Labour unveils default income-for-life pensions for 17m private sector workers amid fears savers will be locked into unwanted deals
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' scheme at the Association of British Insurers Long-Term Savings Conference on Tuesday, requiring pension providers to offer workers a default lifetime income as they approach retirement. The plans reverse a decade-long shift away from guaranteed payouts triggered when George Osborne scrapped the obligation to buy an annuity. Critics warn Labour is rolling back hard-won pension freedoms, with experts noting 46% of first-time pot accesses in 2025-26 involved savers emptying their funds entirely.
Labour is accused of planning to tear up 'pension freedoms' introduced under the Tory-Lib Dem coalition.
Quilter's Jon Greer warns the default should be 'a safety net rather than a straitjacket', with savers keeping the right to opt out.
Steve Webb, of consultancy LCP, points out most people currently do not choose annuities and would struggle to change their minds once locked in.
