The King’s Speech – what it means for you

Patrick Mill, CEO | 18 July 2024

Following Labour’s comfortable majority on 4th July, political commentators have been waiting with bated breath for the King’s Speech and the first real taste of the new government’s plans.

The speech, which is written by the government and delivered by the monarch, sets out the priorities for the next twelve months. This year’s speech was certainly packed, outlining 40 bills the government plans to pass over the next year, with the briefing notes on the announcements running to over 100 pages. It covered everything from renters’ rights and better buses to tackling people smuggling and phasing out hereditary peers in the House of Lords.

The main piece of legislation for our industry will be the Pension Schemes Bill, which promises to bring in new rules for private pension schemes. Most of the measures had already been set in progress by the previous government, like addressing the issue of multiple pots and lost funds through consolidation of small pensions, and improving investment performance by creating larger ‘superfunds’ and a Value for Money framework to ensure defined contribution (DC) schemes are delivering value.

The Bill also includes the introduction of a new requirement for pension scheme trustees to offer a retirement income solution, with default options, to help people transition from accumulation into decumulation. There are currently few details, but the briefing notes say the move “will improve outcomes for savers and is likely to lead to more funds being invested for longer, giving the potential for investments in productive assets – boosting economic growth.”

By supporting better outcomes for pension savers, the government suggests the reforms could boost the average DC pension pot at-retirement by more than £11,000.

However, although the Pension Schemes Bill is included among the government’s priorities, we don’t yet know when it will be introduced. In addition, Labour’s manifesto promised a pensions review to ‘consider what further steps are needed to improve security in retirement, as well as to increase productive investment in the UK economy’, so we can assume there is more to come in terms of future pensions policy. Watch this space.