DWP and Labour take drastic decision with pensioners set to lose £35,000 each

Pensioners risk losing £35,000 due to a Labour Party government and Department for Work and Pensions ( DWP ) decision. Experts have slammed the chancellor’s decision to pause a review into pensions, saying failure to act could “leave millions of people at greater risk of an income shortfall”.

Rachel Reeves has reportedly shelved plans to reform pension adequacy in a bid to avoid piling more pressure on business. A Government spokesperson at the Department for Work and Pensions hit back, saying: “We are determined to ensure that tomorrow’s pensioners are supported, which is why the Government announced the landmark two-stage pensions review days after coming into office and why the Pension Schemes Bill was in the King’s Speech.

“The interim report of the first phase was published at the Mansion House event on 14 November and the final report will be published in the Spring. Government will set out more details on the second phase in due course.” AJ Bell warned today that delaying addressing the challenge of pension adequacy means “millions of Brits will be at greater risk of facing a crisis when they reach retirement”.

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The investment platform’s director of public policy Tom Selby said: “Any review of adequacy would have to consider automatic enrolment minimum contributions which, in turn, would have raised the prospect of increasing those contributions and potentially the burden imposed on employers.”

He said: “The foundations of pensions are also shaky, and delaying meaningful action to address these problems will leave millions of people at greater risk of an income shortfall when they reach retirement.” He said: “There is widespread agreement that the current minimum levels of auto-enrolment contributions are insufficient to deliver good outcomes in later life for most people, yet we still don’t even have a firm timetable for introducing the relatively modest reforms proposed in 2017 – namely applying minimum contributions to the first pound of earnings and reducing the qualifying age from 22 to 18.”

Catherine Foot, director of Phoenix Insights, said: “Hitting pause on the retirement adequacy review could be hugely detrimental to people’s financial future.”