Pension fears grow as Labour wins vote to take control of private pots in 'another attack on savers'

Temie Laleye
Fri, 17 Apr 2026 06:58:21 +0000

MPs have backed Government plans giving ministers the authority to direct how pension schemes invest billions of pounds in retirement savings.

The House of Commons approved a "reserve power" that would allow the Government to compel pension providers to put money into private markets and other assets.

This measure sparked significant concern when first proposed last summer, with industry experts warning it could endanger people's retirements by removing investment choices from trustees and professional fund managers.

The House of Lords rejected the original proposal last month, prompting ministers to return with a revised version that secured approval from the Commons.

The vote saw 276 MPs back the measure against 155 who opposed it.

Conservatives fought against the proposal, with shadow work and pensions secretary Helen Whately describing it as "another attack on savers."

Sir Mel Stride, the shadow chancellor, warned the power could enable Rachel Reeves to use pension savings as an "economic bailout."

The Tories have promised to scrap the policy should they win the next election.

Despite the Commons victory, the legislation must now go back to the House of Lords for further consideration, where it previously faced defeat.

The Government had previously secured a voluntary agreement with major pension providers in May 2025 known as the Mansion House Accord.

Under this deal, 17 providers controlling 90 per cent of pension savings committed to putting at least 10 per cent of their assets into private markets by 2035, with half of that going to British investments.

Ministers announced the following month they would keep a reserve power to enforce these targets if the voluntary approach failed.

The Lords initially blocked the measure because it contained no clear limits on how much investment could be forced.

Following pushback from the pensions industry, the Government scaled back its proposal to match the Accord's terms, capping any mandated investment at 10 per cent of assets with 5 per cent directed towards Britain.

Sir Mel Stride argued the revised proposal still needed to be abandoned entirely, stating: "Your savings should be invested in your best interests not to fund the pet projects of Rachel Reeves."

He added: "Under a Conservative Government your pension pot will be there for you and you alone, not for Rachel Reeves to bail herself out of the economic mess she has created."

Ms Whately warned that Labour had sought control over £400billion in private pension savings, declaring: "That money is not theirs to spend."

She cautioned that if confidence in pensions erodes, people might leave auto-enrolment schemes altogether, leaving them worse off in retirement.

Baroness Ros Altmann, a former pensions minister, said peers remained "determined to reject the Government mandation of pension investment decisions."

She warned the proposals would give future ministers broad powers to channel money into "politically favoured assets, even if pension managers have decided this is not in their members' best interests."

The baroness added: "There is no reason to believe the Government knows better than professional managers how to invest members' money."

A Government spokesman defended the approach, saying the reserve power exists only as a backstop to reassure providers that the whole market would move together, adding they did not expect to use it.