The Chancellor has claimed Labour will bring in new laws to boost pension pots by more than £11,000.
Rachel Reeves said the Government will ensure pension schemes are well managed and deliver better value for money.
The Treasury told i the figure is an “illustration of the potential impact of the Value for Money Framework” included in the Pensions Bill, adding it will boost the pension pot of an average earner who saves over their lifetime in a defined contribution scheme by over £11,000.
The workings are based on a published analysis of what the framework could do, including a policy paper from the Department of Work and Pensions (DWP) which makes several assumptions, including that pension schemes that are performing at 3 percentage points or worse, below the industry average, either consolidate or improve their performance to match the industry average.
It calculated that this would make the average investment growth across the industry increase by around 0.3 percentage points.
The calculation is also based on the assumption that the lower earnings limit – which says no one earning £6,240 or under will be automatically enrolled into a workplace pension scheme – is abolished, meaning everyone will start paying into their pension pot no matter how much they take home, as well as changing the age at which people start paying from 22 to 18.
However, some experts have criticised how the Government have arrived at the £11,000 figure.
Tom Selby, director of public policy at investment platform AJ Bell, said: “There is a pretty big pinch of salt required with those numbers. They seem to be based largely on assumptions of improved investment returns as a result of greater allocation to private equity, which are not guaranteed.
“It’s good there’s a focus on value for money but trying to turn that focus into a number in retirement is pure guesswork given the level of uncertainty that exists, particularly over decades.”
Others have said increasing auto-enrolment contributions will be a positive move.
Jason Hollands, managing director of corporate affairs at Evelyn Partners, said: “An area that might be under consideration is raising the minimum contribution level under autoenrollment which is currently 8 per cent.
“Were that to increase it would certainly boost the value of pensions, but it could all hit companies if the burden primarily fell on employers.”
An increase to minimum contributions was not mentioned in the King’s Speech last week. Experts have called on the Government to make the change sooner rather than later.
David Lane, chief executive of TPT Retirement Solutions, said: “We would urge the Government to implement much-needed pension reforms that don’t require new primary legislation.
“The most important of these is reducing the age for automatic enrolment to 18 and abolishing the lower earnings limit for contributions. These changes could significantly increase the retirement savings of thousands of workers.”
Alternatively, to boost pension pots, there could be an extension of Jeremy Hunt’s Mansion House reforms, in which there was a voluntary commitment by some of the largest UK workplace schemes to allocate at least 5 per cent into UK growth companies by 2030.
Hollands added: “Labour have committed to review the pension scheme system with one aspect of this being to get pensions to support UK assets.
“Hunt claimed at the time his Mansion House Compact would boost the value of the average defined contribution pension by 12 per cent. Labour may be considering going further than a voluntary agreement.”