ piano lessons or hockey camp—she said that those experiences shaped her children’s memories. The first reduction was scaling back on her pension additions. People might say, “My goodness me! That was not necessary,” but actually it was, if she wanted to preserve that lifestyle for her children. It seems that the tax on savings means that one mum has made the choice to stop supplementing her pension, and to instead sow the money into her children’s lives just now. That is not the aim of the Government or the Minister, but there is only so much that we can tax the middle class before they make cuts that are not in their best interests.

Apart from a number of clauses, this legislation does not directly affect Northern Ireland, but it should be noted that accompanying legislation and a number of legislative consent motions—statutory instruments—will come to this Chamber that will change the pension schemes in Northern Ireland. Ultimately, what we discuss here and what happens through this Bill will come to us in Northern Ireland, and the Northern Ireland Assembly will bring provisions in Northern Ireland in line with those here. I have therefore considered carefully the aims of this legislation, and whether I believe it will be effective in achieving those aims. The Minister has said that this Bill will fundamentally

“prioritise higher rates of return for pension savers, putting more money into people’s pockets in a host of different ways. For the first time we will require pension schemes to prove they are value for money, focusing their mindset on returns over costs and protecting savers from getting stuck in underperforming schemes for years on end.”

When we look at the issues, we understand the necessity for the Bill.

In his introduction, the Minister referred to 13 million small pension pots floating about in the UK pension system, with £1,000 in each. It seems logical to have a better pension system for people—I think it does, anyway, and maybe we all do. It is essential that the opt-out is iron-clad, and I will give a reason why. One of my office staff members would not be comfortable with her pension paying into any companies that test on animals, for example. Another has said that she wants the highest return, full stop, so we must ensure that the Bill enables people to follow their moral obligations as well as get a return on their work. I am concerned that consumers will be tied down and face difficulty in leaving pots, which is something that must be addressed. With that in mind, I welcome this Bill to regulate the pension market, but we must ensure that it does not become a mechanism for Government to control the private pension industry and direct pension pots into Government investment. We must ensure that this Bill simply protects pensioners, and I very much look forward to watching its progress.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.