The Pension Schemes Act 2026 received Royal Assent on 29 April, but here’s the thing about big pieces of legislation: they rarely change your life the day they’re signed.
Many of the biggest changes here won’t take practical effect for several years. Still, it’s worth getting to know them now, because they’ll gradually reshape how workplace pensions are managed, assessed, and eventually turned into an income you can actually live on.
Bigger schemes, gradually
From 2030, large multi-employer workplace pension providers running defined contribution (DC) schemes will generally need their main fund to hold at least £25 billion to keep receiving new automatic-enrolment contributions, with transition routes for schemes still building toward that scale.
The idea is that bigger schemes can run more cheaply and invest more broadly, including in private markets. Bigger doesn’t automatically mean better, though, and as with any investment, capital is at risk and values can fall as well as rise.
What happens to old, small pots
Most of us have at least one pension pot we couldn’t tell you much about if you asked. From 2030 under the current timetable, small pots worth £1,000 or less that haven’t received a contribution for at least a year, and where the saver hasn’t actively changed or confirmed how the money’s invested, are expected to be automatically moved into a government-approved provider.
Nothing’s moving yet, and the detail is still being finalised, but it’s as good a nudge as any to find out what you’re actually holding before it happens for you.
A more guided path into retirement
The Act also introduces “Guided Retirement,” under which workplace pension providers will gradually be required to offer a sensible default option for turning savings into income. These duties are expected to begin from 2029 and extend more widely in 2030 under the current roadmap. However, you’ll still be free to choose a different route if one suits you better.
There’s also a reserve power that could, if needed, be used to require pension schemes to invest more in things like UK private markets, should voluntary industry commitments fall short.
Why value matters more than the number on the fund
One of the more genuinely useful reforms here is a new “Value for Money” framework. Rather than judging pensions mainly on whether the charges look cheap, schemes will increasingly be assessed on performance, cost, and service together, with larger schemes expected to be assessed first under current plans.
You don’t need to wait until 2030 to take the lesson from it, though: the cheapest pension isn’t automatically the best one, and an old pension shouldn’t be moved just because another one looks easier to manage.
What this means for you now
Most of this will roll out gradually between now and 2030, with a few transitional arrangements continuing to 2035. That doesn’t mean you need to do anything today, but it’s a good excuse to finally find out what you’ve got.
Before consolidating anything, it’s worth checking the charges, investment strategy, and retirement options on each pension, along with whether an older arrangement carries guarantees or protected benefits you’d lose by moving it. For some people, bringing everything together simplifies life. For others, leaving a particular pension exactly where it is turns out to be the smarter move.
A SIPP can give you more choice and flexibility, but more choice isn’t automatically better; what matters is whether it actually suits your goals, costs, and appetite for risk. The rules are changing because the government wants better value for savers, and that’s reason enough to take a proper look at what you’re holding, whatever the market looks like once the dust settles.
Not sure what you’re holding across old pensions, or whether it still works for you? Let’s find out together. Book a pension review on 020 8366 4400 or enquiries@cedarhfs.co.uk.
This article is for general information only and does not constitute financial advice. Pension and tax rules can change, and outcomes depend on individual circumstances. The value of investments can fall as well as rise.