Pensions UK is calling on the Government to withdraw the power that would allow it to direct how pension schemes invest UK workers’ retirement savings from the Pension Schemes Bill.

As drafted, the reserve power extends significantly beyond the Government’s stated intention of supporting the Mansion House Accord, a voluntary commitment by 17 of the largest workplace pension providers to invest at least 10% of their defined contribution (DC) default funds in private markets by 2030, with 5% of the total allocated to the UK.

The Bill is at a crucial juncture in its passage through Parliament, with the report stage presenting one of the last opportunities for amendments to be introduced and pushed to a vote.

Pensions UK welcomes the broader aims of the Pension Schemes Bill, including reforms that reduce system complexity and improve saver outcomes. These reforms are critical for the sector and long-term member outcomes.

But if the mandation power is exercised, it would hamper free and open market competition aimed at driving better saver outcomes and put those outcomes at risk. Decisions on how savers’ hard-earned money should be invested should not be a political choice.

If the power remains in the Bill, given the significant risks to scheme members, it is essential that the legislation should allow no more direction by Government than the minimum necessary to deliver its stated intention.

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