Steven Hull: One year in, we are broadly in a better place
The latest of the Society of Pension Professionals’ (SPP’s) regular columns looks at the government’s first-year report card on pensions.
One year into the new government's tenure, the pensions industry is riding an unprecedented wave of reform.
In twelve months, pensions have moved from political ‘to do' to front‑page news (again). The present administration launched a landmark review within weeks to boost investment, grow pension pots and curb waste.
A joint Treasury and DWP pensions minister, a first for the United Kingdom, has spearheaded a joined‑up approach. A short call for evidence on scale and consolidation prompted rapid action and by June the Pension Schemes Bill 2025 arrived.
The Bill amounts to transformation on fast‑forward. It proposes defined contribution mega‑funds of at least £25 billion to deliver scale and investment power, consolidation of small pots left by a mobile workforce, a value‑for‑money framework to keep charges in check and legislation for defined benefit superfunds. It also offers relief by helping schemes manage surplus and (we are promised) clarifying liabilities following Virgin Media. Many regard it as a "once in a generation" opportunity for better pensions.
To spur investment in United Kingdom infrastructure, the government favours tax incentives over compulsion; at a recent forum, 74% of pension professionals backed incentives to encourage funds to invest in UK PLC.
Attention is turning towards adequacy and inclusion. The Pensions Minister has signalled the next phase of the review, the Pensions Commission, will tackle retirement income adequacy and fairness. It is twenty years since Lord Turner's commission kick‑started auto‑enrolment; the sequel now aims to ensure savers in mid‑century Britain are not left short. There is serious talk of addressing inequalities in outcomes and possibly extending coverage or contributions, as covered in depth in the SPP's recent Saving Retirement paper. Even thorny issues such as public sector scheme consolidation and the long‑running pensions dashboards project feel more hopeful with stronger political will. One year on, the sector is cautiously optimistic this government will deliver better retirements.
Industry collaboration and bright spots
The industry has not watched passively; it has collaborated, adapted and often thrived alongside policy shifts. A year of market calm has left defined benefit schemes at their healthiest in years, possibly decades. Higher bond yields have reduced deficits and many schemes are understandably seizing the moment to de‑risk or buy out liabilities. On the defined contribution side, providers and trustees are preparing for value‑for‑money rules and consolidation.
Culture also continues to shift. Equality, diversity and inclusion has inexorably climbed the agenda. The SPP's EDI Committee champions diversity, recognising the strength it brings. Diverse voices are heard through mixed panels and mentoring programmes. There is renewed focus on young talent. Early‑career professionals are no longer overlooked; they are encouraged to, and are, shaping the future. The SPP's Early Career Professionals group, formed in 2021, is thriving: hosting events, sharing guidance and giving those with under six years' experience a valuable platform to learn and shine. The government appears supportive of a more inclusive financial sector and the industry is echoing this sentiment.
Looking ahead with optimism
So, where are we now, one year in? In, broadly, a better place. The tone from the top is positive: pensions are a priority. The first‑year report card boasts ambitious proposals, an engaged industry and no major mishaps - quite the hat‑trick. Challenges remain, of course, they always will – for many in the industry it's one of the beauties of pensions. Turning a 300‑page Pension Schemes Bill into practical reality will be a marathon, not a sprint, but, like a marathon, rewarding to do so. Ensuring people save enough for retirement, especially low earners and gig workers outside auto‑enrolment, still demands answers, and the second phase of the review will be pivotal. Nevertheless, there is positive momentum. Twelve months on, it is so far, so good for pensions.
Steven Hull is a council member at the SPP and a partner at Burges Salmon
