Who really controls your pension?

The Government has just stepped back from plans to give itself more influence over where workplace pensions are invested.

It sounds technical, but it raises a simple question: who should decide what happens to your retirement money?

I spoke to Helen Whateley, Shadow Work and Pensions Secretary, to break down what was being proposed, why she opposed it, and what it means for you.

In simple terms, what was the Government trying to do with pension “mandation”?
“The Government wants more influence over UK pension fund investments, particularly to get them to invest more in the UK.”

Why did you feel strongly enough to oppose it publicly?
“I don’t agree with Government having this power over pension savings. That money belongs to savers, not the Government. Ministers have different objectives from savers, usually more short-term and headline driven. Before the recent amendment, the mandation power in the bill gave the Government a truly extraordinary amount of control over pension savings. It would have allowed them to steer billions of pounds of pension funds into Government priorities – like net zero – irrespective of whether this would be good for savers.”

Supporters say this could improve long-term returns. Are they wrong, or is the issue how it’s being done?
“Trustees should be making investment decisions based on what delivers the best long-term returns for savers. If there are genuine barriers preventing schemes from investing in assets that would improve returns, those should be addressed directly — not by giving Government the power to direct investments.”

Do you trust future governments not to expand these powers once they exist?
“No. Government ministers rarely give away power; they generally seek more. Mandation in the pension schemes bill crosses a rubicon. At the moment, pension trustees decide where funds are invested always acting in the best interests of members. This is crystal clear, but with this legislation, it will be muddied because trustees will also have to fulfil what the Government is demanding. That’s why if this power does get onto the statute book, Conservatives would reverse it in Government.”

For someone reading this who has a workplace pension and has never touched it, what could this have meant for them in real terms?
“It means that the investment of some of their pension savings could be directed by Government ministers rather than by independent trustees focused solely on delivering the best returns for them.”

Is the current 10% limit acceptable, or do you believe the power should be removed entirely?
“The limit makes the Bill less bad. But given mandation is wrong in principle, it does not become right in smaller doses. The power should be removed.”

There’s a wider push to get pensions investing more in the UK. Is that a good idea in principle?
“Yes – I want to see more investment in the UK. But that should come from creating the right conditions for investment, not through mandation. That means understanding why funds are not investing more in the UK and addressing the barriers and market failures.”

Is the real issue here that most people don’t know where their pension is invested in the first place?
“Helping people better understand and make informed decisions about their pension savings is important. In fact, that’s something Government should push.”

If you could change one thing about how pensions are managed in the UK today, what would it be?
“I want to see better returns for savers so people have more to live off when they draw down on their pension. That’s why I’ve backed the ‘value for money’ concept in the Pension Schemes Bill, to shift the objectives from minimising costs to giving people a better balance of risk and return.”