Industry welcomes Queen’s Speech bills; calls for collaboration to help savers

The pensions sector has welcomed the inclusion of the Online Safety Bill, Data Reform Bill and Financial Services Bill in the Queen’s Speech, and called for collaboration between the government, regulators and industry to protect saver outcomes.

The Queen’s Speech, which was presented by Prince Charles yesterday (10 May), did not include an announcement on enacting measures outlined in the 2017 auto-enrolment review, which recommended expanding coverage of auto-enrolment in the mid-2020s.

However, PLSA director of policy and advocacy, Nigel Peaple, acknowledged that, due to the short-term challenges faced by the country, it was understandable that the government did not include measures to implement auto-enrolment (AE) reforms in the Queen’s Speech.

“The government has committed to introduce these measures from the 'mid-2020s' and, as employers need time to prepare, it would be good to put this on the statute book now with a gradual and clear timetable for the introduction of the measures,” he commented.

“The PLSA believes that it would also be desirable for automatic pension saving to be increased further, but not before the end of this decade, and for automatic enrolment pensions to be ‘levelled up’ so that employers pay the same as employees.”

Scottish Widows head of policy, pensions and investments, Pete Glancy, said that a new pensions bill could have been the “perfect way” for the government to mark and build on the success of AE.

“We continue to head towards a long-term savings crisis with too many people saving far below what is needed for a comfortable retirement,” he continued.

“At the same time, parts of the workforce are missing out on the benefits of AE all together, including the lowest paid in society.

“While rising costs of living mean that now may not be the time to increase minimum contribution rates, it is the right time to commence the process or reaching a consensus across government, the business community and the pensions industry as to the best way forward.”

Fieldfisher pensions partner, Jeremy Harris, noted that there was “very little” in the Queen’s Speech relating to pensions, although there were two areas he pointed to that were of potential relevance.

“The government has reiterated its intention to promote investment in infrastructure by UK pension schemes and other institutional investors, and announced its intention to introduce a Data Reform Bill to reduce the burden of the General Data Protection Regulation (GDPR) on UK businesses,” he noted.

“It remains to be seen how much impact the promotion of investments in infrastructure will have on pension scheme investments. Trustees and providers of UK pension schemes have a duty in trust law to act in the best financial interests of their own scheme beneficiaries, rather than in the wider interests of society.

“Investments in infrastructure would need to benefit scheme beneficiaries and be suitable for particular pension schemes in order for greater investment by pension schemes in infrastructure to result.

“The proposed Data Reform Bill may result in a welcome simplification of GDPR for pension schemes, which could reduce compliance costs for schemes. This will depend on the details of the proposed changes, when published".

A spokesperson for Phoenix Group added: “It is important that the government focus is drawn to closing the retirement guidance gap.

“Without this, a majority of people approaching retirement will continue to neither get guidance or advice on their financial circumstances, leaving many confused, anxious and at risk of missing out on a better quality of living in later life. It is a consumer detriment we estimate to affect 3.5 million of our customers and millions more across the UK.

“We are calling for a collaborative approach with government, the regulator, industry and consumer bodies, to develop effective solutions and improve consumer outcomes in retirement.”

Meanwhile, the government included the Online Safety Bill in the speech, which was recently updated to include paid-for advertising following an industry and regulatory body campaign.

“It is positive that the government has chosen to push forward with the Online Safety Bill and reintroduce it,” commented Phoenix Group head of financial crime prevention, Yvonne Collins.

“We have been calling for this throughout the consultation as we believe it is urgently needed to protect society, with unlicensed financial promotions and fake ads targeting the most vulnerable and we welcome its passing. It was crucial that the measures to crack down on fraudulent online advertising were not watered down.

“In the current climate with the cost-of-living crisis we are concerned that criminals could try and target vulnerable victims online and protection is now essential to be put in place to protect consumers and prevent the ability of fraudsters to scam the public.”

Royal London consumer finance specialist, Sarah Pennells, added: “The Online Safety Bill is aimed at making the UK the safest place in the world to be online and the inclusion of paid-for ads in the bill is to be welcomed.

“However, online scams and fraud are currently being committed on an industrial scale; whether that’s investment scams, pension scams or phishing scams aimed at harvesting personal details, and criminals have found the internet to be a lucrative space to operate in.”

Commenting on the inclusion of the Financial Services Bill, ABI director of regulation, Charlotte Clarke, said: “We welcome the introduction of the Financial Services Bill and the ambition to maintain and enhance the UK’s position as a global leader in financial services.

“We support the focus on growth and international competitiveness and look forward to seeing further detail in particular on the objectives for regulators to ensure there is meaningful change.

“Whilst we welcome post-Brexit reform, it’s vital the detail in the bill meets the stated objectives and delivers a prudential regulatory regime that is fit for purpose and unlocks greater investment in UK plc.”

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