Commentary
Budget 2026
28 October 2026
Spokesperson
Commenting on the changes impacting pensions in today’s budget, Calum Cooper, Head of Pension Policy Innovation, Hymans Robertson says:
“A relatively quiet Budget for pensions should not be mistaken for a lack of pensions policy, particularly following on from the changes to triple lock announced last month at the Labour party conference. The challenge now for the government is joining up the reforms already under way into a coherent plan for retirement and look after pensioners of today, and the future. We now need to think about the State Pension, workplace saving and retirement income together, will acknowledging the challenges around the gender pensions gap and what the industry can do to close this gap.
“Our modelling shows how the Government plans to retain an earnings-linked State Pension foundation while improving long-term sustainability for taxpayers and benefiting the economy – no mean feat. By increasing the tax on cash savings and on property, the budget announced today makes saving in to pensions even more attractive. As a consequence, this budget puts long term investment at its core, for both employed and self employed workers, aligned withe the principle of a system which works hard to greater confidence about what they can expect in later life.”
Commenting on today’s budget announcements, Chris Arcari, Head of Capital Markets, Hymans Robertson says:
“Today’s Budget reflected the Chancellor’s limited room for manoeuvre. Higher gilt yields and a weaker economic backdrop since the spring had eroded the headroom provided by the fiscal rules, leaving difficult choices between tax, spending and borrowing.
“Importantly for markets, the government maintained its commitment to the existing fiscal framework. Some use of fiscal headroom can be justified, particularly where the government is responding to temporary economic pressures. However, the longer-term challenge remains. Large unfunded spending commitments or a sustained increase in borrowing would risk putting further upward pressure on gilt yields.
“Gilt yields remain high relative to the UK’s longer-term nominal growth potential. Today’s measures do not fundamentally change that picture. The government continues to face persistent spending pressures, while its manifesto commitments on the major taxes constrain the options available to raise revenue.
“The Budget announcements have therefore addressed some immediate pressures without resolving the UK’s more structural fiscal challenges. Individual tax and pensions measures can improve the public finances at the margins, but delivering a material and sustained reduction in borrowing and gilt yields is likely to require broader choices on tax and spending.”
Commenting on the announcements made in today’s budget, Hannah English, Head of DC Corporate Consulting Services, Hymans Robertson says:
Minimum wage
“Today’s announcement regarding minimum wage increase of 3.9% will not be a surprise to employers. The fact that the rate for 18- to 21-year-olds didn’t increase by more will be welcome. Nevertheless, at a time when employer costs have already been hit by previous changes this will place increasing pressure on employer to consider how they structure their reward packages to attract and retain staff while managing affordability.
“Pensions will form part of this, and employers will need to consider financial resilience and retirement adequacy for future generations. Employers can no longer afford to view inadequate retirement outcomes as something that sits outside their wider people strategy. To make informed decisions, they need a clear understanding of how retirement adequacy risks are affecting their own workforce. The changes announced today will further reiterates the need for businesses to take the lead and ensure reward packages are effective for pension savings today and tomorrow.”
State pension and personal allowance
“The new Pension Tax Allowance for pensioners announced today will help pensioners solely relying on the state pension. Current state pension provides around 90% of the Pensions UK minimum retirement standards needed for the bare minimum of what is deemed a good retirement, with financial independence and dignity at its core. The rising of the personal allowance to avoid pensioners paying income tax on state pension received as this grows will help protect the financial security of pensioners relying on this as a key source of income and avoid burdensome administration for those affected.”
Pensions in the Budget:
“Today’s budget will be a welcome relief for many, with relatively few updates for the pensions industry. It is now clear that the Labour Conference last month was the launchpad for the governments thinking around pensions with the changes to triple lock unveiled, and plans clarified by the government. This vision will drive plans for a more stable and sustainable triple lock which will benefit pensioners and balance the needs of taxpayers and the economy. As our modeller showcased the adjusted triple lock will maintain the current earnings link which underpins the notion of adequacy but will also reduce long-term pressure on the government and taxpayers. The pension announcement we did see, of measures to help members of DC and R CDC arrangements avoid penal tax charges when transferring in and out of arrangements, are extremely welcome. As increasing numbers of people come to retirement relying on DC-only pensions we have to make the system work for them.
“Although the level of future state pension will depend heavily on the levels of inflation and average earnings growth, our analysis suggests that by 2050 the state pension could be just under £33,000 a year whereas if the current triple lock remains in place, the pension could be more than £35,000. This will mean that the redesign of the State Pension could reduce the cost to the government by as much as 4.6% by 2050, a significant saving on spending, but at the same time will increase the importance of private pension saving.”
Commenting on the budget announcements around gender pay gaps, Kathryn Fleming, Head of DC Consulting, Hymans Robertson says:
“The gender pay gap is a large contributor to the gender pensions gap, so naturally the announcement today from the government is a positive step forward. We know that higher pay most likely means higher pension savings. Employers are well placed to support on all pension gaps, and with the focus on pay gap reporting there is an opportunity to use this data to build an understanding of pension savings gaps for employees of today and tomorrow. All small changes that can help to reduce the gap are welcome, but it will take relentless effort to have a meaningful impact, and a full societal change of both pay and gender. We look forward to learning more about how these announcements will be translated into reality.”
Important information
This communication is based upon our understanding of events as at the date of publication. It is a general summary of topical matters and should not be regarded as financial advice. It should not be considered a substitute for professional advice on specific circumstances and objectives. Where this page refers to legal matters please note that Hymans Robertson LLP is not qualified to provide legal opinion and therefore you may wish to obtain independent legal advice to consider any relevant law and/or regulation. Please read our Terms of Use - Hymans Robertson.