The countdown to Christmas may have begun for many, but for the pensions sector, all eyes are firmly on the fast-approaching Autumn Budget.

With speculation mounting that Chancellor, Rachel Reeves, could target salary sacrifice, industry concerns over the impact of pre-Budget rumours continued to intensify this week.

Fresh research from the Association of British Insurers (ABI) revealed that nearly two-fifths (38 per cent) of Brits would save less into their pension if salary sacrifice were capped.

Experts warned the potential change could have “damaging” consequences for long-term saving, particularly at a time when retirement confidence is already slipping.

Indeed, the latest UK Retirement Confidence Index from Nucleus showed confidence among UK adults has fallen to its lowest level since the index launched.

The overall score now stands at 4.2 out of 10, down from 4.6 in 2024 and 6.9 in 2023, reflecting what the provider described as a “worrying” downward trajectory across all age and gender groups.

While the government has yet to confirm any Budget measures, it announced that it will revisit its decision not to provide compensation to women affected by state pension age changes.

The move follows the emergence of previously unseen evidence in ongoing legal proceedings related to the Parliamentary and Health Service Ombudsman’s (PHSO) report, which found that the Department for Work and Pensions (DWP) failed to properly inform women of the changes and recommended compensation.

Separately, the government this week rejected calls for a new cross-departmental framework to tackle pensioner poverty, instead reiterating its commitment to existing initiatives in its response to the Work and Pensions Committee’s (WPC) Pensioner Poverty: Challenges and Mitigations report.

The response follows the committee’s wide-ranging inquiry and its July recommendation for a national strategy to reduce pensioner poverty across the UK.

Concerns around the state pension also remained in focus, with the WPC launching a new inquiry into the transition to state pension age (SPA) ahead of the scheduled rise from 66 to 67 next April.

The inquiry will examine whether further support is needed for pre-pensioners to bridge income gaps as SPA increases.

In addition, consultancy LCP urged the government to consider linking SPA to a fixed number of years spent in retirement - around 20 on average - rather than to a proportion of adult life.

The proposal forms part of a suite of “radical” reforms aimed at restoring long-term sustainability while protecting those with lower life expectancy.

Industry debate around the future shape of pensions provision also featured prominently at The Investing and Savings Alliance (TISA) annual conference.

Aviva managing director, Michele Golunska, said providers are grappling with a combination of regulatory reform, rising expectations and the growing use of artificial intelligence.

Digital tools, she argued, could play a key role in re-engaging disconnected savers and supporting those who “want to learn more but don’t know where to start”.

The Financial Conduct Authority (FCA) also reiterated its confidence in its forthcoming targeted support framework, describing it as a “revolutionary” step towards improving saver decision-making.

However, industry observers warned that data privacy barriers could limit the framework’s reach unless further clarity is provided.

Meanwhile, there was significant activity in the Local Government Pension Scheme (LGPS) space, with nine funds formally signalling their intention to join the expanded Local Pensions Partnership Investments (LPPI) pool.

The Devon, Avon, Dorset, Somerset, Cornwall and Environment Agency funds have signed a memorandum of understanding, alongside existing partners Lancashire, the London Pensions Fund Authority (LPFA), and Berkshire.

The milestone follows LPPI’s announcement earlier this year that it was in talks with several funds regarding an enlarged pooling arrangement.

Finally, on the regulatory front, The Pensions Regulator (TPR) has come under pressure to ensure its proposed enforcement strategy is “balanced and fair across all schemes”.

In separate consultation responses, the Association of Member Nominated Trustees (AMNT) and the Society of Pension Professionals (SPP) raised concerns about potential “unintended outcomes”, with the SPP cautioning that the regulator’s impact-based approach could be “misunderstood” as meaning smaller schemes are less likely to face enforcement action.

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