Shadow Pensions Minister, Helen Whately, has warned that mandating pension scheme investment would represent a 'quiet power grab' by the government and a 'tectonic shift' in the UK pensions system.

Speaking at the Pensions UK Investment Conference 2026, Whately criticised the mandation powers included in the government’s Pension Schemes Bill, arguing that they would allow ministers to direct pension investments and undermined long-standing principles around trustee independence.

Whately said the clause enabling mandation would give ministers the power to require defined contribution (DC) schemes to invest a proportion of their default funds in government-specified assets.

“That is a quiet power grab,” she warned.

She also described the proposal as a “tectonic shift” in how pension investment decisions could be influenced, moving from governments shaping incentives to directing allocation.

Whately argued that such powers could allow governments to channel pension savings into politically favoured sectors rather than investments chosen in savers’ best financial interests.

“Pension savings do not belong to ministers. They belong to the people who worked hard, saved diligently and did the right thing.”

She also warned that mandation could place trustees in an “invidious position”, forcing them to choose between following government direction or fulfilling their fiduciary duty to act in members’ best interests.

“If the concern is that pension funds are not delivering strong enough returns or investing enough in the UK, there are far better ways to address that,” she stressed, arguing that forcing allocations to politically chosen sectors “doesn’t fix the underlying problem”.

Instead, Whately suggested the government should focus on removing barriers to UK investment and improving the investment environment, rather than mandating where schemes allocate capital.

Her comments come amid ongoing debate over whether the government should compel pension schemes to invest more in UK productive assets, with the Minister of State for Work and Pensions, Baroness Maeve Sherlock, stating that the bill included a reserve power on asset allocation that was designed as a backstop to Mansion House Accord commitments, and the government did not expect to use this power.

Meanwhile, Pensions Minister, Torsten Bell, has previously insisted that the industry should “chillax” and maintained that the power was intended only to ensure the industry meets the commitments it has made, such as the Mansion House Accord, not to interfere with trustees’ fiduciary duties.

However, Whately said this was not a sufficient justification.

“If the argument for the power is that it probably won’t be used, you’ve already conceded that you cannot justify having it,” she said.

Whately also warned that once such powers existed, future governments could use them for a wide range of policy priorities, and that directing pension savings through default funds would disproportionately affect automatic enrolment savers.

“In other words, those with the least voice will bear the greatest risk,” she added.

Whately urged the industry not to accept the proposals as inevitable, stressing that there was still time to influence the legislation as it progresses through parliament.

“I know many people in the sector think mandation is a done deal and you just have to suck it up. Not so,” she told delegates. “The bill is still going through parliament.”

She added that there was still “an opportunity” in the coming weeks to try and get the government to change tack.

“If you believe in those principles, you must be prepared to defend them,” she stated.

“Pensions do not belong to the government. They belong to the people who have earned them.”

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