The review has allegedly been blocked amid concerns about the impact on businesses, it has been confirmed.

Major DWP review that would see millions boost pensions by £11,000 delayed

by · Birmingham Live

A major pensions review that would see millions boost pots by £11,000 has been DELAYED by the new Labour Party government. The review has allegedly been blocked amid concerns about the impact on businesses, it has been confirmed.

Labour has delayed the second phase of a major pensions review that is aiming to boost the retirement incomes of millions by £11,000 amid concerns it would put a further burden on businesses, which are already under pressure from other tax measures announced in October's Budget.

Chancellor Rachel Reeves has stepped in to delay the second stage of the review following the backlash to her Budget after being left worried the review would demand that employers increase their pension contributions, upping their costs by billions of pounds extra.

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The review is being led by pensions minister Emma Reynolds alongside the Treasury and the Department for Work and Pensions ( DWP ). The second stage of the review was expected to be announced sometime before the end of 2024.

The DWP did not suggest that the review had been shelved "indefinitely" when approached, as suggested in the FT, but did not confirm a time frame.

A spokesperson for the DWP said: “Creating wealth and driving growth is at the heart of our Plan for Change. 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.”

Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown, said: “The news that the second phase of the pension review has been delayed is disappointing. The issue of adequacy is vital and it’s a discussion that needs to happen sooner rather than later.

"We recognise that employers and households are under strain, but this review is just the first step and should set out a long-term timetable to boost savings." Tom Selby, director of public policy at investment platform AJ Bell, said the issue was a "ticking time bomb" and "one of the most pressing issues facing society".

He added: “Labour has placed ‘fixing the foundations’ of the UK economy front-and-centre of its political strategy and it appears the much-anticipated review into pensions adequacy has fallen victim to this push for growth. 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.

"In the wake of the huge tax hit firms have been forced to wear following the budget, tackling retirement saving adequacy may be viewed as less of an immediate priority. However, 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."