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Following the consolidation of the UK pension system set out in the Pension Investment Review, the Bill focuses on making pensions easier to manage and understand, and will allow pension schemes to invest in a wider range of assets.

The DWP claims that millions of people across the UK will find it easier to manage their pensions because of the Bill, as well as stimulating UK investment. 

What is the Pension Schemes Bill?

The Pension Schemes Bill is a proposal for new laws to reform how workplace and private pensions operate, aiming to help people plan for their life after work by making pensions simpler to understand and easier to manage, along with driving better value and security in the long term. 

Aiming to improve retirement outcomes for both defined contribution (DC) and defined benefit (DB) members, here's what the Bill includes:

• A focus on schemes that deliver poor returns for savers
• Combining smaller pension pots to create larger, more effective pension funds (and supporting the introduction of Pensions Dashboards)
• Measures to improvement retirement outcomes for DC members and surplus sharing for DB schemes
• Reforms to investment management in the Local Government Pension Scheme (LGPS)

Work and Pensions Secretary Liz Kendall said: "Hardworking people across the UK deserve their pensions to work as hard for them as they have worked to save, and our reforms will deliver a huge boost to future generations of pensioners.

The Bill is about securing better value for savers' pensions and driving long-term investment in British businesses to boost economic growth in our country."

Focusing on schemes that deliver poor returns 

As part of a Value for Money framework, the Bill will require DC schemes to prove they are providing value for money by introducing a new system to show how well pension schemes are performing. This will protect people from being stuck in a scheme that isn't doing well. 

Multi-employer DC schemes (unless exempt) will be required to have at least £25 billion of assets in their main default arrangement by 2030. Or they should be on route to achieving this by 2035 by having £10 billion in their main default.

This means that savers will have a wider range of assets to invest in.

Merging smaller pension pots

Having multiple pension pots all over the place while moving between jobs over time can be hard to keep track of. The new rules will automatically bring pots of less than £1,000 together into one single 'consolidator' scheme. However, you will be able to opt out if you want to. 

There's also the Pensions Dashboards government initiative that will help you to easily access your pensions information in one secure online place.

The date for launching Pensions Dashboards hasn't been confirmed yet, but the Railways Pension Scheme is ready for when they do go Live. It's really important to keep your member details up to date, or they won't match with the dashboards correctly.

Keep an eye on this website and in your member newsletter for Pensions Dashboards updates.

Improving retirement outcomes for DC members and surplus sharing for DB schemes

For those whose retirement is getting close, the Bill includes measures that will require schemes to offer clear default options for turning savings into an income for life after work and overall simpler retirement choices. This will give savers more secure routes, that are easier to understand, to decide how they should use their benefits in the future. 

All pension schemes will need to offer default routes to a retirement income.

For well-funded DB schemes, Trustees will be able to decide to release money back to their members and employers when it is safe to do so - subject to their decisions and regulatory criteria. Unlocking some of these £160 billion surplus funds means that they can be reinvested in the economy. 

Also, the focus on poor returns mentioned in the section above means a wider range of assets can be invested in and members of these schemes will feel more confident when it comes to saving for their life after work.

Reforms to investment management in the LGPS

The Bill includes consolidating and improving the LGPS, with assets that can invest in local area infrastructure, clean energy and housing.

What does this mean for RPS members?

When it comes to planning for your life after work with the Scheme and your pension benefits, currently nothing will change.

The Bill has to go through several stages before it becomes law. The first reading was on Thursday 5 June 2025, and the second reading took place on 7 July 2025. The Bill will now be scrutinised by the Public Bill Committee later in the year before Parliament votes on it again. Once it has become law, the government will still need to make regulations over the coming years to bring many of the Bill's measures into effect. 

Check the news page regularly for any further announcements and also to keep up to date with news about your pension.

You can read the Pension Schemes Bill legislation in full on the UK Parliament website.