Labour plans to tear up 'pension freedoms' with default 'income for life' deals for 17m private sector workers
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 unveiled a 'Guided Retirement' plan that would require pension providers to offer private sector workers a default annual income for life rather than leaving them to manage a retirement pot. In 2025-26, some 46% of first-time pension pot accesses involved the pot being fully withdrawn entirely. Bell announced the two-part consultation at the Association of British Insurers Long-Term Savings Conference.
Critics warn workers could be LOCKED into annuity-style deals they cannot reverse, undermining the pension freedoms introduced under the coalition.
Pension provider Quilter says default solutions should be 'a safety net rather than a straitjacket' and must not strip savers of personalised advice.
The plans would build on auto-enrolment, under which nine in ten eligible private sector workers now save, up from four in ten in 2012.
