The absence of Labour’s pensions review and long-awaited auto-enrolment (AE) expansion from the Pension Schemes Bill has been met with disappointment from the pensions industry.

While many in the sector praised the new government for acting so swiftly with the inclusion of a pensions bill in the King’s Speech, the omissions of AE reform and the pensions review were notable.

“Although promising to see some further detail on reforms impacting savers through the Pension Schemes Bill, we are disappointed not to hear more detail on the pensions review mentioned in Labour’s manifesto, including some specific thoughts around the expansion of AE or increases to contribution rates, to ensure better outcomes and financial security for people in retirement,” said Smart Pension senior director of strategic delivery, Eve Read.

“The current combination of 8 per cent minimum contributions, the £10,000 earnings trigger and the presence of the lower earnings limit on qualifying earnings, produce inadequate savings for the vast majority of UK workers.

“Implementing the value for money framework, solving the small pots challenge and ensuring retirees have access to suitable options at the point of retirement are important, but ensuring savings adequacy should be a priority, and we urge the government to include some provision for this in addition to the changes already mentioned in the upcoming Pension Schemes Bill.”

Read noted that the expansion of AE has already been legislated for and urged the government to quickly announce its implementation.

TPT Retirement Solutions chief executive, David Lane, also urged the government to implement “much-needed” pension reforms that do not need primary legislation, with the “most important” of these being AE expansion.

Adding to this, Phoenix Group CEO, Andy Briggs, commented: “I hope that the next steps the government takes will include a timeframe for implementing the broader pensions review and that it will be announced sooner rather than later.

“This should include both the private and state pension system to ensure it is fit for purpose and a plan for increasing AE minimum contributions should be part of this.

“People are at risk across the UK of thinking they are saving at the right rate for their future when they are not. Saving at the statutory minimum isn’t enough. The single biggest lever we can pull to secure savings adequacy is raising minimum contributions, which we’d like to see the government move towards as part of an adequacy review.”

Standard Life retirement savings director, Mike Ambery, noted that a potential consequence of plans to largely ban zero-hours contracts was that more people will become eligible for workplace saving.

“Zero-hours contracts don’t preclude AE but the variability of people’s earnings make it less likely that people are earning enough for consistent pension savings,” he continued.

“This is one trend where we’ll have to monitor closely to see how the labour market reacts and whether there does turn out to be an accompanying pension boost.”

AJ Bell director of public policy, Tom Selby, highlighted that pensions dashboards were not mentioned in the bill and the government would need to “fully get behind this initiative” to make it a reality.

“At the last count, there was over £26bn sitting in pension pots that had become disconnected from their owners, meaning savers could potentially have thousands of pounds they are completely unaware of,” he noted.

Meanwhile, Broadstone head of market engagement, Simon Kew, said that while there was a mention of commercial superfunds in the bill, a plan for a public sector consolidator was “conspicuous by its absence”.

“The legislative direction of travel outlined in the Kings Speech is understandable as a smaller number of larger pension schemes brings efficiencies for providers, investment opportunities for the government and easements for regulators,” he stated.

“The hope is that the combination of these will lead to better outcomes for members while these goals clearly remain consistent with the terms of any deeper review of financial services and pensions.

“It may clear the way for the wide-ranging Pensions Review to tax reliefs, the state pension and advice/guidance – all areas which could benefit with from longer and considered consultations.”

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