Rachel Reeves slammed for ‘cowardly’ transfer that can depart tens of millions in pension poverty | Politics | News | EUROtoday

Chancellor Rachel Reeves has come beneath fireplace after indefinitely delaying the second part of a vital pensions assessment, a call branded as “cowardly” by specialists who warn it may depart future pensioners worse off.

The transfer, reportedly pushed by fears of including monetary pressure on companies, may imply employees lose as much as £35,000 in potential financial savings.

Experts say the delay dangers undermining efforts to handle dwindling pension pots and ensures tens of millions are “sleepwalking into an impoverished retirement.”

Tom McPhail, a pensions skilled, informed The Telegraph: “This Government seems to be developing an unfortunate habit of failing to carry through on promises that were made during the election campaign.

“If the Government won’t do it, they should appoint someone else to do it. To just do nothing looks cowardly.”

The delay follows rising criticism of Labour’s maiden Budget, which elevated employer National Insurance contributions and added stress to companies already grappling with financial challenges.

Under the present system of auto-enrolment, launched in 2012, workers contribute a minimum of 5% of their qualifying earnings to office pensions, whereas employers add a minimal of three%.

While participation in office pensions has surged, many argue the 8% complete contribution falls far wanting what’s wanted for a safe retirement.

Phoenix Group evaluation reveals that elevating contributions to 12% may improve a typical 18-year-old’s pension financial savings by almost £96,000.

However, a five-year delay in implementing reforms may value savers £10,000, whereas a 15-year delay may imply dropping as much as £35,000.

Tim Middleton of the Pensions Management Institute stated: “It’s always been recognised within the industry that 8% was never realistically going to fund an adequate retirement.

“By delaying this second phase, it means potentially millions of people are going to have a poorer retirement outcome as a result.”

Labour’s resolution comes weeks after Reeves’s Budget, which elevated employer National Insurance contributions from 13.8% to fifteen%.

Business leaders warned the transfer may freeze pay rises, lower jobs, and shrink pension contributions.

Reports recommend part two of the pensions assessment, initially promised earlier than the tip of 2024, was shelved to keep away from further prices for employers.

This part was anticipated to deal with the problem of low contribution charges and suggest will increase to make sure employees save sufficient for retirement.

Martin Willis of Barnett Waddingham stated: “By delaying this review, there is a risk that a generation of people will struggle to retire when they want to and will struggle to get even the basic retirement.”

The Government has but to verify when part two of the assessment will start. A spokesperson stated: “Creating wealth and driving growth is at the heart of our plan for change. The Government will set out more details on the second phase in due course.”