The Pensions Scheme Bill, introduced on 5 June 2025, is a piece of UK legislation aimed at reshaping and modernising the UK’s private pension system and is now currently in report stage in the House of Lords.
Its goal is to streamline the market, strengthen investment performance and ultimately deliver better long‑term outcomes for millions of savers.
For most clients, its direct impact will be minimal, though it may shape how big workplace schemes operate over time.
Details of the Bill
Most people enrolled in a Defined Contribution (DC) workplace pension rarely make active decisions about how their money is invested. As a result, both the Government and the pensions industry share responsibility for ensuring these savers achieve strong long‑term outcomes.
‘The Pension Schemes Bill seeks to implement a wide set of reforms which are designed to improve value for money, increase transparency, and support a more consolidated and efficient market that delivers better long-term outcomes for members.’ – GOV.UK
It’s the UK Government’s latest step toward modernising the retirement system. Its main aim is to streamline a pension landscape seen as too fragmented, encouraging larger, more efficient schemes – especially within the Defined Contribution market. While the Bill focuses on governance, structure and consolidation, it does not direct how pensions must be invested, despite recent public debate.
Implications for clients
For clients who are concerned with the Bill, we can confirm that the direct impact of the Pension Schemes Bill is likely to be limited.
The legislation primarily affects:
- workplace pension scheme structure
- governance of large pension schemes
- regulatory oversight of pension providers
For clients of our financial planners, nothing changes. Your retirement portfolios and personal pension arrangements will continue to be managed under the existing financial advice rules. That means your planner will still base all recommendations on what’s suitable for you, your goals, your attitude to risk and your broader financial plan. The new legislation doesn’t alter how advised pensions are regulated or how investment decisions are made for individual clients.
The scope of pensions arrangements included
The Bill is mainly focused on workplace pension schemes, especially the Defined Contribution (DC) plans used for automatic enrolment. It also includes some updates to the Defined Benefit (DB) system.
1. Defined Contribution workplace schemes
Most of the changes centre on DC workplace pensions such as:
- master trusts
- multi‑employer DC schemes
- large employer DC schemes
These are the types of pensions most employers use for auto‑enrolment, so this is where the Bill’s new Value for Money (VFM) rules and scale requirements are aimed.
2. Certain contract‑based workplace schemes
Some contract‑based schemes, like Group Personal Pensions (GPPs) used for auto‑enrolment may also be affected. This is largely about keeping regulation consistent between the FCA and The Pensions Regulator, given that similar workplace pensions sit under different regulatory umbrellas.
3. Defined Benefit pension schemes
The bill also touches on the DB world, including:
- creating a formal regime for DB consolidation vehicles (“superfunds”)
- setting rules for how well‑funded schemes can access surplus assets
These changes mainly apply to trustees and sponsoring employers.
Pensions arrangements not included
Some recent commentary has hinted that the Pension Schemes Bill would give the Government powers to steer pension money into particular projects. However, that reading doesn’t really match what the legislation is designed to do.
The Bill doesn’t change how most retail and advised pension products are regulated. That means:
- SIPPs
- personal pensions on retail platforms
- advised drawdown arrangements
- discretionary portfolio management services
All of these will continue to follow existing FCA suitability rules, ensuring advice remains aligned with clients’ goals, risk levels and broader financial planning needs.
Summary
Given the scale of these reforms and how they could shape the pension landscape in the years ahead, it’s important we keep a close eye on how the Bill develops as it moves through Parliament. The proposals are still being debated and refined, so changes are possible before anything becomes law.
For now, it’s worth remembering that this Bill is about reshaping the structure of workplace pensions – not altering how individual retirement portfolios are managed. In other words, while the wider system may evolve, clients’ own investment advice and personal pension strategies remain firmly rooted in the existing, personalised advice framework.
If you have any further questions about this Bill, please don’t hesitate to contact our team, we’re happy to help.
Important Note
The information contained within this document is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
This article is distributed for educational purposes only. This communication does not constitute financial advice. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner to take into account your particular investment objectives, financial situation and individual needs.
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