This document sets out the UK Department for Work and Pensions' strategy for putting in place arrangements that result in the provision of pensions.
The UK’s pension system is in need of reform. There are two primary reasons for this:
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the UK has an ageing population. Without reform, supporting the increasing proportion of pensioners in the population will put an increasing financial burden on those of working age; and
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working age people are not saving enough to meet their expectations of income in retirement.
The Government has already begun to set in train a series of reforms to meet these challenges. In particular it has:
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brought forward plans to increase State Pension age;
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set out proposals to create a single-tier State Pension to provide a firm foundation for saving for retirement; and
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introduced automatic enrolment into workplace pensions to increase the numbers of those saving privately for their retirement.
However, there is more to do. Critically, it needs to be ensured that those people saving privately for their retirement are doing so in high-quality schemes that meet their needs. Meeting the needs of consumers will help to increase confidence in the pension system and help people to realise their expectations of income in retirement.
This strategy sets out the key issues which need to be tackled to reinvigorate workplace pensions and achieve the DWP's objectives.
For DB schemes, the Government has been examining ways to ease the regulatory burden on employers, whilst protecting the benefits of scheme members. For DC schemes, which many people will be saving in through automatic enrolment, we are working to ensure the regulatory framework provides a safe canopy around schemes that sets appropriate parameters and supports good governance, without restricting innovation. The Department for Work and Pensions (DWP) has examined its occupational pensions regulation as part of the Government’s Red Tape Challenge initiative: this suggests the legislation is largely fit for purpose, but we are looking at simplification in the disclosure regulations.
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© Department for Work and Pensions
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