Pension Schemes Bill 2024-25
The Pension Schemes Bill 2024-25 is a government bill introduced on 5 June 2025. This briefing sets out the background, effect and commentary on the Pension Schemes Bill 2024-25, listed for second reading on Monday 7 July 2025.
The Pension Schemes Bill 2024-25 is a government bill (bill 255 of the 2024–25 parliamentary session). The bill was introduced on 5 June 2025. Second reading is scheduled for 7 July 2025.
The government has published explanatory notes and an impact assessment which are available on the Pension Schemes Bill 2024-25 publications page.
Measures in the billAccording to the government’s impact assessment, the bill as introduced had 12 policies.
Local government pension schemeThe local government pension scheme in England and Wales (LGPS) is the largest funded public service pension scheme.
The bill would consolidate LGPS funds into LGPS megafunds.
Defined benefit schemesDefined benefit (DB) schemes pay guaranteed pensions based on factors, such as salary and length of service. An employer, or another sponsor, guarantees the pension payments. The pension usually pays income for life and may include a lump sum.
The bill would:
- Allow trustees of well-funded DB pension schemes to share surplus funds with sponsoring employers.
- Establish a permanent legislative regime for DB superfunds to replace interim arrangements. Superfunds are commercial consolidators which aim to run DB schemes for profit.
Defined contribution (DC) schemes provide a pot of money for retirement, not a guaranteed pension. The value can rise or fall depending on factors like investment returns and contributions made.
The bill would:
- Require DC scheme trustees to report on the scheme’s value for money.
- Consolidate individuals’ small DC pension pots through multiple default consolidators.
- Set a minimum size for multi-employer DC default pension funds to create DC megafunds.
- Allow contract-based pension providers to override a member’s contract to change a member’s contract or transfer them to a new arrangement. This would include measures to protect savers.
- Place a duty on DC scheme trustees to offer default retirement products to members known as guided retirement.
The Pensions Ombudsman can look at complaints about the administration of personal and occupational pension schemes.
The bill would re-establish the legal standing of the Pensions Ombudsman to enforce determinations in pension overpayment cases without needing a county court order.
Pension Protection Fund and Financial Assistance Scheme
The Pension Protection Fund (PPF) is a statutory fund to protect members of DB schemes if the scheme’s sponsor becomes insolvent. The Financial Assistance Scheme (FAS) provides financial assistance to members of DB schemes who lost all or part of their pension if their scheme came to an end between 1 January 1997 and 5 April 2005.
The bill would:
- extend the definition of terminal illness used for the PPF and FAS from a life expectancy of six months or less to a life expectancy of 12 months or less
- remove restrictions that prevent the PPF from reducing its annual levy
- enable the government-backed pensions dashboard service, provided by the Money and Pensions Service, to display PPF and FAS information
The bill follows a series of government consultations.
Pension Schemes Act 2021The Pension Schemes Act 2021, brought in by the Johnson Conservative government, introduced measures which would be further developed by the Pension Schemes Bill 2024-25.
Consultations started under the Conservative governmentThe Pension Schemes Bill 2024-25 also builds on consultations started by the Conservative government, including:
- Local Government Pension Scheme (England and Wales): Next steps on investments launched in July 2023. The government responded in November 2023.
- Options for defined benefit schemes began with a call for evidence in July 2023. The government responded in November 2023. A consultation launched in February 2024, and the Labour government responded in May 2025.
- Value for Money: A framework on metrics, standards, and disclosures was published in January 2023. The government, the Pensions Regulator, and the Financial Conduct Authority responded in July 2023.
- Addressing the challenge of deferred small pots: a call for evidence was published in July 2023. The government responded in November 2023 (Ending the proliferation of deferred small pots). A delivery group later reported in April 2025.
- Helping savers understand their pension choices: supporting individuals at the point of access was published in June 2022. This was followed by a further consultation in July 2023. The government responded in November 2023.
- Consolidation of defined benefit pension schemes consulted on proposals for pension superfunds in December 2018, following the March 2018 white paper Protecting defined benefit pension schemes. The Pensions Regulator held a “targeted consultation” on Defined benefit superfunds in October 2019 and responded in June 2020, establishing an interim approach until legislation was enacted. The government responded to its 2018 consultation in July 2023.
The Labour government launched a Pensions Investment Review in August 2024, following the general election in July. The government published two other consultations alongside the review in November 2024:
The government published the Pensions Investment Review final report on 27 May 2025.
On 5 June 2025, the government published Workplace pensions: a roadmap to accompany the Pension Schemes Bill 2024-25 and set out the proposed sequencing and timing for implementing the legislative package.
Select committeesThe Commons Work and Pensions Committee took evidence on the bill before its introduction. The evidence session took place on 14 May 2025.
Territorial extentMost of the bill applies to England, Wales and Scotland. Occupational pensions are a reserved matter in Northern Ireland. Some clauses relating to the Local Government Pension Scheme also extend to Scotland but have no application there. These are set out in part 5 of the bill and in the explanatory notes.