Marvin OnumonuAs expected, the Chancellor’s Spring Statement largely focused on broader economic trends, rather than implementing sweeping policy measures – thus leaving the pensions market untouched.
Indeed, Mike Ambery, retirement savings director at Standard Life plc, said the Spring Statement was more of an economic update than a platform for new pension policy.
Ambery explained that the most significant development for the sector this year is expected to come from the Pension Schemes Bill, which is due to gain Royal Assent later in 2026
He said: “The main statement of note was the Government reaffirming benefit upratings and reiterating that the full new state pension will rise by 4.8% from April to £241.30 per week (£12,547 annually).
“A combination of pressure on the public purse and a commitment to firm fiscal rules mean attention will inevitably shift to the next Autumn Budget.
“For pension policy a notable feature of this Statement has been what was not announced.”
Ambery added: “One welcome aspect has been the absence of speculation around pension reliefs and allowances or talk of structural reform.
“Over the past two years, repeated conjecture about potential changes has not helped people’s confidence and trust in long-term saving.
“Stability matters, and avoiding another cycle of uncertainty later this year would be welcome for both individuals and employers planning ahead.”
He said: “While today was quiet, the impact of the last two fiscal events is still being felt.
“The 2024 decision to bring unused pension funds into scope for Inheritance Tax from April 2027 – now only a year away – primarily affects wealthier savers with larger pension pots and estate planning considerations.
“For most people, pensions remain a highly tax-efficient way to save – however the change has altered how higher-value pots are viewed in intergenerational planning and prompted savers and advisers to revisit other strategies.”
He added: “The more recent decision to cap salary sacrifice at £2,000 from 2029 – announced at the 2025 Budget – risks being a backward step for workplace saving and could materially reshape the pensions landscape in the years ahead.
“Salary sacrifice has long been one of the most effective and straightforward ways for employees to build retirement savings, and restricting it will make saving more expensive, reduce take home pay for some, and potentially discourage both individuals and employers from contributing as much as they otherwise would.
“At a time when millions are already under saving for retirement, any policy that adds cost or complexity risks pushing people further away from financial security.
“It’s therefore likely that debate around this measure – and its wider impact on confidence in the pension system – will continue well beyond this year.”
Ambery noted the Government’s drive for greater scale in Defined Contribution (DC) schemes could improve value for money and governance, and unlock broader investment opportunities.
The introduction of default decumulation solutions and measures to address the growth of small pots are also expected to improve efficiency and member engagement.
Ambery said: “We also expect an initial update in the coming months from the Pensions Commission on retirement savings adequacy.
“The scale of the challenge is significant, with research from the Standard Life Centre for the Future of Retirement* showing that over half (54%) of Defined Contribution savers retiring between 2025 and 2060 are expected to be either undersavers or financially struggling.
“These newly retired groups are projected to peak between 2040 and 2044, meaning millions risk reaching later life facing a shortfall unless action is taken now.”
Ambery added: “Pensions are inherently long-term vehicles, and strategic, cross-party reform is often more effective than short-term fiscal intervention.
“The last Pension Commission laid the foundations for auto-enrolment, transforming participation in pension saving.
“A similarly considered approach today would provide greater certainty for savers and employers alike.
“For now, pensions stay steady – but the real shape of the future will be cast by the reforms still to come.”
