Labour plans default 'income for life' pensions for 17 million workers amid fears savers will be 'locked in'

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 has launched a consultation on "guided retirement," a proposal that would require pension providers to place private sector workers into an annuity-style income-for-life product at retirement automatically, with workers able to leave the arrangement only if they choose to do so. The overhaul is designed to address a growing crisis where nearly half of all first-time pension pot accesses in 2025-26 involved savers emptying their funds entirely.

Industry figures warn the default must be a 'safety net rather than a straitjacket', with Quilter's Jon Greer insisting savers keep the right to choose a different approach.

Steve Webb, formerly a pensions minister, warns most people currently do not choose annuities and would struggle to change course once enrolled in the new default.

Critics point out the shake-up does nothing to close the 'yawning chasm' between private pensions and the gold-plated defined benefit schemes enjoyed by public sector workers.

Daily MailWhy Labour's surprise pension plan could hand you an income for life The GuardianGuaranteed pension income ‘resurrected’ for 17m private sector workers Financial TimesUK pensioners to be offered annual income as default, ministers say Evening StandardPrivate sector pension savers to be given ‘simpler’ options to take an income City A.M.‘Safety net rather than a straitjacket’: Pension providers question Labour guaranteed income plan ReutersBritain to make lifetime retirement income the default for private pensions Daily MailLabour's new nanny state drive on private pensions: Fears plan for 'incomes for life' will leave people 'locked in' to deals they don't want

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