The Work and Pensions Committee is set to hold an evidence session on indexation on pre-1997 pension rights and member representation, hearing from experts across the pensions industry on recent concerns in this area.

Members from several campaign groups are set to appear, including representatives on behalf of the BNP Pensioner Group, the American Express UK Pensioners Justice campaign group, and Hewlett Packard Pension Association.

In addition to this, the committee will also hear from industry experts, such as Society of Pension Professionals defined benefit (DB) committee chair, Jon Forsyth, Association of Members Nominated Trustees co-chair, Maggie Rodger, as well as representatives from The Pensions Regulator, with both head of policy, Fiona Frobisher, and interim executive director of market oversight, Julian Lyne, set to give evidence.

Issues around pre-1997 indexation by DB pension schemes have been gaining renewed focus after many DB pension schemes reported large funding improvements, at the same time as savers faced growing cost-of-living strains.

Indeed, despite DB funding improvements, recent research from Aon found that the number of DB schemes granting discretionary pension increases has fallen, with just 13 per cent granting a discretionary increase in 2024, down from 17 per cent in 2023.

This is also an issue that has already been raised numerous times throughout the Pension Schemes Bill's passage through parliament, with MPs urging the government to address potential loopholes surrounding discretionary increases.

During the bill's second reading, MPs pointed out that some pensioners have been told by the trustees of their scheme that it is the sponsoring employer that has the power to award discretionary increases.

However, Bell suggested that the DB surplus rule changes could actually help address this, arguing that trustees could negotiate an agreement on indexation before agreeing to any DB surplus release.

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