DB and DC: Phase two of the government's pensions review and review of the state pension age
The government launched phase two of its pensions review and announced the third review of the state pension age on 21 July 2025.
- Why this is important
The government published the final report on phase one of its pensions review, together with two related consultation responses, at the end of May 2025. Those items have informed some of the content of the Pension Schemes Bill.
Phase two of the pensions review will consider the long-term future of the pensions system and how to support pensions adequacy. It could lead to further reform.
A press release confirms that stage two will be conducted by a (revived) Pensions Commission. The terms of reference for the Pensions Commission explain that it will consider:
- "outcomes and risks for future cohorts of pensioners on current trajectories through to 2050 and beyond;
- how to improve retirement outcomes, especially for those on the lowest incomes and at the greatest risk of poverty or undersaving;
- the role of private pension provision and wider savings, building on the foundation of the State Pension, in delivering financial security in retirement and supporting those approaching retirement;
- the long-term challenges of supporting an ageing population;
- proposals for change beyond the current Parliament, that build on the measures in the Pension Schemes Bill and ensure Britain in the mid-21st Century delivers financial security in retirement through a pensions framework that is strong, fair and sustainable."
It is possible that the Pensions Commission will also consider pensions tax.
A related policy paper assesses "the state of Britain’s pensions landscape, including the progress made in the two decades since the first Pensions Commission" and draws together "evidence of the challenges facing current and future pensioners which [the] Pensions Commission will consider and make recommendations to address." The policy paper draws on a number of research and analysis papers, including:
- analysis of future pensions incomes 2025
- analysis of automatic enrolment saving levels
- planning and preparing for later life
- gender pensions gap in private pensions
- pension provider survey 2024-25
The terms of reference for the Pensions Commission also confirm that, in line with section 27 of the Pensions Act 2014, the government has launched the next (and third) review of the state pension age. Dr Suzy Morrissey has been appointed to prepare "an independent report on specified factors relating to state pension age" and the Government Actuary’s Department is to prepare a separate report "including on the proportion of adult life in retirement." The findings from both reports will be considered as part of the Government’s state pension age review and "may also be shared with the Pensions Commission as it considers the longer-term future of the pensions system as a whole."
- Current position and expected timings
The Pensions Commission is expected to deliver an interim report in phase two of the government's pensions review in spring 2026 and its final report in the first half of 2027.
No date has been set for publication of the outcome of the review of the state pension age. A Department for Work and Pensions call for evidence in advance of the report of Dr Suzy Morrissey opened on 18 August 2025 and ran until 24 October 2025.
DB and DC: Consultation on improving standards of trusteeship/governance
As forecast in the workplace pensions roadmap released on 5 June 2025, the government launched a consultation on improving the standards of pension scheme trusteeship, governance and administration on 15 December 2025.
The Pensions Regulator also plans to release a strategy to "drive up standards of trusteeship".
- Why this is important
The government is seeking views on proposals which would affect lay trustees, professional trustees, professional corporate sole trustees and scheme administrators.
The consultation paper notes that new measures being introduced by the Pension Schemes Bill "such as surplus release, megafunds, DB superfunds, guided retirement and VfM", will "introduce new and potentially significant decision points for trustees", who need to "be equipped with the necessary skills to make…decisions that can significantly impact saver outcomes".
Consolidation into DC 'megafunds' and DB superfunds will also lead to a "smaller number of bigger and better pension schemes" which need to be "overseen by highly skilled trustees operating independently, applying good governance, and focussed on delivering the best outcomes for savers without risk of conflicts of interest".
And the aim of the proposals is to ensure that, as the Pension Schemes Bill changes the landscape, "trusteeship, governance and levels of regulatory oversight evolve and change too."
27 questions are being asked. These include the following:
- "Looking ahead to 2030 and beyond, what further support will trustees need to ensure effective scheme governance?"
- "Does effective scheme governance in a [DC] Megafund require additional support or any specific changes in regulatory approach?" (The government would like to understand "the extent to which the relationship between the trustees and those that appoint and can remove them may cause conflict, and the extent to which trustees may not be fully able to act independently or provide sufficient challenge.")
- "Can you describe any potential or actual conflicts of interest that stem from the provision of further services within professional trustee firms and other third-party providers? How are these conflicts managed now? What is the scale of the residual risk in the market?" And "[a]re additional safeguards needed to effectively manage these risks…?"
- "Should there be restrictions on individuals acting as professional trustees, such as the number of trustee appointments they can hold, to ensure individuals have the appropriate capacity to manage schemes?"
- "Are there situations where a [Professional Corporate Sole Trustee (PCST)] model is more or less appropriate and why? Should there be any restrictions or suitability guidelines on PCST appointments?"
- "If the Government introduced an enhanced code of practice for sole trustees what…would you like to see included?"
- "What role can government and regulators play in helping schemes to attract a diverse and talented pool of individuals to trusteeship?"
- "Would it be appropriate to introduce a new public trustee who could be appointed by the Pensions Regulator [(TPR)]? If so, in what circumstances would a public trustee appointment be preferable to a professional trustee from TPR’s independent trustee register? And why?"
- "How can TPR ensure it has the information it needs for [a trustee] directory without creating greater administrative requirements for schemes?"
- "Would it be appropriate for TPR to set statutory higher standards for professional trustees" rather than allowing the industry to continue to self-regulate?
- "What support/continuing professional development…would you like to see put in place for lay trustees? Should all trustees be accredited?"
- "How can we ensure trustee boards take into account the perspectives of members in their decision making?"
- "What benefits and challenges do you foresee if mandatory minimum standards were introduced for scheme administrators and/or wider administration services such as Integrated Service Providers? "
- "Should TPR have the same levels of regulatory oversight as the [Financial Conduct Authority] regarding administrators and/or wider administration services, and why?"
- "What role should TPR take in reducing the risk and impact of a disorderly market exit by an administration provider?"
The consultation paper also confirms that the government will "produce guidance to trust-based private pension schemes, aimed at clarifying how they can interpret and apply their fiduciary duties when considering wider factors, including systemic risks (such as climate risk) and members’ standards of living in investment decisions."
- Current position and expected timings
The consultation is open until 5 March 2026. No timings are given for next steps.
The Pensions Regulator's strategy is expected in 2025/2026.
DB and DC: Information to be given by employers to trustees
In September 2025, the Public Bill Committee approved the addition of a new clause to the Pension Schemes Bill. The new clause gives the government the power to make regulations requiring employers to give information about "jobholders who are active members of a qualifying scheme, or workers who are active members of a pension scheme" to the trustees or managers of an occupational pension scheme, or to the provider of a personal pension scheme.
- Why this is important
In debate, the pensions minister explained that the new clause "is essential to address a current gap in the pension system to ensure that employers share timely and accurate data with pension schemes, beyond the current one-off requirement for employers to provide that information to schemes at the point when the employee is enrolled into the scheme.
"Improving data records will help to improve member communications and will support pension schemes to operate more efficiently and effectively. Poor data contributes to wasted administration costs because it often requires manual interventions to verify identities and match records, which is especially important to facilitate the small pots framework that we have discussed previously.
"Finally, the new clause extends the relevant pre-existing compliance provisions in the Pensions Act 2008 to these new duties, ensuring that the regulator will have suitable enforcement powers. In summary, the new clause supports better governance through improved data quality."
- Current position and projected timings
This clause is expected to come into force on the date of Royal Assent.
(NEW) DB and DC: Investment guidance for trustees and investment managers
At House of Lords report stage in March 2026, the government proposed an amendment to the Bill (amendment 156) to introduce a clause requiring it to issue investment guidance for trustees and investment managers within 14 months of the Bill receiving Royal Assent.
This would be statutory guidance "on the meaning and application of key legal concepts…including the statement of investment principles and the provisions governing the choosing of investments….[to clarify] how the law works in practice." It would provide "clarity and confidence to trustees without imposing undue prescription, translating existing law into practical expectations supported by real-world examples—for instance, showing how trustees might assess long-term financial risks linked to climate change, biodiversity loss, supply chain exposures, nature-related dependencies and stewardship escalation, as well as financially material social risks and other forms, drawing on good practice from schemes such as Nest, Brunel and People’s Partnership."
The amendment was not agreed (see columns 1290 to 1300 in this document) but, at the third reading of the Bill in the House of Lords on 26 March 2026, Baroness Sherlock (Labour), confirmed that "[t]he Government remain committed to improving clarity around trustees’ existing investment duties, including how schemes consider long-term and financially material factors such as climate and systemic risks, while maintaining their core duty to act in members’ best interests. We will press ahead with this important work. We are currently reviewing next step options to ensure this objective continues to be progressed in the most important way in the light of the decision of the House on this matter."
A technical working group has already been convened.
