New major pensions legislation came into force on 29 April 2026. The Pension Schemes Act 2026 will require DC pension schemes to prove they are delivering value for money, provide DB schemes with greater flexibility to release surplus, and create larger, better-performing funds.
Minister for Pensions Torsten Bell said:
“Today is a landmark moment for the 22 million workers building up a pension pot across the UK.
“For too long, our pensions system has been fragmented and rarely ensures that people’s savings are working hard enough to support them in retirement.
“The Pensions Schemes Act will change that by creating schemes that drive down costs, deliver higher returns, and give savers the security they deserve.
The Act aims to transform the pensions landscape, ensuring every pound saved delivers stronger returns while driving investment in the economy. Key measures include:
- Enabling small pension pots to be automatically consolidated.
- The Value-for-Money (VFM) framework will standardise how value is assessed, leading to transparency and comparability. This, in turn, will drive competition and a long-term focus on value across the DC pensions sector.
- Creating multi-employer defined contribution “megafunds” of at least £25 billion, which will drive down costs and enable investment in a wider range of assets, including in UK businesses and infrastructure.
- Consolidating Local Government Pension Scheme assets into pools managed by FCA-regulated managers, supporting long-term investment in local infrastructure, housing and clean energy across the country.
- Providing Defined Benefit schemes with greater flexibility to release surplus funds, unlocking collectively around £160 billion to support employers and deliver for scheme members.
for more information:
Government press release