Writing today in Pensions Age for the first time since I was appointed as Minister for Pensions, I want to tell you that I am genuinely excited by the potential of our pensions industry to unlock economic growth and deliver for both today’s and tomorrow's pensioners.
 
Our commitment to protect the triple lock is providing certainty for pensioners, with the full rate of the new state pension set to increase by £1,700 per year by the end of this parliament.

Now we need to unleash the real potential of our private pensions sector to secure a brighter future for future pensioners.

As a nation, we are punching well above our weight, with a booming pensions industry – the third largest market in the world with around two trillion saved – and with more and more people saving, this is only predicted to grow. 

Automatic enrolment has played a key part in our massive milestone of around 88 per cent of employees saving for their retirement as of 2023. It has been a quiet revolution, ensuring that working people are putting something away for their retirement.

However, much more needs to be done to harness this trillion-pound industry to drive more investment into our economy and improve returns for pension savers.

There is an urgent need to shift the focus of investment towards providing real value and growth. Our future pensioners deserve stability, accountability, and transparency – in short, an industry which serves them.

Driving more UK pension fund investment into UK growth and ensuring people have enough in retirement – are the twin challenges of my brief in this new government.

I am leading the first phase of the Pensions Review which is considering what we can do right now to ensure the vast resources within our pension funds are actively contributing to economic growth across the UK.

By channelling investments into high-growth sectors, infrastructure projects, and innovative enterprises, we can boost our economy while securing better returns for pensioners.  

I want to see a private pensions system that encourages the consolidation of smaller pension schemes into larger, more efficient funds in order to deliver better value for money and outcomes for members while unlocking UK investment opportunities. 

The second phase of the Pensions Review will look more broadly at adequacy – improving pension outcomes, exploring ways to ensure greater security in retirement.

I have heard the call to consider higher automatic enrolment contribution rates. As part of phase two of our review, we will look at ensuring that people have the pension provision they need for a secure retirement – but to have the discussion about contribution levels, and security in retirement, we need to have confidence that our pension system is delivering a fair outcome for savers, employers and the taxpayer, and importantly for our economy.

Through our Pension Schemes Bill, we know that our measures could boost the pension pots of someone saving into a defined contribution scheme over their career by more than £11,000. We want schemes to be able to access these opportunities, whilst ensuring UK businesses get the investment they need. 

The bill will be delivered through our Value for Money Framework and small pots consolidation into law, with the ultimate aim to drive growth and put members first.
With better, more productive investment we can achieve greater outcomes.

This will not only increase security in retirement, but also enable pension schemes to invest in a wider range of assets, driving growth and delivering on our mission to kickstart the economy.

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