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\u2022 Our five-point plan to make you better off<\/a><\/p>\n Will investing in the UK be mandatory?<\/p>\n Last year 17 leading workplace pension firms signed up to the voluntary Mansion House Accord, an agreement to invest at least 10 per cent of their default funds (where savers have not chosen their own investments) into private markets by 2030. Half this money is earmarked for investments in the UK, including infrastructure projects. <\/p>\n Among the signatories were Legal & General, Aviva and Nest, which hold pensions for several million people who could be affected.<\/p>\n Investments would still need to be in the best interests of savers, and under last year\u2019s original agreement pension trustees could refuse any that would not increase the value of their members\u2019 pensions. But the government is trying to give itself the power to make these types of investment compulsory. <\/p>\n This week the House of Lords debated Clause 40 of the Pensions Scheme Bill, which would grant the government \u201cmandation\u201d and allow it to enforce the Mansion House Accord, even though it was signed as a voluntary agreement. <\/p>\n There is no proposed limit on the amount that they could force trustees to invest.<\/p>\n Speaking at a trade conference on Wednesday, the pensions minister, Torsten Bell, said the power would remain in reserve \u2014 which means the government will not use it unless pension firms do not meet their voluntary commitments. <\/p>\n \u2022 Watch and weep as your pension goes up in green smoke<\/a><\/p>\n He said: \u201cThe only purpose of the reserve power in the Bill is to backstop the Accord goals.\u201d <\/p>\n But the shadow work and pensions minister Helen Whately said that mandation was a \u201csweeping government power grab over how people\u2019s pension savings are invested\u201d, and that the government had failed to clarify whether there was a \u201csufficient pipeline of investable projects\u201d. <\/p>\n \u201cWithout that, huge sums chasing too few opportunities will mean lower returns for savers and smaller incomes in retirement. That would be the opposite of the original aim of the Mansion House process. Bad legislation like this carries a real risk of serious unintended consequences,\u201d Whately said.<\/p>\n Almost half (49 per cent) of 2,127 adults in a YouGov survey commissioned by the Association of British Insurers (ABI) thought that the mandation was a bad idea. Some 72 per cent had little or no confidence in the government to make the right decision about how their pension is invested. Of those aged 45 and older, 46 per cent thought that requiring pension funds to invest in certain assets would reduce the amount of money they will have in retirement.<\/p>\n Yvonne Braun, a director the ABI, said the findings revealed \u201ca deep unease\u201d about the plans.<\/p>\n Who will be affected? <\/p>\n About 22 million people paid into a workplace pension last year according to the Department for Work and Pensions \u2014 82 per cent of all employees. <\/p>\n The changes will not affect everyone but their impact will overwhelmingly be felt by those whose money goes into a scheme\u2019s default fund. These are likely to be lower and middle-income earners who may not be engaged enough with their pensions to have chosen other options. <\/p>\n Precise figures are difficult to gauge because many people have more than one pension, but the number of those affected will be in the millions, said the former pensions minister Sir Steve Webb.<\/p>\n Defined benefit pensions \u2014 which guarantee employees a fixed pension after retirement based on salary and years of service \u2014 will not be affected because they generally do not have a pot of assets to invest. Instead, pensions are paid by contributions from existing employees. <\/p>\n These gold-plated schemes, given to civil servants, teachers, and doctors among others, cost the taxpayer \u00a357 billion last year.<\/p>\n