New prime minister Andy Burnham is keeping Pat McFadden as work and pensions secretary, having surprised many by making former defence secretary John Healey chancellor. There has been no announcement about the pensions minister role yet.  

With McFadden remaining in post, Burnham could be minded to also keep Torsten Bell as pensions minister to finish the details and regulations flowing from the Pension Schemes Act 2026 that he led through parliament, encountering resistance from peers over controversial investment mandation powers which he was forced to water down with an exemption based on fiduciary duty.  

The pensions minister will also have the Pensions Commission's final report and the outcome of the state pension age review in their in-tray. 

Some in the pensions industry are calling for stability and consensus, while reacting quickly to the Pensions Commission report when it is shared. 

“The pensions sector is making progress through multiple avenues – surpluses are strong, professionalised governance is promoting higher standards, and auto-enrolment has laid the foundations for further progress in DC," said Louise Davey, head of policy and external affairs at trustee firm Independent Governance Group. “Changes in government can threaten this careful balance. We’ve already seen some political overstepping with the drive for mandation, and we encourage the government to continue working with the sector to drive better outcomes for members, corporates and wider society.”

Others are hoping the new chancellor will end repeated Budget speculation about pensions tax-free cash, look at alternatives to bringing unused pensions into inheritance tax and reconsider the proposed £2,000 cap on salary sacrifice.  Director of public policy at AJ Bell, Tom Selby, also wants to see a roadmap for pensions adequacy, and for the government to clarify the future of the triple lock on state pensions.
 

“The Treasury now needs to work with DWP to set out a roadmap for improving adequacy, including the future of contribution rates, and how changes can be phased in affordably. They also need to finally tackle how to encourage the self-employed to save more for retirement, rather than leaving them on the ‘too-difficult-to-solve' pile,” he said.

McFadden is known for taking a harder line on working age benefits reform than backbench MPs who forced Sir Keir Starmer into a partial U-turn, reportedly complaining that Labour backbenchers' sole line of thinking appears to be, 'Who can we tax in order to pay benefits to others'. 

On pensions, he has rejected compensation for about 3.6m women who the Parliamentary and Health Service Ombudsman said should receive it for the government's maladministration in communicating state pension age changes.  New PM Burnham has reportedly rowed back from a statement he made that appeared to promise support for 1950s-born women, suggesting he meant transport subsidies rather than compensation.

However, campaign group Women Against State Pension Inequality has filed a claim for judicial review, which could potentially force the government to take the compensation decision again. With McFadden as work and pensions secretary, the outcome of this may not be very different from last time.

At level four of the ombudsman's injustice scale, as recommended by PHSO, 1950s-born women would each get £1,250 to £3,700. At this level, "the failure could be expected to have some lasting impact on the person affected". The one-off cost of giving compensation at level four would currently range from about £4.5bn to £13.3bn if compensation is paid based on date of birth.

The DWP has acknowledged maladministration but denies that women did not know about the change in state pension age. This contradicts internal DWP emails from the relevant time which said that “previous attempts to increase awareness of equalisation among the target group have had a limited impact”, according to the PHSO report.