Reaction to the King's Speech 2024

The Pension Schemes Bill announced during the King's Speech at the state opening of parliament has implications for those saving for retirement and the wider pensions industry. Our experts give their reactions to this and other plans announced during the speech.

"We welcome the new Pension Schemes Bill announced in the King’s Speech, particularly the increased focus on pension schemes to offer retirement income products or a range of products."

Paul Leandro, Partner

Since the full freedoms were introduced in 2015, the retiring and retired populations have been underserved. This is a positive step towards addressing that gap. 

However, the industry shouldn’t just fixate on building new products. Investment is needed into how the options are communicated to people. Retirement products are essentially pointless if people are not informed about them or engaged with them. Supporting people in how to make choices now and on their retirement journey is crucial. 

The elephant in the room is the inadequacy of current DC contribution levels. The new bill is silent on this. This is disappointing as it’s clear people are not saving enough for retirement, and even with new initiatives around consolidation and value for money, people will still be left with inadequate pension pots unless they save more during their working lives. This is exacerbated by gender and ethnicity gaps, which frustratingly do not seem to be covered in the bill and which is a significant concern in the current pension landscape.

"From the Pension Schemes Bill announced today in the King’s Speech, it is clear that the new Government’s agenda will take time to unfold."

Liam Mayne, Partner and Corporate Actuary

The bill’s potential to boost UK investment and drive economic growth is promising, but we must remember that the ultimate impact on pensions will depend on investment performance. 

The focus should remain on ensuring good retirement outcomes for members, particularly when considering investments in areas such as private equity, which carry significant costs and risks. 

We had anticipated a full review of the UK’s pensions landscape based on Labour’s pre-election discourse, so the inclusion of a pensions bill was unexpected. However, this could be a sign of a swift move towards improving saver outcomes and diversifying investment options. 

The urgency to address the issue of small pots is welcome, and the introduction of measures to transform savings pots into pensions is a step in the right direction.

"The Government has clearly signalled its intention to tackle gender inequality head on with a raft of radical workplace measures announced at the King’s Speech."

Melissa Blissett, Senior Consultant - Pay Gap Analytics

Flexible working becoming default for all workers is a significant step in achieving gender equity and supporting women in their careers – thus reducing the gender pay gap. And as low pay is a gendered issue too, women should reap the benefit of the introduction of a genuine living wage as well. 

But as the Government has yet to make good its promise to “take the brakes off" the economy, fulfilling these promises risks using up a large proportion of the funding earmarked for pay rises – leading to pressure for middle income earners. So employers will need to make sure they don't inadvertently hold back the career and pay prospects for middle income women, which could slow any progress on closing the gender pay gap. 

Also on employers' to do lists will be the impact of the draft equality bill (race and ethnicity) obliging businesses with 250 employees to extend their gender pay gap reporting to both ethnicity and disability reporting. All of these measures may trigger a wider review of remuneration and pay transparency – ensuring workers in different but equal job roles are being paid fairly. Global firms in particular have an eye on EU pay transparency regulation and CEO pay ratio is likely to be further scrutinised by the Labour Government.