Press Releases

PRESS RELEASE : DWP unveils plans for £1.4 trillion in pension assets to deliver for savers and economy [February 2024]

The press release issued by the Department for Work and Pensions on 23 February 2024.

Department for Work and Pensions (DWP) outlines plans to make £1.4 trillion in pension schemes work better for savers and the wider economy.

  • Options include making surplus extraction easier and designing a public sector consolidator

The DWP today set out plans to ensure the £1.4 trillion held by pension schemes delivers for savers and the economy.

Plans include making surplus extraction easier for well-funded Defined Benefit (DB) schemes, alongside a public sector consolidator operated by the Pension Protection Fund.

The consultation – which runs from today (Friday 23 February) until Friday 19 April – seeks views on how the money held in DB schemes can be best unlocked in the interest of savers and for sustainable investment in the wider economy.

Minister for Pensions, Paul Maynard said:

We are in a welcome position with DB pension schemes enjoying high levels of funding, and we want to make this money work harder for savers and the wider economy. I welcome industry views on our plans to reform the pensions market.

Over the last decade most DB schemes have become better funded, with the average scheme having a funding level of 113% in 2022, compared to 104% in 2010. This has led to an aggregate surplus of £200 billion.

By supporting these schemes to invest surplus in UK productive finance assets, it is believed the schemes can help boost the UK’s leading position as a leading financial centre, creating wealth to help fund public services.

Additionally, with around 5,000 schemes operating in the UK, consolidation of the market could also further the productive finance agenda – providing greater opportunity to strengthen the economy through increased investment.

Consolidation could also continue to strengthen security for savers through economies of scale and improved governance – ensuring better outcomes for savers remain at the heart of the proposals.

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