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The government published a detailed implementation timetable for the biggest overhaul of workplace pensions in a generation. The roadmap sets out when and how the Pension Schemes Act will be brought into force, covering a new Value for Money framework, a consolidation policy designed to create larger schemes, and default retirement income products for savers reaching pension age.
The plan was developed jointly by the Department for Work and Pensions, the Financial Conduct Authority, The Pensions Regulator, and HM Treasury, with input from industry bodies. Ministers say the full package will boost the average saver's retirement pot by £29,000 by the time they retire.
Key Facts at a Glance
- VFM assessments begin: 2028 for larger schemes, 2029 for all workplace pension schemes
- Performance gap: Five year returns range from ~5% to ~13% across large schemes, a difference of more than £5,000 on a £10,000 pot (CAPAdata Q1 2026)
- Megafund threshold: £25bn in assets under management from April 2030, or £10bn with a credible plan to reach £25bn by 2035
- Default income: Savers reaching retirement will automatically be placed into a suitable income arrangement, with the right to opt out
- Projected gain: An average saver is expected to see their retirement pot boosted by £29,000 under the full reforms
The centrepiece of the roadmap is a new comparative framework that will, for the first time, require pension schemes to measure and publish their performance against the best in the market. The performance gap it is designed to address is already well evidenced. Annualised five year returns for younger savers currently range from around 5% to 13% across a sample of large pension schemes. On a £10,000 pot assuming no further contributions and a 0.5% annual charge that spread translates to a difference of more than £5,000 after five years, according to CAPAdata Q1 2026 figures.
Every scheme will be rated across three criteria:
- Investment performance: How returns compare to the best performing schemes in the market
- Costs and charges: What members pay, measured consistently across the market
- Quality of service: Member communications, administration standards, and accessibility
Results will be published using a traffic light rating, red for schemes delivering poor value, through to green for those outperforming. Savers will be able to look up where their scheme sits.
What regulators can do
Schemes that fail to demonstrate value will face escalating regulatory action:
- Compliance notices: Issued to schemes that do not meet the required standard
- Financial penalties: Fines for continued non-compliance
- Wind up: In serious cases, regulators can take steps to close the scheme entirely
- Joint enforcement: Both the FCA and The Pensions Regulator hold powers under the framework
The FCA opened a formal consultation on the VFM framework reference CP26/25 Consultation on 13 July 2026, the same day as the roadmap was published. It closes on 1 September 2026. The consultation builds on an earlier round of proposals (CP26/1) and incorporates stakeholder feedback. Responses should be sent to the DWP VFM Policy Team, which will share them with the FCA and The Pensions Regulator. Subject to the outcome, the FCA intends to introduce final rules and guidance for the framework in 2027, with DWP and TPR bringing forward parallel regulations for trust based schemes.
The roadmap sets a phased schedule. Master Trusts, large single employer schemes, and multi employer contract based schemes open to new employers are first in scope, with VFM assessments required from 2028. All other workplace pension schemes follow from 2029.
Reform Timetable
- 2028: Larger schemes, Master Trusts, and multi employer schemes must publish VFM assessments
- 2029: VFM framework extended to all workplace pension schemes
- April 2030: Auto enrolment schemes in scope must hold at least £25bn in assets under management
- 2035: Deadline for schemes holding at least £10bn to reach the £25bn threshold under a credible growth plan
- Now: Government consultation open on how scale will be assessed under the megafund policy
The scale policy is designed to reduce the number of pension schemes operating in the UK while building those that remain into much larger pools of capital. The government's argument is that larger funds can negotiate lower fees, diversify into a broader range of investments, and generate better long term returns for members. A discussion paper published alongside the roadmap on 13 July invites industry views on how scale will be formally assessed.
- Minimum size: £25bn assets under management from April 2030
- Alternative route: Schemes holding at least £10bn may continue if they have a credible plan to reach £25bn by 2035
- Schemes in scope: Automatic enrolment schemes meeting the size threshold
- Consultation: Industry views on scale assessment methodology are being sought now
- Rationale: Lower fees, higher returns, and more diversified investment cited as expected benefits
A further element of the reforms addresses what happens when savers reach pension age. At present, people must navigate a complex set of decisions about how to convert their accumulated savings into an income. Under the new default income arrangements, schemes will be required to place retiring members into a suitable income product automatically. Individuals retain the right to choose a different option, but they will no longer have to take that decision unaided.
What changes for savers
- Default income: A suitable retirement income arrangement applies automatically on reaching pension age
- Opt out preserved: Savers can choose a different product if they prefer
- No more navigating alone: The current system, which relies on individuals making complex choices without support, will no longer be the default
- Projected boost: The full reforms are expected to raise the average retirement pot by £29,000
What the industry must prepare for
- Product design: Schemes will need to develop or select suitable default income products
- Governance: New obligations will apply around the suitability and review of default arrangements
- Member communications: Clear disclosure of the default and the opt out process will be required
- Detail pending: Specific product standards and regulatory requirements have not yet been published
The broader context
Several policy threads come together in this roadmap:
Policy Context
- Pension Schemes Act: Passed earlier in the parliamentary session, providing the powers to deliver each reform
- Regulator collaboration: The FCA, The Pensions Regulator, HM Treasury, and DWP all contributed to developing the VFM framework
- Market failure: The scheme rests on documented evidence that pension performance is inconsistent and not readily comparable across the market
- Mansion House agenda: The consolidation and investment reform goals align with commitments made under the Mansion House Accord, co-signed by Conservative and Labour Chancellors
- Industry certainty: The timetable is intended to give schemes, administrators, and providers enough lead time to allocate resources and plan delivery
Publishing the delivery timeline marks the shift from legislation to action.
The Pension Schemes Act gave ministers the powers. The roadmap sets out the schedule and for pension schemes, the countdown has started. From 2028, it will no longer be straightforward for a poorly performing scheme to operate without public scrutiny. The comparative data will be visible, and regulators will have a clear basis for intervention.
The consolidation requirements arriving from 2030 will reshape the market structurally. Schemes that cannot reach the £25 billion threshold will face pressure to merge or wind down. Whether that process is orderly and whether savers in smaller schemes are protected throughout will depend on how the regulatory detail is resolved in the coming months.
Key Takeaways
- A delivery roadmap for the Pension Schemes Act was published 13 July 2026, setting out the full implementation schedule
- A new Value for Money framework will require schemes to publish comparative performance data from 2028, using a red to green traffic light rating
- Poor performing schemes face compliance notices, fines, or wind up by either the FCA or The Pensions Regulator
- From April 2030, auto enrolment schemes must hold at least £25bn in assets, or show a credible plan to reach that threshold by 2035
- Default retirement income will be introduced so savers no longer have to navigate complex financial decisions at pension age unaided