David Robbins questions whether a headline in the DWP’s report is responsible.
DWP’s press release about the Pension Schemes Bill delivering a “retirement boost of £29k” is absurd for obvious and non-obvious reasons.
First, the obvious part.
– The projected £29k boost is an average, not a uniform uplift, and is based on a whole career. (So today’s… pic.twitter.com/azCyKUADY3— David Robbins (@David_J_Robbins) April 29, 2026
I do not get the feeling TPR are comfortable with DWP’s estimate of how their reforms will play with the public. Here’s what David objects to and he wonders if TPR feel the same way.
I object not to the news that Pension Schemes Act will improve the pensions of ordinary people but that it supposes people will see their pension as a pot with £29,000 more in it.
Firstly, what people will see will not be a pot value on the pension dashboard but a pension.
Secondly that elsewhere DWP is encouraging people taking the pension risk to get a better pension.
DWP advertisement at the launch of CDC workplace pensions last October.
The notorious prediction by “better”, the DWP foresee up to 60% better is based on number crunching from actuaries and researchers. What it does is to convert people’s expectations of a pot to an expectation of a pension.
This lack of consistency in presenting DC pensions to the country is distressing. People are confused enough about “pensions”. Telling them that the Pension Schemes Act is expressing the default guided retirement income that the Pension Schemes Act will give them as a “pot” shows that no one has taken charge of the message to the public.
Or is it the public that this is aimed at?
Here is David Robbins post that hides behind his tweet
DWP’s press release about the Pension Schemes Bill delivering a “retirement boost of £29k” is absurd for obvious and non-obvious reasons.
First, the obvious part. – The projected £29k boost is an average, not a uniform uplift, and is based on a whole career. (So today’s workers would on average benefit less, as would those who don’t have full careers).
– The £29k is calculated using highly uncertain assumptions around several overlapping policies. DWP’s impact assessment says
“the actual benefits will differ for all savers and may be higher or lower.”
– A little over half of the £29k comes from the value-for-money regime. DWP gave this policy a “red, high impact” rating for “analytical risk”, noting that
“small changes in returns would significantly impact monetization (due to compounding) and future returns are highly uncertain”.
But a quirk of the calculation makes suggestions that £29k is a meaningful figure for most workers even less appropriate. The value-for-money regime is assumed to boost average returns by forcing the worst-performing schemes out of the market.
That doesn’t affect savers in other schemes. So more than half of the “£29k comes from a weighted average of “zero” (most people) and “lots” (some people). And what does “£29k” mean when we’re looking decades ahead?
DWP’s estimate is in today’s earnings terms – so, on assumptions about earnings growth outsripping inflation, the £29k that people would benefit from would buy more than twice as much as £29k does today.
On the other hand, this is a boost to the value of pension pots from which withdrawals are mostly taxable. So the boost to retirees’ spending power would be <£29k (in today’s earnings terms).
I can only presume that someone in DWP’s press office keeps insisting that they need a number to sell the story, and
“there are good reasons to think that this package of measures will improve outcomes but how much is highly uncertain”
isn’t a strong enough line. For context, on DWP’s assumptions, the £29k is a roughly equivalent effect to increasing default contribution rates from 8% to 9.5%, but without the pain of paying more. So it’s well worth trying to do that – but preferably without pretending that gains of this magnitude are nailed on.
DC schemes will improve following the implementation of the Pension Schemes Act but..
It is time that we promoted pensions consistently. David Robbins criticises the presentation of £29,000 from one perspective, I criticise it from another. Either way, the DWP must find a way of talking about workplace pensions that talks meaningfully to the 20m saving for one.
