Pensions Scheme Bill gets second reading in Parliament

10 July 2025

The government’s flagship pensions legislation returned to Parliament for its second reading on 7 July 2025. The Pension Schemes Bill aims to boost people’s pension savings through a long list of reforms.

The Bill has been created to enable millions of pension savers to get more from the money they have saved into defined contribution pension schemes. The government says that the reforms have received “wide-spread support from the pensions industry and consumer groups”.

Some of the areas the Bill is looking to address include:

• Small pension pots. Pension pots worth £1,000 or less would be brought into one pension scheme designed to deliver good value to savers and simplify pension saving. This is in response to the issue of people struggling to keep track of multiple small pensions due to moving from job-to-job.

• Value for money. Pension schemes will face new requirements to prove they offer value for money. The aim here is to protect consumers from getting stuck in underperforming schemes.

• Pension scheme efficiency. New rules would lead to the launch of multi-employer schemes with funds of at least £25 billion. These “bigger and better” pension schemes would drive down costs and invest in a wider range of assets in order to achieve better returns for savers.

In addition, the Bill would give defined benefit schemes increased flexibility to release surplus funds to support employers’ investment plans and to benefit scheme members.

Minister for Pensions Torsten Bell said: “We’re ramping up the pace of pension reform, to ensure that people’s pension savings works as hard for them as they worked to save.

“The measures in our Pension Schemes Bill will drive costs down and returns up on workers’ retirement savings – putting more money in people’s pockets to the tune of up to £29,000 for an average earner and delivering on our Plan for Change.”

Zoe Alexander, Director of Policy and Advocacy for the Pensions and Lifetime Savings Association said: “The introduction of the Pension Schemes Bill is a significant milestone, bringing forward necessary legislation to enact important reforms that have the full backing of the pensions industry. Once fully implemented, these measures should reduce the cost of administering pensions, remove complexity for savers and help ensure schemes are maximising the value they provide members.”

Source

Government press release: Workers in line for £29,000 boost thanks to landmark Pensions Bill. Gov.uk. Accessed 7/7/2025