Dwp 'reconsiders' traffic light system rules with millions of pensioners warned

THE LABOUR PARTY G OVERNMENT PLANS TO BRING IN A TRAFFIC LIGHT SYSTEM TO RATE PENSION SCHEMES ARE BEING REVIEWED. 12:13, 22 May 2025 The Department for Work and Pensions and Financial

Conduct Authority (FCA) will reconsider traffic light system for pensions. The Labour Party g overnment plans to bring in a traffic light system to rate pension schemes are being reviewed.

The DWP will be shaking up the traffic light system that forms a crucial part of their value for money framework for workplace pension schemes, Citywire New Model Adviser. Under a change,

the DWP announced elements of a value for money framework that would see workplace pension schemes publicly ranked by metrics. Each scheme would be given a red, amber or green rating. READ

MORE UK FACES 27C HEATWAVE NEXT WEEK WITH 33 COUNTIES IN ENGLAND SET TO SIZZLE Red or amber schemes would be stopped from taking on new corporate pension business. Jon Greer, head of

retirement policy at Quilter, told NMA: "One part of me isn’t surprised that they are nuancing this because it has taken quite a while for us to get where we are. Universally, there was

concern around the red, amber, green rating [system], so I am glad." Article continues below A spokesperson for the DWP told NMA: "We do not comment on speculation." When it

announced the changes, Labour said value for money was not just focused on charges, as the cheapest schemes would not necessarily provide the best pensions in the long term. Focusing on

value rather than costs would enable providers to invest in assets which could give greater long-term returns but have higher management costs, it said, such as infrastructure or venture

capital. The pensions minister, Emma Reynolds, said: “Last year, over £130bn was saved into workplace pension schemes – money which we want to see working hard for future pensioners to give

them better retirement incomes. Article continues below “Our Pension Bill and Pensions Review will make pensions fit for the future, and having an effective Value for Money framework will

lay the foundations for this.” About 16 million workers save for their retirement through defined contribution pension schemes where the income they ultimately receive depends on a range of

factors, including the performance of the funds they are invested in and the charges.