Pension Schemes Bill: HL Bill 152 of 2024–26
The Pension Schemes Bill would implement government commitments to reform private pensions. The government intends these reforms to improve outcomes for savers and encourage pension schemes to invest in the UK economy.
Approximate read time: 45 minutes
The Pension Schemes Bill aims to increase benefits for members of defined contribution pension schemes by providing them with more information about their pensions and retirement options, consolidating pension pots and securing better returns. The bill includes measures to protect and benefit members of defined benefit schemes by allowing consolidation into superfunds and allowing schemes to pay surpluses back to employers.
The government also intends the bill to benefit the UK economy through reforms to the local government pension scheme (LGPS) and requiring master trusts to achieve a minimum scale. The bill includes a reserve power to require pension schemes to invest in productive asset classes intended to benefit the UK economy. It also includes measures relating to the Pension Protection Fund (PPF), among other things.
The Conservative Party supports many of the measures in the bill. However, it disagrees with the power to mandate investment in productive asset classes, arguing this could interfere with pension scheme trustees’ duty to act in the best interests of their members. The government has stated it does not intend to use the power and there is an exemption if meeting the requirement would cause financial detriment. However, opposition members have highlighted that future governments could use the power.
At report stage an amendment requiring the PPF and Financial Assistance Scheme (FAS) to provide inflation-linked increases on contributions made before 1997 was added. This would apply to members whose scheme rules provided for such increases before they were taken over by the PPF or FAS. This issue has been the focus of campaigns by affected pensioners. The measure has been welcomed, but some have argued for similar measures to be introduced for non-PPF/FAS schemes.
The bill passed its House of Commons stages without any non-government amendments being made. It is due to have its second reading in the House of Lords on 18 December 2025.
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