The Newshound

Experts fear Labour's plan to tear up 'pension freedoms' will lock 17 million savers into deals they don't want

Torsten Bell, the pensions minister, whose reforms would also launch a separate consultation on Retirement Collective Pension Schemes, which pool risk to deliver more stable lifetime payouts.
Torsten Bell, the pensions minister, whose reforms would also launch a separate consultation on Retirement Collective Pension Schemes, which pool risk to deliver more stable lifetime payouts.

Pensions minister Torsten Bell unveiled the 'Guided Retirement' consultation on Tuesday, proposing that workplace pension schemes must offer private sector workers a default income-for-life option as they approach retirement, automatically enrolling roughly 17 million savers unless they actively opt out. The plan effectively reverses the 'pension freedoms' reforms of the coalition era, which scrapped the obligation to buy an annuity and let savers spend or invest their pots as they chose. Experts warn that many people who would never voluntarily choose an annuity-style deal could find themselves locked in with little flexibility.

Steve Webb of LCP warns most people currently reject annuities and would struggle to change their mind once enrolled.

Jon Greer of Quilter says the default must be 'a safety net rather than a straitjacket' with real freedom to choose alternatives.

In 2025–26, around 46% of first-time pension pot accesses involved savers withdrawing the entire fund — the statistic Bell cited to justify the shake-up.

MoreDaily MailWhy Labour's surprise pension plan could hand you an income for lifeThe GuardianGuaranteed pension income ‘resurrected’ for 17m private sector workersDaily MailFears over Labour's new nanny state drive on private pensionsThe TelegraphLabour plans to tear up ‘pension freedoms’LBCPrivate sector pension savers to be given ‘simpler’ options to take an incomeGB NewsDWP unveils pension shake-up that could give 17million workers an income for lifeCity A.M.‘Safety net rather than a straitjacket’: Pension providers question Labour guaranteed income planCity A.M.Private workers to get guaranteed pension income for life in bid to close savings gapReutersBritain to make lifetime retirement income the default for private pensionsTraders UnionUK government launches default pension plans for private sector retirement income - Traders Union
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