Broadly speaking I welcome the move to consolidate pensions so that bigger funds are able to invest productively to generate economic growth, but this Bill is a missed opportunity to improve pensions and retirement for individuals. Around 12 million people are currently on track for a poor retirement, facing outcomes that could leave them financially insecure and unable to maintain their standard of living.

Liberal Democrats believe that no one should fear for their future, struggle to put food on the table, or worry about heating their home.

Too many people are confused about their pension provision and how much they should be saving in order to have a comfortable retirement. The Bill includes measures to improve public understanding of pensions which are a good start. However, we will be tabling amendments to strengthen these provisions, including:

• Introducing a clear, easy-to-understand traffic light system for all pension providers (not just some), enabling savers to quickly see whether their pension fund is underperforming.
• Ensuring everyone has the right to receive free, impartial pension advice at age 40 and again around five years before their expected retirement.

We welcome many of the provisions in the Pension Schemes Bill, particularly the consolidation of smaller pension pots into larger, more cost-effective funds that can deliver better returns for savers. However we think that the £1,000 threshold should be kept under review, with the intention of increasing it over time.

We also support encouraging UK pension funds to invest more in the UK economy. Investment in areas such as social housing and revitalising high streets could help drive economic growth and community regeneration.

On mandating that pensions must invest in the UK: we support the aim behind this, namely harnessing pensions to invest in the UK, but have grave concerns that mandating investment in the UK is the right way to do it. Mandation could reduce the returns on pension investments for pensioners, so could be counterproductive. Instead, pension funds should be required to be transparent about their investment choices and incentivised to invest more productively through the creation of appropriate investment vehicles in areas such as high streets, housing, social care and universities.

We will also seek to amend the bill to require pension funds and managers to show that their portfolio investments are consistent with the Paris Agreement, a legally binding agreement on climate change.

The Bill will repeal an old requirement and allow pension funds to distribute ongoing surplus in defined benefit (DB) schemes. We will urge the Government to consider options for either a levy or voluntary contribution scheme by which pension funds use a proportion of excess funds to help fund the Pension and Money Service (previously called the Pension Advisory Service). And we will echo concerns that extracting surpluses from schemes should only be enabled once the core purpose of the scheme – to pay members their pensions – is met.