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If passed, the UK’s new Pension Schemes Bill will mark a major shift in workplace pensions. But the UK isn’t alone - other countries have recently introduced or are preparing significant reforms of their own. Discover what is set to change in the UK and in 18 other jurisdictions below.
There is a new Pension Schemes Bill in the UK. According to the Government, the changes will secure ‘better value for savers’ pensions’ and drive ‘long-term investment in British businesses to boost economic growth’. The Bill’s provisions are likely to take several years to implement, with some changes not expected to be in force until 2030.
Interestingly, the UK is not alone when it comes to pension reforms, with several other countries having recently introduced changes effective from the start of 2026 or that are slated to come into effect soon.
Below, we have set out some of the proposals in the UK’s Pension Schemes Bill that we anticipate will have the most significant impact. Then, in the sidebar, we have highlighted key pension developments in [x] other countries.
Extracting surplus from schemes
Only a few years ago, the pensions industry in the UK was focused on underfunded defined benefit (‘DB’) schemes. More recently, a change in the economic climate has meant that many DB schemes now have surplus assets. But many DB schemes contain rules which could restrict the use of surplus, including payment to sponsoring employers.
The Bill will give DB trustees unilateral power to amend their scheme rules either to remove restrictions on an existing surplus provision or to add a specific power to pay surplus to sponsoring employers. There will be guidance for trustees who are considering exercising this power from the Pensions Regulator.
New requirements for automatic enrolment schemes
‘Scale’ requirements
There are new requirements relating to ‘scale’ proposed for defined contribution (‘DC’) master trusts and group personal pension schemes which are used to meet employer obligations to automatically enrol certain workers into pensions saving. If schemes do not meet the requirements by 2030, they can no longer be used for automatic enrolment (subject to limited exceptions).
Schemes will need to have at least GBP 25bn in assets under management in at least one large main scale default arrangement by 2030. There are some exceptions to this requirement, for example, to allow new entrants into the market, as well as transitional provisions for certain schemes.
Investment ‘mandation’ power
As part of its policy aim of driving greater investment in UK businesses, the Bill will also provide the Government with the power to set quantitative baseline asset allocation targets. As currently drafted, this so-called ‘mandation’ power will likewise apply to DC master trusts and group personal pension schemes used for automatic enrolment purposes. However, the Government is not intending to use this new power unless voluntary investment commitments made by schemes are not met.
Value for money
A new standard framework to assess the ‘value for money’ of certain pension arrangements will apply to most DC schemes in the UK, including those used for automatic enrolment. This is intended to encourage a broad view of value (across investment, costs and services), with the aim of bolstering outcomes for pension savers through improvement in performance where possible, or the removal of poorly-performing pension arrangements from the market where it is not. The first assessments are expected in 2028.
Consolidating small DC pots
In the future, DC pots which are considered ‘small’ and ‘dormant’ will be automatically consolidated into other schemes unless members opt out. Pension pots with a value of GBP 1,000 or less (but not nil) will be in scope. To be ‘dormant’, no contributions must have been paid in the last 12 months and the member must not have taken certain steps in relation to investments. The covered DC pots will be automatically consolidated into an approved consolidator scheme through a centralised platform, potentially from 2030.
Takeaway for employers
The Bill’s proposals will significantly alter how pensions in the UK operate over the course of the next five years or so. For employers with DB arrangements, they may want to start considering how the new surplus flexibilities could influence any endgame planning. Most employers will also have some type of DC arrangement. Depending upon the scheme used, the reforms will impact in different ways.
Given the staged implementation of the Bill’s changes, there is generally no need for any immediate action by UK employers, but it will be important for all employers to stay up-to-date with the changes and any new obligations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
