PensionBee has issued a concise manifesto of policies, urging the government to improve engagement and transparency within the savings and pensions industry.
Lisa Picardo, Chief Business Officer UK at PensionBee, commented on a number of key areas the government should be taking action on:
Maintaining the tax-free allowance on pension lump sums:
“Cutting the tax-free lump sum would be a blow to pension savers, chipping away at trust in the system and discouraging people from saving for retirement.
Savers already face shifting tax rules, and reducing this key retirement benefit would only add more uncertainty, making it harder for people to plan with confidence.
The government must commit to keeping the current allowance in place, giving savers the stability they need to build and plan for a secure future, without the fear of sudden policy changes moving the goalposts.”
10-day switch guarantee:
“Pension transfers shouldn’t take six months. As strong advocates for transparency and simplicity, we’re calling for legislation to introduce a 10-day switch guarantee, giving savers faster access to their money and greater confidence in the pension system.
With proper enforcement from the FCA and The Pensions Regulator, long transfer delays should become a thing of the past, making the management of pension savings easier and fairer for everyone.”
Lowering Auto-Enrolment age/salary threshold:
“Auto-Enrolment has been a huge success in driving increased participation rates and building pension wealth.
However, reforms have been stuck in limbo for too long.
Lowering the starting age from 22 to 18 and scrapping the £6,240 earnings threshold would give millions more workers access to pension saving from day one, expanding the reach, narrowing pension saving gaps and supporting better engagement.
Contributions made earlier in working life can be the most valuable because of compound growth.
These simple, long-overdue changes could help transform the nation’s retirement savings and must be implemented without further delay.”
Increasing Auto-Enrolment minimum contributions on pensions to 12% of earnings:
“With people living longer, pension savings need to stretch further.
The current minimum contribution amount of 8% will not be enough for most people to fund a moderate living standard in retirement (based on the PLSA’s retirement living standards work).
Raising the level of contributions is key to ensuring savers have enough for later life.
The government must set out a clear plan to gradually increase minimum employer contributions (currently 3%), giving businesses time to adapt while boosting long-term retirement outcomes.
At the same time, higher contributions should go hand in hand with policies that get savers engaged with their pensions earlier in their careers.”
Universal rate of tax relief:
“The current pension tax relief system provides greater incentives for higher earners, who receive 40% or 45% relief, while basic rate taxpayers receive 20%.
This imbalance makes it harder for lower earners to build up their retirement savings.
A flat 30% rate would level the playing field, ensuring everyone gets a meaningful boost to their pension - making saving fairer and encouraging more people to invest in their future.”
