News | December 7, 2023


On 22 November 2023, the Chancellor delivered his Autumn Statement, which provided key developments to the Mansion House Reforms that were announced on 10th July – click here for our article in Part 4 of October 2023 Pensions Compass.

As we begin to unwrap the implications for both DB and DC schemes below, it is clear that many of the reforms will be subject to future consultations and legislation before the changes take effect:

  • The Autumn Statement provided more concrete plans surrounding DB scheme surpluses. The Chancellor announced a reduction in the authorised surplus repayment charge from 35% to 25% from 6 April 2024. The government will also consult on changes to rules around DB surplus repayment, including new mechanisms to protect members (click here for the article in Part 1 of this Pensions Compass) and to incentivise investment by well-funded schemes in assets with higher returns. The latter will be encouraged by a facility for 100% Pension Protection Fund (“PPF”) coverage for DB schemes that opt to pay a higher levy.
  • The Chancellor signposted fundamental changes to the way in which the PPF operates in his Mansion House speech. The government has further announced a consultation this winter on how to consolidate smaller DB schemes considered to be “unattractive to commercial providers” into a new statutory vehicle run by the PPF.
  • The FCA will consult next spring on the next steps of the new Value for Money Framework. Schemes will be required to compare themselves against others in the market, including large scale schemes, to ensure they are delivering value for their members.
  • There are now 11 signatories to the Mansion House Compact after Aon and Cushon joined the largest players in the DC workplace market in a pledge to allocate at least 5% of their default funds to unlisted equities by 2030.
  • Earlier this year DWP and HM Treasury launched a consultation focusing on: trustee skills and capability, the role of advice and barriers to trustee effectiveness. The government has published a response to its call for evidence, confirming that the Pensions Regulator will establish a register of trustees along with further guidance around investment decisions and alternative assets.
  • The government confirmed the deadline for the consolidation of Local Government Pension Scheme (“LGPS”) assets has been accelerated to March 2025. Additionally, LGPS guidance will be revised to implement a 10% allocation ambition for private equity investments, which the government estimates will unlock around £30 billion.

Further key developments from the Autumn Statement include:

  • The government plans to launch a call for evidence on a lifetime provider model to tackle issues with “small pot” pensions, looking to pave the way for individuals to maintain one pension pot for life.
  • The multiple default consolidator model will be introduced, enabling a small number of authorised schemes to act as a consolidator for eligible pension pots under £1,000.
  • A Growth Fund will be established within the British Business Bank (“BBB”) to enable access to the BBB’s pipeline of opportunities, creating further investment opportunities into UK businesses.
  • The government is publishing an update proposing to place duties on trustees of DC occupational pension schemes to offer decumulation services and products at an appropriate quality and price when savers access their pension assets.
  • The Triple Lock will be maintained and state pension benefits will be increased in line with average earnings by 8.5% from April 2024.
  • The government will legislate in the Autumn Finance Bill 2023 to remove the Lifetime Allowance – click here for the article in Part 3 of this Pensions Compass.


The Autumn Statement goes some way to develop the pension reforms signposted in the Chancellor’s Mansion House speech. The main themes centre around unlocking investment into new areas while bolstering returns for pension savers. There is a clear focus on consolidating the pensions market, creating a smaller pool of larger schemes and increasing value for money for members.

Reforms to return of surplus rules indicate the government’s desire to remove barriers for employers to access these funds in the future. The 10% reduction in the authorised surplus repayment charge will be seen as good news by employers and may incentivise well-funded schemes with a focus on growing returns for the benefit of members and sponsors alike. Trustees should, however, consider and take advice on their fiduciary duties before deciding on how and in what proportions to allocate any surplus. In most cases, the final figure for the surplus will not be known until schemes have allocated all other liabilities on scheme windup. In this month’s Pensions Compass, Justin McGilloway considers the changes to surplus rules in further detail.

A number of proposed measures are, however, in their infancy and are subject to consultation and additional legislation. It may be some time before tangible progress is seen. In an announcement earlier this month, the Shadow Chancellor indicated that a future Labour government would examine the UK’s pensions system to ensure “it delivers the full potential for British savers and UK plc”. With a General Election on the horizon (by January 2025 latest), trustees and members alike may need to grapple with further regulatory changes in the near future. For the time being, we watch this space.

You can read our Autumn Statement bulletin here.