Torsten Bell defended the Value for Money framework in Liverpool on 2026-10-16, even as concerns persisted that it could push DC pension funds toward similar investment strategies. He argued that narrowing the spread of returns would improve outcomes for savers, while accepting that the reforms could still create trade-offs.
“It is a good thing to see a narrowing of the current dispersion in returns,” Bell said at the Pensions UK annual conference. “If I’m blunt about it, you do want to chop off the bottom of the dispersion. It’s not a good thing to have a very wide distribution of outcomes. That’s what marks the current UK system out.”
Value for Money in Liverpool
Bell framed the framework as a test of whether the system can do better than it does now. He said: “The exam question is: ‘Can we get to a better place than today?’ No, there are never any downsides to anything ever,” and added, “What matters is what we are overall trying to do with the system. So what are we trying to do that Value for Money can help with and where are there some trade-offs?”
That leaves the policy in a narrow lane. Bell is backing greater transparency around investment returns, but he also made clear that transparency alone is not the point if it simply pushes every pension fund toward the same answer.
Australia and the herding risk
He said the herding question turns on “lessons from Australia” and on how people respond to incentives. Bell added that he had discussed the issue in detail with regulators as they developed their plans, a sign that the framework is being shaped with those concerns in mind rather than after the fact.
He did not dismiss convergence altogether. “You do want a bit of pelotoning,” he said when asked about the cycling comparison, adding: “What happens overall if there’s a peloton? The average is faster. That is what you’re aiming to achieve.”
But he drew a line at sameness. “We don’t want everyone doing exactly the same thing because people have different members, but also because people should have different views about what’s the right way to deliver the highest returns,” Bell said. He also said: “We don’t want people over-indexing on individual years of returns. We should be looking at averages over decent periods of time.”
Torsten Bell backs pension age rise fits the same logic: the minister is signalling that system design should reward long-term outcomes, not short-term snapshots. For DC funds, the immediate issue is not a final ruling but the standard they will be measured against as the framework develops.
