Minister of Pensions Introduces "Dollar for Dollar" Program
On July 22, 2025, Pensions Minister Torsten Bell hosted a groundbreaking roundtable, marking the launch of the "Pound for Pound" initiative. The event, attended by major pensions providers such as Aviva, L&G, Smart Pension, TPT Retirement Solutions, NatWest Cushon, and People's Pension, aimed to redefine the UK pensions market by focusing on Value for Money (VfM) assessments.
The discussion at the roundtable focused on moving the UK pensions market beyond cost-based comparisons. The participants explored innovative methodologies to measure pension scheme value, drawing lessons from Australia's superannuation system, particularly its Super Ratings model. This model benchmarks and showcases scheme value effectively, providing a valuable blueprint for the UK.
The "Pound for Pound" initiative is a pilot exercise designed to test value-based metrics in the UK pensions market. The findings from this pilot will inform the Government's Value for Money (VfM) consultation, which is expected to shape regulations detailing how VfM assessments will operate.
The aim of the initiative is to support a cultural shift in the Defined Contribution (DC) pension market towards prioritising pension outcomes beyond contribution levels. This focuses on the importance of rates of return and the risk borne by individuals, emphasizing the need for a more holistic approach to pension scheme evaluation.
The Pension Schemes Bill 2025, expected to receive Royal Assent in early 2026, provides the statutory framework for new value for money assessments in DC pension schemes. The implementation and data publication of these assessments are scheduled to start by 2028. The findings from the "Pound for Pound" pilot and similar expert discussions will contribute to the development of the Pension Schemes Bill 2025.
Torsten Bell emphasized that further mandates for increasing contributions are unlikely. Instead, the focus is on improving scheme performance and helping savers get better value. This aligns with the outcomes of the roundtable and ongoing consultations, which aim to ensure that pension providers are held accountable not just for contributions but for delivering better pension outcomes.
The "Pound for Pound" roundtable serves as a foundational step for applying world-class assessment techniques to the UK pension landscape. The initiative is designed to ensure that pension providers are held accountable for delivering better pension outcomes, a priority echoed in government policy aiming to close inequalities and improve retirement income adequacy. This aligns with broader government goals to finish reforming the private pensions system with a strong emphasis on fairness, sustainability, and effective outcomes for savers.
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