The pension industry has welcomed the Pension Schemes Act achieving Royal Assent today, the final step in this landmark legislation becoming law.
This comes after a deadlock between the House of Commons and the House of Lords over the wording of the reserve mandation powers. A revised wording, which included a range of additional safeguards for pension savers was passed by the House of Lords last night.
The Pensions Regulator CEO Nausicaa Delfas described the Act as a “once in a generation opportunity to make the pensions system work for everyone”. She adds: “We will be working closely with government and industry to implement these changes successfully, so people can get the best possible retirement outcomes.”
Many providers also welcomed the fact this Bill would now move onto the statute books. Nest CEO Ian Cornelius says this “marks a significant step forward for the UK pensions system” He adds: “It sends a strong signal that large, well-governed schemes are best placed to drive innovation and deliver for savers.”
Jamie Jenkins, director of policy at Royal London adds: “The passing of the Pension Schemes Bill signals the biggest changes to pensions since automatic enrolment was introduced over a decade ago.
“While the Government has had to compromise in a few areas, the substance of the Bill remains largely unchanged since it was introduced almost a year ago. The UK pensions system will therefore transition to one with fewer, larger pension providers with much greater focus on scale for investment, and value for savers.
“The core changes in the Bill command broad consensus, but the devil will now be in the detail as to how the various elements will work, and how they can work in harmony.
“What lies ahead is a large-scale change programme that requires careful management and sequencing. With pensions tax changes underway in 2027, 2028 and 2029, and a Pensions Commission mulling a longer term strategy, a period of stability in pensions policymaking is now critical if we are to make the Bill a success.”
Smart Pension director of policy Joe Dabrowski adds: “This will shape the industry’s direction of travel for the coming decade and help address many long-standing issues.
“Regardless of the powers reserved in this Bill, we expect and encourage the market to move quickly to meet its Mansion House Accord commitments and believe there are great opportunities in the UK that will deliver for pension scheme members, and the wider economy.”
He adds: “How the interaction between the Government’s assessment of barriers to investment interacts with regulatory supervision, and trustees investment choices, will be key. To help move the market faster, we urge the Government to set out a clear legislative roadmap that gives schemes the confidence to plan and invest for the future. The Value for Money framework will be an important part of this, moving auto enrolment provision away from an excessive focus on costs, and greater recognition of the importance of returns, and high-quality service provision to deliver better retirements.”
Aviva Group CEO Amanda Blanc says: “The passing of the Pension Schemes Bill represents one of the most significant reforms in a generation, setting a clearer long‑term framework to strengthen pensions and help channel long‑term savings into areas that can drive sustainable UK economic growth.
“This will help build a pensions system that is fit for the future and focused on delivering good value over the long term. For people saving for retirement, it means greater confidence that their pension is easier to manage, better governed and working hard throughout their lives.”
Standard Life managing director for Workplace and Retail Intermediary Gail Izat, adds: “Royal Assent of the Pension Schemes Act marks an important milestone for the pensions industry.
“While recent debate has understandably focused on the Government’s proposed mandation powers, the legislation goes far beyond this single issue, introducing a series of meaningful reforms that tackle some of the unintended challenges of auto enrolment and pension freedoms.
“By placing greater emphasis on scale, value for money and clearer guidance at retirement, the Act creates the conditions needed for the industry to deliver better, more sustainable outcomes for pension savers over the long term.”
There was also support from consultants working across the workplace pensions sector.
Hymans Robertson head of DC Alison Leslie says: “We welcome the government’s focus on improving member outcomes through the Pension Schemes Bill, particularly the clarity on the investment‑related measures aimed at potentially unlocking better long‑term outcomes for savers.
“Clarity and consistency now matter more than ever. Crucially, the new ‘best interests’ test creates a clear route for trustees and providers to seek a waiver recognising that asset classes such as private markets need to be assessed over a longer time horizon and always through the lens of fiduciary duty.
“The proposed changes to the asset‑allocation requirement (“mandation”) represent a pragmatic shift. Broadening the range of qualifying investments to include infrastructure, constraining when the power can be used and clarifying timeframes and requiring government to consider competitive and other barriers are all sensible steps.”
Barnett Waddingham chief investment officer Matt Tickle says: “We are pleased to see the Pension Schemes Bill complete its passage through parliament. It contains a wide range of reforms that will benefit pension savers and is good news for members.
“Our position on mandation has been consistent throughout, we do not believe it is necessary or in the best interests of members. However, we recognise that the concessions secured, including the sunset clause, the strengthened savers’ interest test and the requirement for regulatory oversight before any direction is given, provide important protections. Trustee fiduciary duty remains central, and that matters.
“We hope the voluntary approach continues to be the primary driver of investment in UK private markets, with the reserve power remaining exactly that. Ultimately, saver outcomes must always come first.”
Meanwhile Aptia’s UK president Malcolm Reynolds says that it could be a challenging few yers for the industry. ‘We welcome the news that the Pension Schemes Bill has completed its passage through Parliament – particularly given the risk of delay ahead of prorogation. Getting it over the line is an important moment for the pensions industry.
‘But this very much marks the beginning, not the end. For administrators in particular, the Bill brings a wide range of implications to consider – from guided retirement and the small pots agenda, to more technical elements of the surplus reforms, including reporting requirements, tax treatment, and member communications. With most provisions not expected to take effect until 2027, the focus now turns to how this framework will be translated into practice.
‘We look forward to working closely with DWP on the forthcoming consultations on secondary legislation, helping to ensure that the final regulations are clear, workable, and capable of being implemented successfully across the market.”