Reeves to announce review of employee pension pots

Rachel Reeves is set to announce an overhaul of the pensions regime when she delivers a speech at Mansion House this month.

- ARCHIE MITCHELL

The chancellor is due to appoint a commission to look at the adequacy of the pensions system, including the level of savings among the self-employed, the state pension and auto-enrolment rates.

The proposal was announced last July after Labour won the general election but put on hold after the chancellor’s brutal tax-hiking Budget created anger at the pressure piled on businesses.

But two executives familiar with the plan told the Financial Times that Reeves plans to announce the commission in the 15 July speech, as she believes the pensions industry has long been ripe for reform.

Her overhaul would reportedly shake up the auto-enrolment rules mandating that staff pay at least 5 per cent of their earnings above £6,240 into the pot each year, with another minimum of 3 per cent coming from their employer.

Experts, including the independent Institute for Fiscal Studies (IFS), have warned that the current rate of contribution will leave many pensioners without enough money in retirement.