Overview

• The Pension Schemes Bill compels automatic consolidation of pension pots worth £1,000 or less into larger schemes to reduce fees and administrative complexity.
• It sets a threshold for multi-employer defined contribution “megafunds” of at least £25 billion to leverage economies of scale and broaden asset investment.
• New performance assessments will rate pension schemes on value for money, helping savers identify underperforming funds.
• Defined benefit schemes will gain flexibility to release up to £160 billion in surplus assets for employer investment and member benefits.
• The government forecasts the reforms will boost average worker retirement savings by around £1,000, though critics warn the bill does not address low contribution rates.