{"id":240464,"date":"2025-07-05T16:01:12","date_gmt":"2025-07-05T16:01:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/240464\/"},"modified":"2025-07-05T16:01:12","modified_gmt":"2025-07-05T16:01:12","slug":"rachel-reeves-to-announce-review-of-workplace-pensions-contributions-heres-what-it-could-mean","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/240464\/","title":{"rendered":"Rachel Reeves to announce review of workplace pensions contributions \u2014 here\u2019s what it could mean"},"content":{"rendered":"

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Rachel Reeves<\/a> is set to announce an overhaul of the pensions regime<\/a> when she delivers a speech at Mansion House<\/a> this month. <\/p>\n

The chancellor<\/a> is due to appoint a commission to look at the adequacy<\/a> of the pensions system, including the level of savings among the self-employed, the state pension<\/a> and auto-enrolment rates. <\/p>\n

The proposal was announced last July<\/a> after Labour<\/a> won the general election, but put on hold after the chancellor\u2019s brutal tax-hiking Budget created anger at the pressure piled on businesses.<\/p>\n

\"Rachel<\/p>\n

open image in gallery<\/p>\n

Rachel Reeves is set to announce a planned overhaul of the pensions system (AFP)<\/p>\n

But two executives familiar with the plan told the Financial Times she plans to announce the commission in the 15 July speech, as she believes the pensions industry has long been ripe for reform. <\/p>\n

The chancellor\u2019s overhaul is reportedly planning to shake-up auto-enrolment rules, which mandate that staff pay at least 8 per cent of their earnings above \u00a36,240 into the pot each year, with at least 3 per cent coming from their employer. <\/p>\n

Experts, including the influential Institute for Fiscal Studies<\/a> (IFS), have warned that the current rate of contribution will leave many pensioners without enough money in retirement. <\/p>\n

Almost four in 10 pensioners who have worked in the private sector face a cliff-edge in retirement with the current contribution level, the think tank warned. <\/p>\n

It called last week for \u201cdecisive action\u201d to create a pension system \u201cfit for the next generation\u201d.<\/p>\n

It called for an end to the system of employer pension contributions only having to be made if the employee also contributes, recommending that all employees should receive at least 3 per cent of their total pay as contributions. <\/p>\n

\"Paul<\/p>\n

open image in gallery<\/p>\n

Paul Johnson warned many pensioners face a cliff-edge in retirement (PA)<\/p>\n

And the IFS called for targeted support for those hardest hit by increases in the state pension age, as well as solutions to help people manage their pension wealth through retirement. <\/p>\n

Former work and pensions secretary David Gauke said the IFS report was timed perfectly to coincide with the imminent conclusion of the chancellor\u2019s pensions review. <\/p>\n

\u201cThe government should provide a secure pension income, further increases in the state pension age should be accompanied by more support for those hardest hit, and both employees and employers should gradually contribute more to help achieve greater financial security in retirement,\u201d the ex-Tory minister, who has advised the Labour government, said. <\/p>\n

And IFS director Paul Johnson<\/a> said: \u201cThere is a risk that policymakers have become complacent when it comes to pensions. Without decisive action, too many of today\u2019s working-age population face lower living standards and greater financial insecurity through their retirement.\u201d <\/p>\n

Mr Johnson said the think tank\u2019s recommendations would \u201cshore up the state pension, help workers save more \u2013 but only in periods when they are better placed to do so \u2013 and help individuals to make the most of their pension pots through retirement\u201d. <\/p>\n

The government\u2019s review will also look at the level of the state pension, currently \u00a3230.25 per week, or \u00a311,973 per year for those who have contributed through national insurance for 35 years. <\/p>\n

Labour has repeatedly committed to the triple lock, which increases the state pension amount by the highest of inflation, average earnings growth or 2.5 per cent. <\/p>\n

The Department for Work and Pensions (DWP) was asked to comment. <\/p>\n","protected":false},"excerpt":{"rendered":"Your support helps us to tell the story From reproductive rights to climate change to Big Tech, The…\n","protected":false},"author":2,"featured_media":235177,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-240464","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114801468289861540","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/240464","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=240464"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/240464\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/235177"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=240464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=240464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=240464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}