Industry experts have expressed frustration over the news that the government will continue to explore a lifetime provider model, while auto-enrolment (AE) reforms have been “kicked into the long grass”.

The Chancellor's 2024 Spring Budget confirmed that the government will continue to "explore" plans for a lifetime provider pension model, whilst also pushing ahead with the next steps on the value for money frramework, and introducing new investment disclosures for defined contribution (DC) schemes and the Local Government Pension Scheme.

Pensions and Lifetime Savings Association (PLSA) director of policy and advocacy, Nigel Peaple, highlighted the Chancellor’s announcements as “sensible”, to help pensions achieve the government’s three goals of meeting saver needs, supporting the gilt market, and supporting UK growth.

However, he argued that more action is needed to increase pension adequacy and support pension fund investment in UK assets, stating that "above all, the government should set out a timetable to increase the level of automatic enrolment pension saving in the workplace so that, over the next decade, the level of saving gradually increases from 8 per cent to 12 per cent, with the majority of the rise being met by employers.”

Association of Consulting Actuaries (ACA) chair, Steven Taylor, echoed this, arguing that while it was “encouraging that there were no new pension surprises" in the statement, there are concerns that pension trustees and savers could be pressurised into making investment decisions on quotas or sentiment that could in the end damage outcomes.

“It is also a shame in calling for higher investment, the Chancellor missed the opportunity to encourage higher pension savings by perhaps outlining a longer-term plan to increase AE minimum contributions or incentivise increased voluntary saving - a must for many workers as financial pressures on families ease,” he continued. “The added tax relief via the British ISA is however a modest move in the right direction."

This was echoed by Aegon head of pensions, Kate Smith, who said that the firm was “incredibly disappointed that any mention of auto-enrolment enhancements was missing from the Chancellor’s Spring Budget statement”.

“We’ve now been waiting almost seven years for these changes to be implemented, which at the current minimum rate of 8 per cent, would see contributions boosted by £499 a year for millions of savers each year,” she continued.

“It’s time to scratch that itch and get on and implement the reforms, enabling more people to save more into pensions from an earlier age. Delaying will only build up retirement income adequacy problems for the future.”

Smart UK CEO, Jamie Fiveash, agreed, arguing that while he can appreciate the desire of to keep this budget focused on purely good news, "now should have been the time to act and get the clock counting down to auto enrolment reform, so we can allow for greater savings and better retirements".

"Employers also need a fair warning and a better understanding of the government’s timetable," he continued. “Hidden under the current average UK retirement savings figures is an increasingly polarised and unequal picture of savings.

"Expanding auto enrolment, to benefit part-time and younger workers as well as low-paid and multi-job holders, and increasing mandated pension contributions to a sustainable level, would take a big step towards tackling this inequality and stop the creation of another generation of haves and have-nots in retirement.”

WTW director, David Robbins, pointed out that HM Treasury has also managed to keep the government’s stated ‘ambition’ to expand AE by the ‘mid-2020s’ out of the fiscal forecasts – even though the mid-2020s have now arrived and any changes are likely to be phased in gradually and with plenty of notice for employers.

“It’s hardly a surprise that a Chancellor under pressure to cut taxes did not devote precious ‘headroom’ to the revenue cost of people saving more for retirement. Manifesto writers in all parties may similarly prioritise other things,” he added.

Despite the political considerations though, Standard Life managing director for workplace, Gail Izat, said that the absence of a decision on the roll out of auto enrolment reform is a “real missed opportunity” to help the future finances of millions of people.

“It's crystal clear that we need a greater focus on savings adequacy in the UK and a delay to consulting implementing auto enrolment reform is further damaging the long-term saving prospects of our youngest workers,” she stated.

And the inclusion of the government’s commitment to explore a lifetime provider model has exacerbated these frustrations, as Pensions Management Institute (PMI) director of policy and external affairs, Tim Middleton, said: “We feel frustrated that the Chancellor has chosen to press ahead with the lifetime provider initiative.

"We noted earlier this year that this was the wrong time for an initiative such as this and are concerned at the disruption this could cause for so much of the good work achieved to date by automatic enrolment.”

This was echoed by Barnett Waddingham partner, Martin Willis, who argued that more work needs to be done before the pots for life proposal is ready to float to the electorate, "and it must be one of several reforms".

"An increase to auto-enrolment contribution levels, a reduction of the minimum AE income threshold, and specific pushes to close the gender and disability pensions gap must be just as much of a priority," he stated.

However, other industry organisations have been more receptive to the Chancellor's comments on pot for life, as Peaple welcomed the government’s decision to not introduce the lifetime provider model at this time and to instead undertake further analysis to understand the pros and cons of such an approach, and to better understand the views of savers, employers and pension scheme providers.

And many were quick to note that the pot for life debate could already be evolving closer to a pot follows member model, as Middleton pointed out the Chancellor’s "careful use of words in his statement".

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