Pensions: Automatic Enrolment Reviews
Torsten Bell Excerpts(2 days, 5 hours ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Pensions (Torsten Bell)
Automatic enrolment has transformed workplace pension saving for millions of workers. However, despite this success, the Government recognise that millions are still under-saving for their retirement. That is why we have revived the landmark Pensions Commission to finish the job we started 20 years ago. The commission will examine why tomorrow’s pensioners are on track to be poorer than today’s and make recommendations for change, with the final report due to be published in early 2027.
Automatic Enrolment Earnings Trigger and Qualifying Earnings Band Review 2027-28
It is against the backdrop of the commission’s work that I have considered and completed this year’s annual statutory review of the automatic enrolment thresholds, which are the earnings trigger and lower and upper earnings limits of the qualifying earnings band. The main focus of this year’s annual statutory review has been to ensure the continued stability of automatic enrolment for employers and individuals, particularly during the ongoing work of the Pensions Commission, which is looking to the future.
I have therefore concluded that all automatic enrolment thresholds for 2027-28 will be maintained at their 2026-27 levels.
The 2027-28 Annual Thresholds:
The automatic enrolment earnings trigger will remain at £10,000.
The lower earnings limit of the qualifying earnings band will remain at £6,240.
The upper earnings limit of the qualifying earnings band will remain at £50,270.
The alternative quality requirement triennial review 2026
In accordance with the statutory timetable, we have conducted a review of the regulations which introduced the alternative quality requirements for pension schemes being used for automatic enrolment into workplace pensions.
This review concluded that the alternative quality requirements for UK defined-benefit schemes set out in regulations, made under section 23A(1) of the Pensions Act 2008, should continue to remain in place without changes at this time.
The review also concluded that the tests set out in section 28(2A) of the Pensions Act 2008 continue to be satisfied.
The analysis supporting the thresholds review and the Government response to the call for evidence for the alternative quality requirements reviews will be published and copies placed in the Library of the House. They will both be available on the www.gov.uk website following publication.
[HCWS444]
Equitable Life Policyholders: Compensation
Torsten Bell Excerpts(2 weeks ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Secretary to the Treasury (Torsten Bell)
It is always a privilege to respond to a debate under your chairmanship, Ms Furniss. Let me start by thanking my hon. Friend the Member for Leeds North East (Fabian Hamilton) for opening the debate. He was referred to as a limpet earlier, but he has been more proactive than that in his campaigning on this issue over the years. It is an important issue to him and to lots of other hon. Members. I should echo the point he made at the beginning about the right hon. Member for Goole and Pocklington (David Davis), who is not in the Chamber but who has been focused on this issue for a long time. Members have campaigned on this issue with tireless energy and kept the issue in the spotlight.
I want to reflect on some of the astute points that several hon. Members made. The truth is that it is not possible to restore trust entirely—certainly, not in the firm that was involved in this among the people affected, but also probably in the regulator, but hopefully Members’ campaigning has restored trust in local representation and the campaigning energy of local representatives.
The issue is even more important to the thousands of Equitable Life savers who were affected. The point, which was well made by the hon. Member for Christchurch (Sir Christopher Chope) and others, about the human effect is one that I am sure everybody in this Chamber has at the front of their mind. Those affected included my grandfather, and I have met lots of other constituents who were members of the mutual before it disappeared. I have also met with the action group, which many hon. Members have also met with. We have all heard about the kinds of human impacts that hon. Members have set out well today.
On the big picture, several hon. Members, including my hon. Friend the Member for Leeds North East and my hon. Friend the Member for Bracknell (Peter Swallow) talked about the importance of people having trust in pensions. This is a particular part of the pension system, but the point also applies to the entire pension system. That is something I take very seriously indeed as the Pensions Minister. I was up in Liverpool at the Pensions UK conference last week talking in those exact terms about how our task is to make sure that we address what is today, if we are honest, too low a level of trust in pensions. That is true of both state and private pensions. It is our job to rebuild that trust. That includes how, in some parts, pension scams are on the rise—my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) raised that.
Obviously, the Financial Services Compensation Scheme now exists, in a way that it did not in the period that we are talking about, when we are talking about pensions operating within the contract-based part of the pensions system. That is a big change, and it is compensation paid not by taxpayers, but by the financial services industry itself. That is the answer to the specific question posed by the hon. Member for Christchurch about what happens when the regulators or, more importantly, the providers fail. The answer is that there is a compensation scheme, although we are here because there was not a compensation scheme in place—and it has caps in terms of the compensation due.
I will make some progress on the specifics of this case. Hon. Members will be aware this is a topic that has been well documented and explored over the years—the hon. Member for St Ives (Andrew George) set out the role of the sabbatical for him in the period in which that has taken place. The Equitable Life payment scheme was established to make payments to eligible policyholders where maladministration had been found. That maladministration contributed to some savers suffering a relative loss totalling £4.1 billion. Relative loss was defined as the difference between the value of the policyholder’s funds with Equitable Life and what they would have received if they had made a comparable investment elsewhere. I am merely pointing out that that is not a cash loss; it is a loss relative to a counterfactual of having invested in a different but similar product.
That approach followed the 2008 parliamentary ombudsman’s report into the collapse, and was the foundation of the payment scheme. In 2010, the Government of the day accepted the ombudsman’s findings and chose to allocate in the region of £1.5 billion —the quote from the Chancellor at the time—to make tax-free payments to eligible policyholders in respect of the reduced returns that they received from their investments. That Government chose what they saw as the correct balance of interests between the interests of the affected policyholders and taxpayers. That is the choice that was made. I am obviously fully aware that, as we have again heard today, people are dissatisfied with that £1.5 billion and suggest that the issue should be reopened.
It is not for me to defend the decisions made by the then Conservative and Liberal Democrat coalition Government. To be fair to the hon. Member for Richmond Park (Sarah Olney), she came closest to doing so today, but other colleagues chose not to—[Interruption.] The hon. Lady chose to defend the decisions of that Government to some degree and others obviously did not. The balance of opinion in this Chamber is that the then Government made a mistake in the size of the compensation that was allocated. It is not for me to make that case, but were they here to do so, they would say that decisions need to be fair to taxpayers as well as policyholders, and they would point out that there is a wide range of people responsible for the disaster that we saw in Equitable Life, including those who were responsible for the firm through that period in the 1990s when very reprehensible actions took place.
Richard Fuller
The Minister is making the case that the position when that settlement was made about balance between taxpayers and policyholders was a matter of fault and responsibility. Does he not also recognise that a substantial part of that balance was to do with the state of the public finances? Will he confirm that that is still a live consideration in the Treasury that could in future lead to the settlement being reopened?
Torsten Bell
I will come to the hon. Gentleman’s last question towards the end of my remarks, but on his first point he is absolutely right to say that the then Government’s key consideration—when I referenced taxpayers—was the public finances. That is the point being made. That was the key driver in the decision by the then Government about how much money to allocate, rather than trying some kind of specific accounting for the impact of the maladministration per se.
Ministers at the time also noted the consistency of their decision with the ombudsman’s report—we have discussed a bit of that today—and the ombudsman subsequently wrote on this issue to the all-party parliamentary group, which I think several hon. Members present have been part of, confirming that the then Government’s decisions
“cannot be said to be incompatible with the report.”
As hon. Members know, following representations from groups such as the Equitable Members Action Group, the Government prioritised those acknowledged by all parties to be the most vulnerable—the with-profit annuitants. They received 100% of their losses. That meant that, of the £1.5 billion, £725 million was allocated to with-profit annuitants, to be paid annually over the duration of the annuity, which continues to this day. That included the £100 million contingency fund—that is the answer to the question put by the hon. Member for Strangford (Jim Shannon)—to ensure that the provision for the annuitants, should they live longer than expected, was there. That is obviously a standard actuarial process; it is what sits behind the regulation of the insurance sector when annuities are being sold. The remaining £775 million was allocated to be paid as lump sums to with-profits non-annuitants holding other products.
As for the details of how much has been spent, I can provide answers to the questions put by several hon. Members. As of 30 September 2026, the total value of payments made by the scheme was almost exactly £1.4 billion—it is just short of that figure—and that is an increase on the previous figure that the hon. Member for Christchurch cited.
I note the references in this debate to the pre-1992 with-profit annuity holders. The coalition Government excluded them from the scheme, not because they had not suffered real impacts from the collapse of Equitable Life—I think the then Government recognised that they had suffered real impacts—but because their purchase of those annuities, which is the point at which someone locks into the decision in the case of an annuity, was outside the period of maladministration, so the Government would have struggled to find a locus to make a payment in the terms of a scheme, because there was no maladministration to tie a payment to. Again, it is not for me to defend that Government. However, if they were here today, that is how they would explain the decision that was taken. That is why the 2013 decision, which was referenced by the then Government, to provide separate, tax-free ex gratia payments was the way in which the previous Government chose to proceed.
The scheme has now been fully wound down; it was closed in 2016 by the then Conservative Government. That is now over a decade ago. I suspect that hon. Members know that I cannot give all of them, or indeed all the impressive campaigners on this issue, the answer that they would like—a straight “more compensation”. I suspect that hon. Members know that that is the case. However, I want to give them what I think is the next best thing, which is a straight answer, and it is the direct answer to the question put by the hon. Member for North Bedfordshire (Richard Fuller), the Opposition spokesperson. It is that there are no plans to reopen the previous policy decisions taken by the previous Government. The previous Government made decisions given the public finances at the time. Those decisions were debated by that Parliament—some Members present were part of that Parliament, and the rest of us respect the decisions of that House.
The only part of the payment scheme in operation is the annual payments made to eligible annuitants. The scheme is on track to distribute the remainder of the funds allocated, as planned, on that basis. The right thing for this Government to do is to ensure that the ongoing payments to those eligible with-profit annuity holders—the group recognised, I think by all of us, to be the most vulnerable—continue to be made. I will finish by assuring them that the funding for those payments remains protected and again thanking all hon. Members who have spoken in this debate.
Gill Furniss (in the Chair)
Fabian Hamilton, you have two minutes in which to respond to the debate.
Benefit Entitlements: War Pension and Armed Forces Compensation
Torsten Bell Excerpts(3 weeks, 1 day ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Pensions (Torsten Bell)
I join other Members in congratulating the hon. Member for Eastbourne (Josh Babarinde) on securing this debate on an issue that I know he has championed passionately for some time. I also congratulate him on how he has gone about it, both today and over the past few years in which I have been engaging with him on the issue. Indeed, I think he first raised it with me a month into my time as the Minister for Pensions, when I met him and his constituents, including the late Staff Sergeant Pauline Cole, and members of his team. It was nice to hear him paying tribute to them today. They have obviously worked hard on this issue.
The hon. Member’s speech included a touching and fitting tribute to Pauline, who served our country and campaigned not only for herself but on behalf of other veterans. I was very glad to meet her and to have the chance of knowing how accurate the hon. Member’s description of her was, and again I offer my condolences to her family, who have continued to support the campaign that she championed. I have corresponded with at least one of her sons about this case.
As well as paying tribute to all our armed forces and veterans, I want to acknowledge the work that the Royal British Legion does on their behalf, working to promote and secure the welfare of veterans, campaigning on issues involving armed forces personnel such as the one we are discussing today, and securing a wider recognition of what our armed forces have given to this country. I should also recognise the work of veterans’ hubs beyond the Royal British Legion, including the one in Swansea, where I have discussed this and many other issues with veterans face to face.
The hon. Member has been a fierce and determined campaigner on this issue. He mentioned the first question that he asked during Prime Minister’s Question Time—always a stressful but meaningful moment for a new MP. He has also persistently raised the subject of the interaction between military compensation and the benefits system, and I note that his private Member’s Bill was reintroduced in the House today. I have listened to him and to others, including Members in the House today, and, as I am sure he knows, my colleague the Minister of State in the House of Lords met representatives of the Royal British Legion in November and discussed the matter.
Let me now turn to the long-standing policy issues in this area, and try to do justice to the matters that the hon. Member has raised. He is right to say that there is no single rule for how compensation payments are treated in the benefits system. Treatment depends on the nature and purpose of a payment, whether it is in the form of a regular income or a lump sum capital payment, as well as the legislation governing the relevant schemes. In pension credit, most income is taken into account, because the benefit is intended to top up the retirement income that a person already has. Pension credit is intended to do something different from any other element of the benefits system: to provide a guaranteed minimum level that our pensioners will always have to live on. During the 2000s, it drove the halving of pensioner poverty that was such a big feature of the previous Labour Government.
Pension credit rules already recognise veterans’ specific circumstances. As the hon. Member said, the first £10 of specified war pension scheme and armed forces compensation scheme income is disregarded. I should add—because this is important and it has not been discussed in the debate so far—that the armed forces independence payment and specific additions to the war disablement pension are disregarded in full, in recognition of the different nature of those payments. Lump sum payments under the armed forces compensation scheme are treated as personal injury capital, which can remain protected through a trust or annuity under the applicable rules. Those arrangements are more favourable than the treatment of other similar schemes with disablement elements. For example, the industrial injuries disablement benefit is taken fully into account for pension credit, and the fire and police service schemes also have no disregards applied.
However, I think that the centre of the hon. Member’s argument is the different treatment in respect of universal credit. That is the point that he dwelt on, so I will try to do justice to it. Universal credit was introduced with no partial disregards, which is what drove the initial change. Pension credit predates the introduction of universal credit and does retain the partial disregard structure that all the legacy benefits had. A more important point is that the two benefits serve very different purposes: one takes work incentives into account, while the other is intended to provide that minimum guaranteed income.
What is probably more relevant to this specific case is the fact that pension credit rates are significantly higher than the standard allowances in universal credit, because the House decided, in passing the legislation, that our aim was to more or less guarantee pensioners’ incomes up to a minimum level. Pension credit is also more generous in its treatment of capital: the first £10,000 has no effect on entitlement and, unlike universal credit, it has no upper capital limit. That is for the obvious reason that pensioners tend to have larger savings, and those savings provide other contributions to people’s income. By contrast, capital above £6,000 can affect universal credit entitlement, and that entitlement normally ends if somebody has over £16,000 of capital.
Comparisons with civilian personal injury compensation should be made carefully. I know why the hon. Member makes that point, but I want to be clear that lump sums paid under the armed forces compensation scheme are treated as personal injury capital, so they would be treated exactly the same as the payments that I think he said were more generous. That would not be the case; they would be treated identically. By contrast, ongoing war pension scheme payments, and guaranteed income payments under the armed forces compensation scheme, are income payments. That is the fundamental point on which there is probably disagreement. Comparisons can sometimes involve payments with different legal status, but they are not like-for-like payments.
The hon. Member has argued that pension credit and service-related compensation meet different needs—again, that was an important part of his speech today. I actually agree with him on that point, but I think I need to explain what that means. Pension credit is a means-tested income safety net, and it provides a guaranteed minimum income. That is why we take people’s other income into account when assessing eligibility and need. Pension credit operates in a totally different way from universal credit, which sets a level of support and then tapers that away as other income comes in. It is not really about double funding; it is about the level of support that the state provides in addition to the income that a person already has. That was the nature of how pension credit was introduced.
The hon. Member draws a parallel with the LGBT+ compensation payments. I hope that he will agree that the circumstances surrounding the Government setting up that financial recognition scheme are quite different and involve a different set of considerations.
More broadly, no one is ever going to say that everything about the benefits system is perfect—certainly not anybody who spent a long time working on it and trying to help people navigate it prior to coming into Parliament, and who, like all hon. Members, has helped their constituents to navigate it—but I will try to give an explanation of what sits behind the logic. I absolutely recognise that, as Pauline set out clearly, it feels like an arbitrary system to people.
Where there are lump sums or extra cost payments, those are disregarded within pension credit. Where there are regular payments that support income—one type of such payments is the focus of the debate and relates to how Pauline received her treatment—those are treated as income, and then the legislation requires us to partially disregard them. I appreciate that that is a technocratic explanation that does not do justice to Pauline’s individual circumstances, or to the circumstances of veterans with whom we all engage every day.
Josh Babarinde
In Pauline’s case, she did not choose whether to receive monthly instalments or a lump sum. If she had had a choice, she may have preferred a lump sum—first, because it was a big amount of money to do something with, and secondly, because she would not have fallen foul of the rules. Why should whether payments are disregarded be a lottery that is based on whether someone receives a lump sum or instalments?
Torsten Bell
Whether compensation is provided via income or lump sums is obviously part of the compensation schemes, but I would be happy to have a conversation with the hon. Gentleman about that. I do not know enough about the specifics of Pauline’s case to say how that would have played out, but it is the scheme rules, rather than the benefit system itself, that determine lump sum payments or ongoing payments.
More broadly, I just want to say that I absolutely hear the hon. Member’s arguments and have done so on a number of occasions. I have also heard them from Pauline and from her family. I hear his clear request for the Government to change the regulations, and I recognise the power of those arguments. He has asked a straight question. I think the most I can do for him is to give him a straight answer: the Government are not in a position to change the regulations. I am not in a position to give him the first answer that he would like tonight, but he at least deserves a straight answer. This is a long-standing position, for the reasons I have set out. It is about the consistency of how the benefit system deals with a very large and growing number of compensation payments, all of which have similar issues to the ones we are discussing.
Mark Sewards (Leeds South West and Morley) (Lab)
The Minister has given an incredibly detailed answer, and I agree that it is a straight answer to the arguments made by the hon. Member for Eastbourne (Josh Babarinde). Does he think that the system he has described will fall foul of the armed forces covenant?
Torsten Bell
The straight answer is that my hon. Friend’s question has been tested on a number of occasions and the answer is no, but the legal question is not sufficient. The question is this: what is the right thing to do and are we supporting our veterans? The legal answer to his question is yes, but that does not take away from the need to test that more broadly in the way that we are doing tonight and have done on other occasions.
Josh Babarinde
I thank the hon. Member for Leeds South West and Morley (Mark Sewards) for his point on the armed forces covenant. The DWP’s position in relation to the covenant has changed in the light of the Armed Forces Act’s new legal duties that the DWP will have to adhere to come January. What assessment has the DWP made of its obligations with respect to that change in the context of this pension credit disregard?
Torsten Bell
The answer to that is the legal position I have just set out, which is that the DWP does take that seriously, has considered it and is content that this is consistent with our obligations under the armed forces covenant. I think the hon. Member is trying to go beyond that to say that there are other things we should take into account, including arguments in this place, the position of veterans and the rest. However, narrowly on the legal question, the answer is yes. That has been tested, and our position is that it is consistent with the armed forces covenant. The fact that that is our position in no way undermines the powerful arguments that he has made and other hon. Members have supported, or those we have heard from our veterans, and I want to put that clearly on the record.
I should finish by emphasising again the Government’s deep-felt gratitude to our armed forces for their professionalism, bravery and dedication to duty, and to those in such a position previously. Veterans now represent large parts of all our communities, and we continue to honour them for the work they did while they were serving, but also for being active citizens supporting all kinds of work. I have mentioned the veterans hub in Swansea, where I see brilliant work being done by people day in and day out.
Question put and agreed to.
Oral Answers to Questions
Torsten Bell Excerpts(3 weeks, 3 days ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Brian Leishman (Alloa and Grangemouth) (Lab)
The Minister for Pensions (Torsten Bell)
We want all pensioners, including women born in the 1950s, to have the comfortable retirements they deserve. That is why we are delivering on our twin priorities for pensioners: raising the state pension, and rescuing the NHS. We are also delivering the largest ever pension credit take-up campaign, which is particularly important for low-income pensioners, a disproportionate number of whom are women.
Brian Leishman
More than 3.5 million WASPI women were affected by the change to the state pension age. Time is of the essence, because another WASPI woman dies every 13 minutes on average, without receiving fairness or justice. The Prime Minister personally assured the WASPI campaigners during the Makerfield by-election that he would meet them to discuss potential routes to redress. Can the Minister confirm what actions the Department is taking to support the Prime Minister in those discussions? Crucially, when will the meeting happen?
Torsten Bell
The Prime Minister and I opposed the 2011 acceleration of the state pension age by the coalition Government of the Liberal Democrats and the Conservatives, in particular because it gave some women as little as five years’ notice of changes to their state pension age. Those same women have faced disadvantage in the workplace and very uneven burdens of caring responsibilities. I have recently written to WASPI representatives to set out the Government’s position. With legal proceedings ongoing, further comment is not appropriate, but I continue to hear from and to speak to women affected by the accelerated increases in the state pension age.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
It is several years since the ombudsman reported on this matter. As I recall, the last Government agreed to accept the recommendations of the ombudsman. To echo the point made by the hon. Member for Alloa and Grangemouth (Brian Leishman), many of these ladies will be dead before they see any money at all. When will the Government stop messing around and do something?
Torsten Bell
I thank the right hon. Member for his question; I just do not agree with the tone in which he asked it. This Government have considered the case set out by the ombudsman and provided a detailed response. I am afraid that the previous Government did nothing of the sort—they did not say they would proceed with a compensation scheme. In fact, the reason the ombudsman laid their report before Parliament, rather than to the Government, is that it was clear where the last Government were going with this.
Sarah Russell (Congleton) (Lab)
Clive Jones (Wokingham) (LD)
The Minister for Pensions (Torsten Bell)
The Government’s reforms provide greater flexibility for well-funded defined-benefit pension schemes to share surplus with employers and to benefit members. Scheme trustees, who must act in the interests of scheme beneficiaries, are best placed to determine the appropriate use of any surplus for their individual scheme. Trustees will agree how members can benefit, working with sponsoring employers.
Clive Jones
Is it not the case that nothing in law stops the Government requiring pre-1997 pensions to be restored before surplus goes back to employers, and that the only reason it is not happening is that the Minister has decided that it should not?
Torsten Bell
I thank the hon. Gentleman for his question; he and I have met and discussed this issue on many occasions. Around three quarters of schemes already provide some pre-1997 indexation, but the hon. Gentleman is right to point out the strength of feeling on this. I have met with many MPs and scheme members, including those in south Wales who have been affected by lack of pre-1997 indexation on their defined benefit schemes. It is separate from the changes that we have already introduced for the Pension Protection Fund’s indexation.
Trustees need to be in the driving seat. Employers will have no direct access to a scheme’s surplus. The flexibilities we have put in place through the Pension Schemes Act 2026 and the guidance being provided by the Pensions Regulator are already changing the nature of the discussion between trustees and employers, and will lead to a step change in this area.
Mr Peter Bedford (Mid Leicestershire) (Con)
It did not sound as though the Minister could commit to improving outcomes for pensioners. That is no surprise given this Government’s record: they cut the winter fuel payments, undermined incentives to save into pensions through the salary sacrifice scheme, and dragged pensions into the scope of inheritance tax. The Prime Minister’s announcement at the Labour party conference created yet more uncertainty for those in or approaching retirement. Will the Minister give a commitment to the House that there will be no further policies undermining pensioners’ prospects and damaging their retirement?
Torsten Bell
Although I listened closely to much of the Conservative party’s conference—not quite all of it, but lots of it—I am still not clear what its policy is on the triple lock or on many other things in the pensions space. I have been paying a lot of attention, and what I have learned is that the shadow Foreign Secretary calls the triple lock a Ponzi scheme and the previous shadow Chancellor calls it completely unsustainable.
The shadow Secretary of State knows she has a ridiculous position on reform of the state pension. This Government will put the state pension on a sustainable basis and address the other big challenge of ensuring an adequate private pension system. That is what the Pensions Commission will do.
Euan Stainbank (Falkirk) (Lab)
Tom Rutland (East Worthing and Shoreham) (Lab)
Young workers are facing real challenges in their living standards, particularly because their housing costs dwarf those faced by the generations that came before them. That is leading many to reduce the contributions they make to their workplace pensions, or even to forgo making them entirely, at the risk of having inadequate pensions when they retire. Will the Pensions Commission make recommendations on how to address those challenges?
The Parliamentary Secretary to the Treasury (Torsten Bell)
My hon. Friend is absolutely right to raise the challenges facing younger workers. They face exactly the same cost of living challenges as the rest of society, but often with added pressure when it comes to housing. The good news is that between 2012 and 2025, participation among employees aged 22 to 25 who are eligible for automatic enrolment increased from 28% to 85%. He is completely right that there is much more to do, and I can confirm that the Pensions Commission is exploring exactly these long-term questions.
Ben Obese-Jecty (Huntingdon) (Con)
My constituents are facing extremely large delays in getting a response from the DWP. One of my constituents has now been waiting for two months for a response with regard to his dispute with the Child Maintenance Service, despite receiving a final letter before action. Another constituent has been waiting for four months for a response to his PIP review claim. Why are we seeing such long delays, what is the Minister doing to resolve them, and why have my constituents not had a response in months?
Lara Bird (Arbroath and Broughty Ferry) (SNP)
It is always very obvious when a Labour Government are in place, because the first thing a Labour Prime Minister will do is take a swing at pensioners—so it is not at all surprising that the Prime Minister is already abandoning his promises to WASPI women. How can pensioners, WASPI women and the public in general trust the DWP when the Prime Minister seems to find it so easy to say yes and make grand promises, when there are no consequences and those promises seem to have absolutely no meaning in practice?
Torsten Bell
This Government promised in our 2024 manifesto to ensure that the state pension in Scotland, England and Wales would rise every single year, and that is exactly what this Government are getting on with doing.
Sarah Smith (Hyndburn) (Lab)
I established the “Get Hyndburn Working” group, and together we are looking at how we can bring our youth hub into a town centre location and also bring health, training and education services all under one roof. Will the Minister meet me to discuss how the Government can support us to make that a reality?
Sovereign Grant Bill
Torsten Bell ExcerptsMonday 14th September 2026
(1 month, 3 weeks ago)
Commons ChamberRead Full debate Sovereign Grant Act 2026-27 View all Sovereign Grant Act 2026-27 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 14 September 2026 - (14 Sep 2026)
The Parliamentary Secretary to the Treasury (Torsten Bell)
I beg to move, That the Bill be now read a Second time.
The Bill relates to the sovereign grant that Parliament has provided to support the official duties of the monarch and the work of the royal household. The Bill implements the conclusions of the recent royal trustees’ review of that sovereign grant. In doing so, it resets the grant level for the next financial year, giving effect to the commitment of successive Governments and the expectation of the royal household for a reduction in the level of funding following the completion of the Buckingham Palace reservicing programme, which keen Members will have heard about on the news this morning on the back of the discovery of some historical documents.
The Bill also makes targeted improvements to the statutory framework for this funding, introducing limited flexibilities to ensure that funding levels remain appropriate even in exceptional circumstances. This will make it easier to respond where funding would otherwise become inappropriately low or inappropriately high.
To support the monarch’s official duties, the sovereign grant funds the staff, official travel, property maintenance and essential services for the sovereign to fulfil their unique constitutional role. That role extends beyond ceremonial functions: it includes hosting heads of state, supporting diplomatic engagements, representing the United Kingdom overseas, and strengthening our relationships across the Commonwealth and the world. These activities support the UK’s interests, including trade, investment and security. At home, the grant supports the significant role of the sovereign and the wider royal household, from recognising charitable and voluntary service to bringing communities together across the United Kingdom.
Since 2012, the amount of the sovereign grant has been determined through a statutory framework established by Parliament in the Sovereign Grant Act 2011. That framework requires the annual grant amount to be calculated by reference to the previous year’s expenditure and a percentage of the profits of the Crown Estate—an independent public corporation whose net revenue profits are returned to the Exchequer. To ensure that funding levels remain appropriate, the 2011 Act requires the royal trustees—the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse—to conduct regular reviews.
Jim Shannon (Strangford) (DUP)
The Minister is setting the scene incredibly well. He is right to underline that the British monarchy has clearly been a source of stability across the world, and to say that its unity remains irreplaceable in a world full of division. We acknowledge the ongoing need to review and adjust the sovereign grant, but does he agree that it is vital that the monarchy remains appropriately funded? When he sums up, can he assure us that the monarchy will be funded to effectively fulfil its duty to this country, the great United Kingdom of Great Britain and Northern Ireland?
Torsten Bell
I thank the hon. Gentleman for his tribute to the monarchy. His description of what he would like to see in the setting of the sovereign grant reflects exactly what has to take place. As I was just explaining, the three trustees are required to take into account the funding required to deliver the function that we all want our monarch to deliver.
Danny Kruger (East Wiltshire) (Reform)
There is what might be an important innovation in the text of this year’s sovereign grant annual report and accounts, which the Bill refers to and which the Minister is describing. Usually, the description of the sovereign’s role includes the term “defender of the faith”, but that term does not appear in this year’s report and accounts. Instead, the monarch is referred to as the
“Supreme Governor of the Church of England”.
That is good. The report also says that he
“protects the space for Faith within the multi-faith nation.”
That is an admirable ambition, but I invite the Minister to confirm that no alteration to the monarch’s role is implied in that change. If there were to be such an alteration, would it be debated properly in Parliament, rather than introduced quietly through these sorts of official reports?
Torsten Bell
The hon. Member has shown interest in this topic over many years, in a lot of different environments. This is a question of “and”, rather than “or”. As he says, the document spells out that His Majesty is the Supreme Governor of the Church of England. I encourage him to go on to the royal family’s website, where he will see the language about the King being the defender of the faith very prominently displayed. I hope that gives him the reassurance that he seeks.
Dr Andrew Murrison (South West Wiltshire) (Con)
We are extremely fortunate to have a monarchy, particularly this monarchy. Since the reign of George III, the profits from the Crown Estate have accrued to the Treasury; in return, the institution of the monarchy receives a grant, which we are debating today. Part of that is an annually determined proportion of the profits. However, for things other than exceptional expenditure, such as on Buckingham Palace, the institution presumably requires some sort of stability and certainty about the receipts necessary to carry out its functions. Is it logical for the grant to be a proportion of profits, which will inevitably vary year by year, because they are a commercial matter?
Torsten Bell
I think everybody in this House will agree with the thrust of what the right hon. Gentleman successfully argues. A royal household with an important role, both as the sovereign, and in maintaining an estate of grade I listed monuments, needs certainty about its income. It is not for me to defend the previous Government, but the 2011 Act provided two bases for funding. The first is the mechanism that he mentioned, relating to a proportion of the profits of the Crown Estate. The second is a proviso that there be no fall, from year to year, in the amount of the grant. That is to provide exactly the stability that he talks about. That is why we are taking forward this primary legislation, with that dual lock. The reduction this year is purely to take into account the bringing to an end of the Buckingham Palace 10-year repair project. The legislation then provides an ongoing commitment to the royal household and the monarch that the grant will remain at next year’s level, at least. I hope that offers the right hon. Gentleman reassurance.
As I was saying, a key point of context is that Parliament agreed a temporary uplift to the grant from 2017-18 to 2026-27 to fund the Buckingham Palace reservicing programme. That was a major 10-year investment to modernise ageing infrastructure, replace critical electrical and mechanical systems, and safeguard the long-term future of one of the nation’s most historic buildings. As that programme nears completion, it is time for the level of funding to be reassessed. Earlier this year, the then royal trustees completed the latest review and considered both the royal household’s projected expenditure and the Crown Estate’s projected revenues for the period from 2027 to 2032. The trustees concluded that with the Buckingham Palace reservicing programme nearing completion, the exceptional funding requirements that justified that temporary uplift no longer exist. They therefore recommended that the sovereign grant should fall from £137.9 million in 2026-27 to £99.9 million in 2027-28. That represents a reduction of almost £38 million, or more than a quarter.
At the same time, the trustees recognised that the royal household continues to face operational pressures in delivering what we all think of as crucial work. The recommended amount of funding will enable the household to address a maintenance backlog that was exacerbated by the pandemic, and to replace ageing digital infrastructure to strengthen cyber-security. The grant provided for by this Bill ensures value for money for taxpayers, and that the royal household can continue to discharge its crucial functions effectively.
This Bill delivers a fair and proportionate funding settlement. It reduces the amount of the sovereign grant, following the completion of a major capital programme; it improves the resilience and sustainability of the statutory framework established in 2011, while maintaining parliamentary oversight; and it ensures that the sovereign grant can continue to fulfil its core purpose, which is supporting the official duties of the monarch and maintaining the occupied royal palaces on behalf of the nation. On that basis, I commend this Bill to the House.
Oral Answers to Questions
Torsten Bell Excerpts(4 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Andrew Rosindell (Romford) (Reform)
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
The Government are committed to supporting British pensioners to enjoy a comfortable retirement after a lifetime of work. That is why we are raising the state pension throughout this Parliament via the triple lock. That saw the state pension increase by 4.8% in April, boosting the level of the new state pension by £575 a year.
Andrew Rosindell
I thank the Minister for his reply, but he will know that my borough of Havering has the second largest number of older people in the entirety of Greater London. Nearly a quarter of my constituents are within that age bracket, and they are losing out. I know that the Government’s policy on the winter fuel allowance has changed, but it frightened them and made them ask whether Labour is really on their side. Will the Minister assure my constituents that the next Labour Administration will not target pensioners, but will give them the respect they deserve, and ensure that they have a happy and healthy retirement?
Torsten Bell
I can give the hon. Member the assurance he asks for, which is that this Labour Administration, like all Labour Administrations, are on the side of pensioners. Of course, he only defected earlier this year, so he was a Conservative MP during all 14 years of the Conservative party’s disastrous last Government—a Government who saw pensioner poverty rise and left one in five of those aged over 75 on NHS waiting lists. That is what letting down pensioners looks like.
Luke Akehurst (North Durham) (Lab)
Can the Minister set out what plans he has to make sure that today’s workers—tomorrow’s pensioners—enjoy a decent retirement?
Torsten Bell
That is a very important question. We need to make sure that those who will retire in 2050 can look forward to the same kind of comfortable retirements that many—not all, but many—of today’s pensioners enjoy, and the honest answer is that we are not on track for that at the moment. This Government are taking a two-stage approach. We are driving up returns on pension savings now—that is what the Pensions Schemes Act 2026 does—but we are also doing the longer-term work through the Pensions Commission to look at exactly the question of how we make sure that tomorrow’s pensioners can enjoy comfortable retirements. I promise that the commission will bring forward its report early next year.
Mark Garnier (Wyre Forest) (Con)
The Pensions Minister likes to spend a lot of time criticising the previous Government for their actions on pensioners. He also spends an awful lot of time talking up his legacy on helping pensioners, but his actions simply do not reflect the narrative. So far, he has capped salary sacrifice, there have been delays to the pensions dashboards, we have had retrospective changes to inheritance tax on pension pots, and—as we have heard—the Government are chasing hard-up pensioners for their winter fuel allowance. All of this creates uncertainty among savers and pensioners alike, so I will repeat the question asked by the hon. Member for Romford (Andrew Rosindell): is the Pensions Minister hopeful that his successor will do a better job of looking after pensioners?
Torsten Bell
I am incredibly hopeful that this Government are doing a much better job than the previous Government in supporting pensioners, not only by driving up the state pension, but by getting on with the much delayed reforms to our defined-contribution pension system, which the previous Government left on ice. We are also coming forward with something much more important, because the biggest betrayal of older generations in Britain today is the state in which the Conservatives left our national health service.
John Cooper (Dumfries and Galloway) (Con)
Andrew Rosindell (Romford) (Reform)
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
I recognise the hon. Gentleman’s point, and we need to fund the NHS to stop letting down older generations. Taxes have consequences that affect the whole population, including pensioners. The Chancellor has set out that the level of the personal allowance will remain above the level of the new and the basic state pension—the headline rates—throughout this year. In future years we will ensure that we ease the administrative burden for pensioners who have small amounts of tax due.
Dame Nia Griffith (Llanelli) (Lab)
Torsten Bell
My hon. Friend and I have discussed this issue on a number of occasions, and she has been an important campaigner for pensioners in her constituency who have been affected by it. Although three quarters of schemes provide some degree of pre-1997 indexation, there is a very real impact on members of schemes that do not—indeed, we have discussed that with local pensioners in south Wales. The surplus reforms that this Government are bringing forward will make it easier for some trustees to negotiate for additional indexation. We launched a consultation on this issue on 10 June, and it runs until 2 September. I will take my hon. Friend’s comments as input for that consultation.
Sarah Olney (Richmond Park) (LD)
Neil Duncan-Jordan (Poole) (Lab)
The Pensions Minister knows that there is no retirement on a dead planet, so will he commit to writing to the 50 largest UK pension funds to ask them to set out their timetable for divesting from fossil fuels?
Torsten Bell
My hon. Friend is a consistent campaigner on these issues in this place and in our regular meetings, and I always learn something from those conversations. I am not going forward with exactly the suggestion he brings forward, but I agree that there is more we can do, not least to provide clarity for trustees. We are working with industry to develop guidance clarifying that fiduciary duties allow trustees investing in members’ best interests to consider systemic risks, including climate change, and we will consult later this summer.
Joy Morrissey (Beaconsfield) (Con)
The increased PIP costs are expected to add an extra £5 billion to the welfare budget this year. As the TaxPayers’ Alliance has highlighted, the number of households earning over £100,000 and getting PIP has doubled to 200,000 claimants. Will the Minister make an assessment of the potential merits of means-testing PIP to ensure targeted support?
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
Given that benefit fraud is estimated at around £9 billion, and that the WASPI women are apparently willing to have the cost of their just compensation claim capped at around a third of that figure, can someone from the ministerial team confirm that the Government are willing to change course and negotiate with the WASPI women?
Torsten Bell
The hon. Member will know that a judicial review claim has been filed, and that we cannot comment on live litigation. There are legitimate views on raises in the state pension age, particularly the 2011 acceleration put in place by the coalition Government, but the investigation that is being considered by the Parliamentary and Health Service Ombudsman is not about those increases; it is purely on the narrow point about communication. The Government have made their position clear on that and set it out in the decision document placed in the House of Commons Library.
Amanda Hack (North West Leicestershire) (Lab)
Safeguarding has been a key focus of the Work and Pensions Committee, so I was shocked to hear that my constituent Barbara Skedd received a letter to her executors, incorrectly notifying them of her death. This resulted in Barbara’s benefits being stopped, including the personal independence payment and all her pensions. My team have been working hard to get those reinstated. Can the Secretary of State outline what steps he is taking to ensure that those kinds of errors are minimised, and that the appropriate package of support is put in place so that when errors do occur, they are dealt with quickly?
State Pension Age Communications and Complaints Handling
Torsten Bell Excerpts(4 months, 1 week ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)
In January 2026 the Secretary of State for Work and Pensions announced the Government’s new response to the Parliamentary and Health Service Ombudsman’s report into the way that changes to the state pension age were communicated to women born in the 1950s. This included a commitment to deliver an action plan to learn lessons from the ombudsman’s investigation. Today this action plan has been published on gov.uk.
I will also place a copy of the action plan in the Libraries of the House.
The action plan sets out key steps for state pension age communications and complaints handling, recognising the importance of building a continuous learning approach.
I am grateful to the ombudsman who has provided support to develop the action plan. As we have set out in the plan, we will work collaboratively with a range of stakeholders on future state pension age communications.
[HCWS148]
Draft Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026
Torsten Bell Excerpts(4 months, 2 weeks ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary to the Treasury (Torsten Bell)
I beg to move,
That the Committee has considered the draft Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026.
I will briefly take the Committee through the background and purpose of these draft regulations, which relate to the abolition of the pensions lifetime allowance. At the 2023 spring Budget, the previous Government announced that they would abolish the lifetime allowance. The Finance (No. 2) Act 2023 removed the lifetime allowance charge. The Finance Act 2024 removed the other elements of the lifetime allowance from the pension tax regime from 6 April 2024. That was a significant task; the entire pensions tax regime was structured around the existence of a lifetime allowance, and many other aspects of the regime, such as allowable pension and lump sum benefits, were calculated with reference to the lifetime allowance. Additional regulations have thus been needed to provide further administrative and technical detail.
Since the Finance Act 2024 and the regulations that followed, His Majesty’s Revenue and Customs has continued to work with industry representatives to ensure that the legislation operates correctly. In doing so, HMRC has identified further areas that do not operate as intended. This statutory instrument simply modifies a number of areas of primary legislation and some areas of subordinate legislation purely to ensure that the abolition of the lifetime allowance is delivered as originally intended.
Those changes ensure that the lump sum allowances work fairly and consistently, including treating overseas pensions in the same way as UK schemes and giving individuals flexibility to decide the order of multiple payments on the same day. They also clarify the calculation of protections and enhancements so that the outcomes more closely reflect those achieved under the lifetime allowance. Finally, they introduce targeted technical fixes and improved reporting rules to support accurate administration for the post-lifetime allowance regime. The draft regulations are not a change in policy but make the further technical and consequential amendments necessary to ensure that pensions tax legislation can operate as intended following the abolition of the lifetime allowance.
Most of these changes will take effect from 6 April 2024 —in other words, they will apply retrospectively—when the lifetime allowance was abolished, although a small number of amendments will come into effect only from the date that the regulations come into force. The regulations have been made by the Treasury by exercising the powers conferred by paragraph 134 of schedule 9 of the Finance Act 2024. I therefore commend the instrument to the Committee.
Defined Benefit Pensions Regulation: Flexible Apportionment Arrangements
Torsten Bell Excerpts(4 months, 2 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary to the Treasury (Torsten Bell)
We are taking action to ensure the strong regulatory framework for defined benefit pensions remains effective as innovation develops, to manage future risks and protect member benefits.
On 4 December 2025, a novel use of existing legislation led to an asset manager assuming responsibility for the liabilities and the assets of another employer’s defined benefit pension scheme.
This Government have since delivered the landmark Pension Schemes Act 2026, introducing major reforms to UK occupational pensions, consolidating our fragmented pensions system into larger, better run, more secure schemes.
We want to encourage innovation that has the potential to benefit scheme members throughout the pension system and need to ensure the right legislative guard rails are in place for this to happen safely.
Flexible apportionment arrangements, the legislative mechanism used in this transaction, were introduced in 2012. They were designed to ensure that corporate restructurings, mergers and sales do not cause employer insolvency events when there is an appropriate sponsor who can support the scheme. Whilst this transaction complied with the existing FAA mechanism it did so in a way not anticipated when the mechanism was introduced.
We therefore intend to review this area of legislation to ensure the regulatory standards and safeguards evolve and keep pace with the innovation we are seeing in the pension market. This is to protect members and the Pension Protection Fund, which is there to protect people’s pensions in the event of an employer insolvency.
The DB superfunds framework set out in the Act reflects the fact that superfunds operate schemes on a commercial basis and is designed to ensure that the interests of commercial providers are appropriately aligned with those of scheme members. This contrast highlights the importance of considering whether additional safeguards are required where other mechanisms, such as FAAs, are used in ways that similarly involve the commercial operation of DB pension schemes. We will therefore consult in due course on whether and how existing FAA regulations could be strengthened.
Where providers are looking to run schemes for profit, this can work in scheme members’ interests but regulatory standards and safeguards must evolve to match the new risks this creates.
[HCWS114]
Public Service Pensions: SCAPE Discount Rate
Torsten Bell Excerpts(5 months, 2 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary to the Treasury (Torsten Bell)
SCAPE—superannuation contributions adjusted for past experience—is the process for setting employer contribution rates at valuations of unfunded public service pension schemes. As part of the SCAPE process, the SCAPE discount rate is used alongside many other factors such as earnings changes, changes to life expectancy and demographic assumptions to determine the appropriate employer contribution rate. Valuations as at 31 March 2024 are currently under way and will result in new employer contribution rates, which will be implemented from April 2027.
The current methodology for setting the discount rate, based on the Office for Budget Responsibility’s forecast of long-term GDP growth, was adopted in 2011, with a commitment to review its methodology every 10 years. A review under the previous Government, from 2021 to 2023, maintained this methodology.
The SCAPE discount rate to be used as part of the ongoing 2024 valuations will therefore be based on the expected long-term GDP growth figures, published by the OBR in July 2025. Based on these figures, the new SCAPE discount rate is CPI+2% p.a.
[HCWS37]