Will Pension Funds Recover in 2024 - UK Government Perspective

Will Pension Funds Recover in 2024? – UK Government Perspective

The UK government hasn’t issued an official statement on whether pension funds will definitively recover in 2024. However, there are ongoing developments that could influence their performance:

  • State Pension Increase: The government confirmed an inflation busting increase of 8.5% for the State Pension starting April 2024. This is positive news for pensioners but raises questions about the long-term sustainability of the triple lock system that determines these increases.
  • Surplus Access for Employers: The Department for Work and Pensions (DWP) is considering making it easier for employers with defined benefit (DB) pension schemes to access surpluses. This could potentially free up funds for investment, potentially benefiting scheme members. However, the government emphasizes the need for safeguards to ensure responsible use of these surpluses.
  • Funding Regulations: The DWP is finalizing new funding regulations for pension schemes. These are expected to be implemented in April 2024 and will impact how schemes manage their finances. The exact details of these regulations are still being determined and could affect some schemes more than others.

Overall, the picture for UK pension funds in 2024 is mixed. The State Pension increase offers some relief, but long-term challenges remain. Government initiatives regarding surplus access and funding regulations could offer opportunities for improvement, but their full impact is yet to be seen.

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