The Pension Schemes Bill passed through the House of Lords on April 28, 2026, marking a pivotal moment in the UK’s approach to pension investment mandates. This legislation aims to enhance the outcomes for pension savers while encouraging more investment in the UK economy.
Julian Mund, chief executive of Pensions UK, expressed optimism about the changes: “The legislation enacts a series of critical reforms that will improve the value savers get from pensions and make the system easier to navigate for employers and savers.” The bill introduces hard statutory caps, limiting mandation at 10% of a default fund, with 5% potentially directed into UK assets.
However, not everyone shares this enthusiasm. Helen Whately, shadow work and pensions minister, voiced concerns that “trustees should not need state approval to act in the best interests of their members.” This sentiment reflects ongoing apprehensions among industry stakeholders regarding how these new regulations might affect their fiduciary duties.
The core principle of effective trusteeship—acting in the best interests of members—remains central to these discussions. Louise Davey, head of policy and external affairs at the Independent Governance Group, stated, “The core principle of effective trusteeship is the ability to act in the best interests of their members, consistent with their fiduciary duties.” This highlights a tension between regulatory oversight and trustee autonomy.
As part of these reforms, the reserve power to mandate investments will not be usable before 2028 and will expire in 2032 if unused. This timeline has raised questions among experts about whether it provides enough flexibility for future adjustments based on market conditions.
Patrick Heath‑Lay, chief executive of People’s Partnership, emphasized that “these reforms are only the beginning,” urging that the needs of savers must remain at the heart of this evolving process to future-proof retirement savings.
The House of Lords recently rejected amendments aimed at further limiting this mandation power. As such, stakeholders will continue to monitor how these changes unfold and impact both pension investments and savers across the UK.
The bill is expected to receive Royal Assent on April 29, 2026, paving the way for a new chapter in pension regulations that may redefine how pensions are managed and invested in the coming years.
