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Fears grow that 17 million private sector savers could be 'locked in' to Labour's default 'income for life' pensions

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 has opened a consultation on 'guided retirement', a proposal that would set annuity-style income arrangements as the automatic default for around 17 million private sector workers, with individuals required to opt out if they want something different. The plan rolls back pension freedoms introduced by the coalition government a decade ago, which had allowed retirees to spend, save or invest their savings as they saw fit. Industry experts warn the scheme could become a 'straitjacket' rather than a safety net.

Steve Webb, a former pensions minister, cautioned that annuities are rarely the choice savers make today and that those locked into one would have no way to reverse that decision.

Tories say the shake-up does nothing to close the 'yawning chasm' between private and gold-plated public sector pension provision.

In 2025-26, 46% of first-time pension pot accesses resulted in the entire pot being withdrawn — the statistic Labour is using to justify the overhaul.

MoreDaily MailWhy Labour's surprise pension plan could hand you an income for lifeThe GuardianGuaranteed pension income ‘resurrected’ for 17m private sector workersFinancial TimesUK pensioners to be offered annual income as default, ministers sayEvening StandardPrivate sector pension savers to be given ‘simpler’ options to take an incomeCity A.M.‘Safety net rather than a straitjacket’: Pension providers question Labour guaranteed income planReutersBritain to make lifetime retirement income the default for private pensionsiNewsThe lessons Britain can learn from France's pensions crisisDaily 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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