50 | PENSIONS
The new pensions revolution
Kirsty Ross, Proposition Director, People’s Pension, examines the revolutionary regulatory reforms in the imminent Pension Schemes Bill 2025, and what they mean for workplace pensions, savers and the wider UK economy
A t the time of writing, the Pension Schemes Bill 2025 is midway through Parliament and is likely to be law by the middle of 2026. It’s one of the most significant pieces of pensions legislation since the Pensions Act 2008, which brought in automatic enrolment (AE). With the Bill, the Government has two clear objectives. First, to reform the market and improve the quality of workplace pension provision. Second, to connect UK pension schemes more closely to the UK economy. The backstory – pension reform without pension market reform The 2002 - 2006 Pensions Commission focussed on getting more people saving
into workplace pensions. It also centred on reducing future dependence on means-tested benefits in retirement by recommending a higher flat-rate state pension. The Commission’s main recommendations were implemented within a decade. When AE launched in 2012, it transformed pension saving in the UK. Millions more people started saving for retirement. Transformative as they were, these reforms didn’t change the way defined contribution (DC) workplace pension schemes operated. A year later, in 2013, the Office of Fair Trading raised serious concerns about the quality and value of pension schemes on offer. Since then, successive Governments have tried
to address these issues, culminating in the measures in the 2025 Bill. What’s in the 2025 Bill? The Bill has a bold ambition to raise standards in workplace DC pensions by reshaping the market. Key measures include: l consolidation of small DC pension pots l a new framework to measure value for money (VFM) l default retirement products. The central focus of the Bill, though, is a package of measures intended to create a market of fewer, larger workplace pension providers offering a narrower range of default investment funds. International evidence shows
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