Reader TTS

Warning for millions of workers getting £6,000 pension boost in megafund shake-upThe report says: “It is important to recognise the actual benefits will differ for all savers and may be

higher or lower.”NewsJames Rodger Content Editor10:53, 01 Jun 2025The report says: “It is important to recognise the actual benefits will differ for all savers and may be higher or lower.” A

warning has been issued over the Labour Party government's megafunds plan which it says could cause the average worker to gain £6,000 in their retirement fund as a result.

But that figure from the Labour Party is based on a specific set of assumptions, experts have warned. The report says: “It is important to recognise the actual benefits will differ for all

savers and may be higher or lower.”

‌ Helen Morrissey, the head of retirement analysis at Hargreaves Lansdown, says that scale is important in delivering better outcomes for savers, but it “must not come at the cost of

reducing competition, member choice and much needed innovation”.

‌ READ MORE Lloyds Bank brings in big change and anyone who is in a 'couple' will benefit

She adds: “If the market is to thrive, then there needs to be space for smaller, innovative providers. It’s a lesson learned in the retail banking market, where competition from smaller,

challenger banks has put pressure on larger incumbents to improve user experience and product offerings.”

Article continues below Tom Selby, the director of public policy at the advice firm AJ Bell, says the power “essentially puts a gun to schemes’ heads and will create those mandatory targets

in all but name”.

He adds: “There is a clear danger that conflating government policy goals – namely driving higher levels of investment in the UK and ultimately economic growth – with those of savers and

retirees means the latter will be risked in pursuit of the former. It is vital the needs of pension scheme members remain the priority.”

“Many of the claims about the benefits of these reforms to pension savers and retirees need to be taken with a fistful of salt,” he says.

Article continues below “While there may be some efficiency benefits to consolidation, these are difficult to quantify with certainty, and reducing competition in the market may stifle

incentives to deliver innovation. In addition, private equity investing is notoriously high-cost and high-risk, meaning it is entirely possible people will end up worse off if those

investments fail to perform over the long term.”