Pension Schemes Bill 2024-25 introduced in Parliament

The Pension Schemes Bill 2024-25, a government bill numbered 255 of the 2024-25 parliamentary session, was introduced on 5 June 2025¹. Second reading is scheduled for 7 July 2025¹. The government has published explanatory notes and an impact assessment on the bill's publications page¹. According to the government's impact assessment, the bill as introduced had 12 policies¹.

Most of the bill applies to England, Wales and Scotland; occupational pensions are a reserved matter in Northern Ireland¹. Some clauses relating to the Local Government Pension Scheme also extend to Scotland but have no application there, set out in part 5 of the bill and in the explanatory notes¹.

The measures span several areas of pension reform¹:

Area	Measures in the bill
Local government pension scheme	Consolidate LGPS funds into LGPS megafunds
Defined benefit schemes	Allow trustees of well-funded DB schemes to share surplus funds with sponsoring employers; establish a permanent legislative regime for DB superfunds to replace interim arrangements
Defined contribution schemes	Require DC scheme trustees to report on value for money; consolidate small DC pots through multiple default consolidators; set a minimum size for multi-employer DC default funds to create DC megafunds; allow contract-based providers to override a member's contract to change it or transfer them to a new arrangement, with measures to protect savers; place a duty on DC trustees to offer default retirement products, known as guided retirement
The Pensions Ombudsman	Re-establish the legal standing of the Pensions Ombudsman to enforce determinations in pension overpayment cases without needing a county court order
Pension Protection Fund and Financial Assistance Scheme	Extend the terminal illness definition for the PPF and FAS from a life expectancy of six months or less to 12 months or less; remove restrictions preventing the PPF from reducing its annual levy; enable the government-backed pensions dashboard service, provided by the Money and Pensions Service, to display PPF and FAS information

The local government pension scheme in England and Wales (LGPS) is the largest funded public service pension scheme¹. The Pension Protection Fund is a statutory fund protecting members of DB schemes if the scheme's sponsor becomes insolvent, and the Financial Assistance Scheme provides financial assistance to members of DB schemes who lost all or part of their pension if their scheme came to an end between 1 January 1997 and 5 April 2005¹. The Pensions Ombudsman can look at complaints about the administration of personal and occupational pension schemes¹.

The bill follows a series of government consultations¹. The Labour government launched a Pensions Investment Review in August 2024, following the general election in July, and published the review's final report on 27 May 2025¹. On 5 June 2025 the government published "Workplace pensions: a roadmap" to accompany the bill and set out the proposed sequencing and timing for implementing the legislative package¹. The bill also builds on consultations started under the Conservative government, including on LGPS investments launched in July 2023, options for defined benefit schemes, value for money metrics and disclosures published in January 2023, deferred small pots published in July 2023, helping savers understand their pension choices published in June 2022, and consolidation of defined benefit pension schemes consulted on in December 2018¹. The Pension Schemes Act 2021, brought in by the Johnson Conservative government, introduced measures that would be further developed by this bill¹.

The Commons Work and Pensions Committee took evidence on the bill before its introduction, in a session on 14 May 2025¹.

Why it matters for households

The bill's measures would affect people saving into workplace pensions, members of defined benefit schemes, and members of the Local Government Pension Scheme in England and Wales. For DC savers, the proposals cover small pots, value for money reporting and default retirement products; for DB members, they cover surplus sharing and superfunds. The changes to the Pensions Ombudsman concern overpayment cases, and the PPF and FAS measures concern the terminal illness definition and levy. The bill has been introduced but not passed; the measures are proposals, and the roadmap published on 5 June 2025 sets out proposed sequencing and timing for implementation¹. The impact assessment published with the bill sets out the government's assessment of its 12 policies¹.

What happens next

Second reading is scheduled for 7 July 2025¹. The government published "Workplace pensions: a roadmap" on 5 June 2025 to set out the proposed sequencing and timing for implementing the legislative package¹.

Sources1 cited