Spring Statement 2025

What is this all about?

In March, Chancellor Rachel Reeves set out her plans for the UK economy during her Spring Statement. While the Chancellor announced policy measures, there were no key points around pensions, but it’s important to note the following:

1. The government is looking at options for reforms within Individual Savings Accounts (ISAs) to give people the confidence to invest. Objectives involve making stocks and shares ISAs more attractive than their cash counterpart to help people grow their wealth in the long run.
2. The Government has confirmed plans to enable well-funded and high-performing occupational Defined Benefit pension funds to invest its surplus funds. The Government will provide policy details in the spring, as part of its response to the February – April 2024 consultation exercise on Options for Defined Benefits. At trustee’s discretion, a portion of the scheme’s surplus will be shared with a sponsoring employer. The employer can then choose how to invest the shared funds, for example, using them to improve DC member outcomes. It seems that the scheme rule changes will be enabled by a statutory override, subject to trustee and employer agreement and fiduciary-duty considerations.
3. It’s understood that the Pensions Bill will be published before the summer recess and we expect there to be an announcement on the timing of the second phase of the Pensions Review in the coming months.

What does this mean for UK employees?

DC pension members with an employer who also operates a DB scheme may benefit from the investment of any surplus funding.

Please reach out to your Lockton Consultant if you would like to understand this further.