The Newshound

Labour's default 'income for life' plan for 17 million private pension savers raises fears they 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.
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' scheme that would funnel 17 million private sector workers into annuity-style arrangements providing income until death, with enrolment automatic unless savers choose to leave. The proposals, now out for consultation, unwind the pension freedoms introduced more than a decade ago that gave savers free rein to spend or invest their pots.

According to government figures, in 2025-26 nearly half of all first-time pension pot accesses — 46 per cent — saw the funds withdrawn entirely, and ministers are citing that statistic as the central case for the default change.

Pension providers have warned the default should be 'a safety net rather than a straitjacket', with Quilter's Jon Greer insisting people must keep flexibility to choose alternatives.

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 sayReutersBritain to make lifetime retirement income the default for private pensionsDaily 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
Read today's full feed at The Newshound →