Reeves to rip-up pension rules in dash for growth

Legislation to be introduced in the coming weeks will make it easier for businesses to offer workers defined contribution pension schemes instead of defined benefit pensions

If the legislation is passed, it will be a major change to the UK pensions landscape

Chancellor George Osborne is to rip up the rules governing defined benefit pensions in a bid to boost economic growth, the Telegraph can disclose.

Legislation to be introduced in the coming weeks will make it easier for businesses to offer workers defined contribution pension schemes instead.

Defined benefit pensions guarantee retirees a set income for life, regardless of how well the underlying investments perform.

However, they are increasingly expensive to run, and many employers have closed their defined benefit schemes to new members in recent years.

Defined contribution schemes, on the other hand, are less generous. They invest workers’ contributions in a fund, and the size of the pension pot depends on how well the investments perform.

The Government believes that defined contribution schemes are more affordable and sustainable in the long term.

A Treasury spokesman said: "We are committed to ensuring that everyone has a decent income in retirement."

"We are reforming the pensions system to make it fairer, more sustainable and more flexible."