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Major UK pension reforms passed

Financial Standard

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May 18, 2026

The UK has passed legislation requiring pension schemes to prove they're delivering value for money or face consolidation and enables automatic merging of multiple pension pots.

The Pension Schemes Bill was passed into law on Wednesday, which will kickstart one of the most major reform packages seen in the UK's pension system.

The primary reform is the introduction of a Value for Money framework which will require trustees to offer clear default retirement income options. The aim is to avoid savers being stuck in underperforming schemes. This will involve a standardised approach to how value is assessed, driving competition in the sector.

Automatic consolidation of multiple small pension pots will also be enabled.

It is expected the changes could see the average worker retire with as much as $55,000 more in savings.

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