It seems like much of the pensions world has spent the last 12 months engaging with and discussing the Pension Schemes Bill, which has now received Royal Assent and become the Pension Schemes Act 2026.
Many of the policies enacted by the Labour government started their journeys under the previous Conservative administration. So you might be forgiven for thinking that, now that the bill has become an act with relatively strong cross-party support – with the obvious exception of the mandation clause that led to several rounds of parliamentary ping pong – it might be a quieter time for pensions policy.
However, nothing could be further from the truth.
While the Pension Schemes Act provides a very clear direction of policy in many areas, there is still a lot of detail to be developed. The roadmap that accompanied the bill’s introduction to parliament last year sets out a timeline of development, regulation, and implementation for the next four years and beyond.
The key areas to watch
A perfect example of this is guided retirement solutions. While the act sets out the broad framework and requirements of how workplace schemes will need to provide solutions, the details of exactly what that means and how that will work in practice are yet to be developed. These will be set in regulations from the Pensions Regulator and the Financial Conduct Authority. These are due later this year, and the Pensions Policy Institute (PPI) is already undertaking research to help feed into these consultations.
Another area where further work will be required is in the defined benefit (DB) space, particularly around the use of surpluses. While the act introduces new flexibilities for those DB schemes in surplus, trustees will need help to understand the implications, risks, and rewards of these new flexibilities compared to existing solutions.
With every DB scheme in a unique position in relation to its surplus levels, covenant strength and maturity, there is no ‘one-size-fits-all’ solution.
The act also allows for automatic small pot consolidation, though the details are yet to be decided. There are already several alternative industry solutions being proposed. Work is needed to finalise the Value for Money framework, which aims to increase transparency and comparability across the defined contribution space.
This all sits alongside dramatic consolidation to create a small number of £25bn-plus ‘megafunds’ (with or without mandation). Even here, further work will be needed to ensure that the aims of the policy – bigger retirement pots through better investment returns, reducing costs and investing for longer – are achieved. Forthcoming PPI research in this area, looking at overseas experience, suggests that there are factors other than scale that need to be considered.
Beyond the Pension Schemes Act
There is also plenty of work happening outside of the Pension Schemes Act. We expect the next State Pension Age Review to report later this year, and the Pensions Commission has just published its interim report.
While the act focuses very much on making changes to the pensions system now, both the State Pension Age Review and the Pensions Commission are looking much further into the future. The challenges of adequacy in UK pensions alongside sustainability and fairness within and across generations are likely to lead to some very nuanced discussions and need significant amounts of evidence and analysis.
Another potentially landscape-changing reform is very much on the horizon. Pensions dashboards are now being tested with real data and real people at increasing scale, as we draw closer to the regulatory connection date for schemes within scope of October 2026.
Once connections are complete, all eyes will be on the testing results to see when the first pensions dashboard will be launched. This will be the first step to helping people navigate the complex and ever-changing UK pensions system.
So, even though the Pension Schemes Act 2026 is now on the statute books, in a very real sense, the hard work of developing and then implementing pension reform is still ongoing.
If anything, as we get into the details, it may get even more challenging. It will certainly impact the pensions industry and also, more importantly, the outcomes and retirements of millions of people.
Chris Curry is director at the Pensions Policy Institute and principal at the Pensions Dashboards Programme.
