Speech

Speech at the Pension and Lifetime Savings Association Conference 2025

Minister for Pensions Torsten Bell Speaks at the Pension and Lifetime Savings Association Conference 2025 in Edinburgh.

• From: Department for Work and Pensions and Torsten Bell MP
• Published: 11 March 2025

• Location: EICC, Edinburgh
• Delivered on: 11 March 2025 (Transcript of the speech, exactly as it was delivered)

Thank you to the PLSA for the invitation to speak바카라 사이트�

바카라 사이트�and for bringing us all to Edinburgh바카라 사이트�

바카라 사이트�the city my first boss in politics, Alistair Darling, represented and loved.聽

It is always a pleasure to come바카라 사이트�

바카라 사이트�well almost always.聽

Because it can trigger traumatic flashbacks.

One stands out.

Of a pre-dawn drive across from Glasgow back in 2014바카라 사이트�

바카라 사이트�to accompany Alistair to the Andrew Marr show on the Sunday just days before the referendum.

It바카라 사이트檚 not a great distance, nor is the traffic bad at 5am바카라 사이트�

바카라 사이트�.but it felt like an eternity given the weight of events.

Events that could have had seismic repercussions for the whole UK바카라 사이트�

바카라 사이트�and for this city바카라 사이트檚 pensions, and financial services, industry.

Whenever I hear partisans of Manchester and Birmingham compete over which is the UK바카라 사이트檚 second city바카라 사이트�

바카라 사이트�I gently remind them that,聽when it comes to聽productivity, there바카라 사이트檚 no contest: it바카라 사이트檚 Edinburgh.聽聽聽

I was also here last August for a rather more light-hearted kind of trauma.

I was due to speak at the brilliant book festival바카라 사이트β�

바카라 사이트�and had plenty of time spare ahead of a 7pm event.

Or at least I would have done, if it actually had a 7pm start바카라 사이트�

I was ambling under the castle when my team rang.

There had been a mix-up and the event started at 6.

It was 5.45.

This was an event on a big, serious, topic: the UK바카라 사이트檚 economic stagnation.

But rather than pondering that I now had a rather more practical question바카라 사이트�

바카라 사이트�how fast can a newly elected MP walk, or run, up the hills of this city while retaining a shred of dignity in transit and upon arrival.

Quite fast it turns out is the answer바카라 사이트�

바카라 사이트�although opinions differ on much dignity was retained.

This is all a long way of saying particularly thank you to the PLSA for organising today바카라 사이트�

바카라 사이트�and sparing us any short notice changes to the schedule.

So we can give pensions the unflustered attention聽it聽deserves.聽聽聽

Today I want to step back to focus on the big picture바카라 사이트�

바카라 사이트�of where our priorities must be as聽our聽defined contribution saving landscape matures바카라 사이트�

바카라 사이트�and defined benefit schemes see their funding positions changed materially.

On the former my big argument is we have to pay more attention to returns for savers바카라 사이트�

바카라 사이트�rather than just to costs, or savings rates 바카라 사이트� important as both those are.聽

Celebrating the success of auto-enrolment can no longer be a substitute for answering the harder question:

What does the聽best聽landscape for those savings to be managed in look like?聽

Both to maximise returns for savers바카라 사이트�

바카라 사이트�and to ensure those savers live in a country that is investing and growing again after a long decade of聽economic聽stagnation聽

Now, our view is that scale does matter.聽

We want fewer, bigger, better pension schemes.聽

That is already the direction of travel 바카라 사이트� for a聽whole聽host of reasons.聽

We are merely providing extra wind into the consolidation processes바카라 사이트� sails.聽

Of course, some smaller schemes deliver great value for money.

But for the market as a whole, and savers on average, consolidation is desirable.聽

Larger schemes are better placed to invest in more productive asset classes.聽

This is a diversification as important as that of geography, which rightly gets聽so聽much attention.

Scale also helps reduce costs 바카라 사이트� and increases bargaining power.聽

That聽both can help provide the headroom for building investment capability바카라 사이트�

바카라 사이트�or just better returns for members.

Around the world we also see that scale matters for the nature of ownership.聽

Only large pension schemes can provide active, engaged ownership바카라 사이트β�

바카라 사이트� of the kind that presses management not just on short term returns today but on whether they聽can聽deliver over the long term.

Now, scale聽of course聽is an enabler of change, and聽it is聽very far from a silver bullet.

One part of interlocking reforms.

Including reforms to focus more on value, and less narrowly on cost or price.聽

I바카라 사이트檓 grateful for the support there has been for the proposed value for money framework.

It will help focus minds.

Employers聽including any in the room today聽will have no excuse for ignoring what matters most to their employees.聽聽

But we also need to focus on value in debates and, to be frank, in sales pitches.

Now why do I focus on enabling productive investment?聽

Because we do so little of it.聽

DC pension funds allocate 3% to infrastructure and 0.5% to private equity.

That compares to an 11% infrastructure allocation in Canada, and 5% to private equity in Australia.

Every percentage point counts,聽or part of a percentage point matter聽when this investment can deliver not only returns for savers바카라 사이트�

바카라 사이트�but also contribute to economic growth.

and聽if you want a simple summary of the government바카라 사이트檚 economic strategy this is it:

It바카라 사이트檚 time for Britain to start investing in its future again.

Again, this shift to investing in a wider range of assets is聽again聽one we are encouraging rather than instigating.

Many of you have told me about changes you are already delivering바카라 사이트�

바카라 사이트�building new capacities or partnering with others.

I want to acknowledge the work going on across the industry to realise this shift.

And from learning from parts of the industry that have been doing this for decades.

I particularly want to welcome the聽ambition to go further through voluntary commitments.

This work is ongoing, under the leadership of the PLSA, City of London and the ABI바카라 사이트�

I聽want to聽thank them all for it바카라 사이트β�

바카라 사이트� I look forward to seeing the results in the coming weeks바카라 사이트�

바카라 사이트�and will weigh them heavily as we finalise the Investment Review聽that Zoe talked about.聽聽

Now everyone in this room,聽given you바카라 사이트檝e signed up and I suspect will be here for three days, loves talking about pensions.

But we聽all聽know, higher investment is about far more than pension reform.

That바카라 사이트檚 why we encourage you to focus on how the overall strategy, how the pensions reform sit within that wider argument.

It聽also聽requires a supply of investable propositions, not just the existence of capital.

Across the board we are working to grow that pipeline聽and to make it more visible.聽

In June we will set out our 10-year infrastructure strategy.聽

The British Growth Partnership is there to help bring VC investment opportunities to pension funds.聽

Our work with local and regional government will highlight investable propositions聽right聽across geographies.

Investment propositions聽will聽also need to be visible in another sense바카라 사이트�

바카라 사이트�they actually need to get built.聽

We have already got back in the habit of swiftly granting permissions for the likes of solar farms and reservoirs.

Permissions聽which previously policy makers seem to have decided Britain could do without.

And today we바카라 사이트檝e introduced the Planning Bill to make sure we聽do聽get homes and infrastructure built.聽

If we바카라 사이트檙e going to invest once again바카라 사이트�

바카라 사이트�we have to make it possible to build聽it聽once again.

Now聽in many ways, elements of our approach build on the success of the Local 바카라 사이트 Pension Scheme.

At 拢400bn it is not just one of the聽world바카라 사이트檚聽largest聽schemes聽in the world바카라 사이트�

바카라 사이트�but one of the fastest growing, projected to reach 拢1 trillion by 2040.聽

Now聽given that, we must reflect on what is working well, and what more we can do.聽

One clear objective is reducing fragmentation.

Minimum standards for asset pooling are an important step바카라 사이트�

바카라 사이트�and again there is lots of progress underway.聽

Thank you to those who have prepared pool transition proposals, all of which we have now received.聽

A great deal of time and energy has clearly gone into them.

We put the onus on the LGPS to come forward with creative and collaborative plans.

And聽we are now considering if the proposals have met that ask.聽

You have all asked for clarity as quickly as possible and I바카라 사이트檓 delighted to be meeting聽each and every聽pool in the coming weeks.

And because it is important聽that聽concrete progress is made바카라 사이트�

바카라 사이트�I am today confirming that we聽will聽plan to stick to the timeline of March 2026.

The pooling project began 10 years ago.

By this time next year, our world class LGPS will be made up of large pools of professionally managed capital바카라 사이트�

바카라 사이트�accountable to Authorities via robust governance structures바카라 사이트�

바카라 사이트�and delivering for members and their communities.聽

On the Investment Review more generally, it will be finalised in the coming weeks.

The final report will be all the better for the consultation responses we have received.聽

It 바카라 사이트� and the wider changes promised in the Kings Speech - will form the basis of the Pensions Bill바카라 사이트�

바카라 사이트�which I aim to introduce before the summer recess.

That Bill brings me to the 拢1.2 trillion in DB schemes and the incredibly important role these schemes have to play.

We know that the market is already innovating.聽

Hence our commitment to legislate for a permanent regime for Superfunds.

Today바카라 사이트檚 拢160bn of surplus is a good 바카라 사이트榩roblem바카라 사이트� to have.

Infinitely preferable to the previous problem: perma-deficits.聽

Surplus flexibilities will allow more well-funded DB schemes to release resources back to business and scheme members.

Where it is safe to do so.

And where trustees agree.聽

They are best placed to determine, in consultation with employers, the appropriate use of any surplus in their scheme.

As an aside, some may want to examine the position of members with non-indexed pre-1997 accruals when considering the use of any surplus.聽聽聽

I look forward to sharing more details with you in the response to our Options for DB schemes consultation this Spring.聽

And we are considering proposals to allow the Pension Protection Fund greater flexibility to reduce the levy it collects from pension schemes, when it is not required.

I recognise this can all sound like바카라 사이트�. a lot.

Especially given wider changes 바카라 사이트� dashboards聽and the rest.聽

There are limits on any organisations ability to deliver.聽

I take those constraints聽very聽seriously.聽

Not everything that could be legislated for will be legislated for in the forthcoming Bill聽for exactly that reason.聽

And we owe it to you to provide a clear roadmap of how these changes fit together.

Now I want to end on the big picture, before my talk of capacity constraints exhausts your capacity to feign interest.聽

It바카라 사이트檚 helpful to consider how 바카라 사이트渢he pension problem바카라 사이트� has changed.

Not over recent months聽which is too often the focus聽but recent decades.聽

Now聽here바카라 사이트檚聽an overly simplistic view, but still a useful one, is as follows.

The 1990s聽pension聽problem was this:聽

How do we run pension schemes, and regulate them, to cope with the danger that some employers go bust 바카라 사이트� leaving employees without the pensions聽they were聽promised?

That is a problem regulation, and more recently a good dose of luck, helped answer.

The problem of the 2000s was different:

How do we deal with the disaster that swathes of people no longer build up any pension savings, never mind any firm pension promises?聽

Again, policy provided an answer in the form of automatic enrolment.聽

In both cases solutions were found聽and that should give us confidence for our own challenges today.聽

But in both cases we took too long to find them.聽

Innovation in face of a chronic problem, rather than a crisis is not easy바카라 사이트�.聽

바카라 사이트�for policy makers, or anyone else working in this area聽

What is today바카라 사이트檚 problem?

The consensus is just to say adequacy, due to insufficient savings.聽

I agree, the levels of contribution is an issue but聽I바카라 사이트檇 put the problem slightly聽differently.聽

Today바카라 사이트檚 problem is how do we deliver higher returns for savers, so they can have a decent standard of living in retirement without asking any more than is necessary of their standard of living in the here and now.聽

Or asking them to become a pensions expert聽바카라 사이트� which is your job.

Getting absolutely the best value for savers is the priority to any wider debate on savings levels.

That바카라 사이트檚 why phase 1 of the pensions review on the landscape, and the pensions Bill that will help reduce costs in the system and put decumulation on a firmer footing, must come before phase 2 on adequacy.聽

The damage done by poor returns 바카라 사이트� including during decumulation - maybe feels less binary and catastrophic than the risk of Maxwell style broken promises바카라 사이트�

바카라 사이트�but it바카라 사이트檚 a mistake to underestimate its impact on savers, which can in some cases be just as great.

So that is today바카라 사이트檚 exam question.

We are making good progress.

And I look forward to answering it바카라 사이트�

바카라 사이트�with all of you over the months and years to come.

Thank you very much

Published 11 March 2025