The Financial Fairness Trust has called for a range of improvements to the government’s Pensions Scheme Bill, with an aim to help lower earners.

The bill, described by Chancellor Rachel Reeves as “a gamechanger”, was introduced for first reading on 5 June. It is aimed at making it easier for “millions of people planning their retirement” to “manage and get more from their pension pots,” the Department for Work and Pensions said.

The bill includes: “Requiring defined contribution (DC) schemes to prove they are value for money, to protect savers from getting stuck in underperforming schemes,” and “simplifying retirement choices, with all pension schemes offering default routes to an income in retirement".

But the Financial Fairness Trust’s external adviser, Andrew Harrop, who was previously general secretary of the Fabian Society and director of policy and public affairs at Age UK, said it fell short on several fronts.

In a paper published today, Harrop urged the government to strengthen the bill by requiring pension providers to include incomes ‘for life’ as part of default solutions.

He added that parliament should examine whether members should be required to provide key information before accessing a pension, and suggested pension schemes should be expected to screen out people with very short life expectancies from default solutions.

While broadly supportive of the bill’s “goals and key provisions,” Harrop also called on the government to reconsider its approach to consolidation of smaller pots, urging it to “permit ministers to set more than one upper limit on the size of funds that can be automatically consolidated, so that pots of higher value can be pooled by default when members are close to retirement".

In addition, he said: “Consumer champions, trade unions and pension scheme trustees must ensure that the interests of low and middle-earning members are not sacrificed.”

Crucially, Harrop added: “Outcomes for low-income savers must not be allowed to end up worse than they would have been without the government’s involvement.”

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