Sarah Brown, Chief Actuary, Gallagher’s Benefits & HR Consulting Division, UK, said: “Pensions were never going to take centre stage in today’s Spring Statement, especially with big-ticket reforms like the Pensions Investment Review and the long-awaited response to the DWP’s ‘options for DB schemes’ consultation still on the horizon. The consultation response will finally clarify how well-funded DB schemes can safely unlock surplus funds, but trustees shouldn’t wait until spring to assess their scheme’s funding position. Trustees who plan ahead and explore what a long-term run-on strategy with surplus release might look like for their scheme will be in a stronger position when the new rules take effect.
Pensions Investment Review
“At the same time, the Pensions Investment Review is set to push workplace pensions towards investments that drive UK economic growth—potentially a win-win for both savers and the economy. And with the upcoming Pension Schemes Bill, we’ll see new measures to ensure pensions deliver real value for money, alongside long-overdue plans to consolidate small, forgotten pots.
IHT reforms
“While tax hikes may have been avoided today, the OBR’s forecasts could lay the groundwork for tougher fiscal decisions that impact retirement savings down the line. One major change is already coming with pension pots falling within the inheritance tax (IHT) from April 2027. Many older, wealthier individuals had planned to pass unspent pensions to their children, but with the looming IHT charge, many are now choosing to spend rather than save, shifting the retirement planning landscape.
Triple lock
“Despite reports that the triple lock is close to being axed, it remains intact for now, even as the Chancellor grapples with spending cuts and tough fiscal choices. However, its long-term sustainability is clearly under increasing scrutiny. The challenge is balancing fiscal responsibility while ensuring retirees have adequate incomes. Although means-testing could cut costs by providing support to those who need it most, this comes with complex administrative hurdles. While reform seems inevitable, the real question is how we can keep the policy affordable as the costs mount up.”
Hannah Gurga, ABI Director General, said: “Certainty and stability are crucial for economic growth, and we support the approach the Government has set out in its Spring Statement to deliver this. The insurance and long-term savings sector has a vital role to play in the growth mission, including through the commitment to invest £100 billion in UK productive finance over the next ten years. This includes infrastructure, the transition to green energy and building new homes. We support the Government’s planning and infrastructure reforms, but it’s vital that new homes are fit for the future, able to withstand adverse weather and are not built in areas at risk of flooding.”
Helen Forrest Hall, Chief Strategy Officer of the PMI comments: "The Chancellor faced significant fiscal challenges today. In response, tough decisions were made to balance stability with growth, though these measures do leave limited room for manoeuvre in future years. The referenced pension reforms, aimed at boosting UK investment and enhancing member outcomes, are commendable but must maintain a sharp focus on delivering tangible benefits for members. Additionally, the Government must consider the financial and operational burdens these reforms will place on businesses. Sequencing will be key to ensuring practicality and avoiding unintended consequences and the PMI looks forward to collaborating with the Government to establish the most effective pension reform roadmap.”
Calum Cooper, Head of Pensions Policy Innovation, Hymans Robertson says: “The lack of clarity from the Chancellor in today’s Spring Statement around pensions – not least the lack of clarity around the second stage of the DWP Pensions Investment Review is disappointing yet unexpected. As an industry, we need a clear timetable with detailed terms of reference, as well as a firm start date, to ensure that the energy and momentum of this vital initiative continues. With each passing month, and a continued cost of living crisis and rising costs, further challenges are being placed on individuals to ensure their ability to achieve a good retirement. With dashboards making inadequacy transparent, and the State Pension Age Review in 2026: the government may feel the pensions platform is on fire. But the Spring Statement also laid bare our immense fiscal challenges. The government will be anxious about running into Phase 2 of the Pensions Investment Review. But they needn’t be; through working with the pensions industry and understanding the needs of members, a better future is possible. The focus should be using Phase 2 as a growth catalyst that people across the country feel good about. A package of pensions measures that are attractive to savers, employers and government is the perfect solution. One that balances the challenges of today with later life financial independence. This is what Phase 2 will be able to deliver, and in tandem this could dovetail with the state pension age review, as part of a holistic approach to better pensions.”
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