“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,” said Julian Mund, chief executive of Pensions UK. His words echoed through the House of Lords on April 28, 2026, as the Pension Schemes Bill was passed, marking a pivotal moment in the UK’s approach to pension investment mandates.
The bill introduces hard statutory caps limiting mandation at 10% of a default fund, with 5% potentially directed into UK assets. While these measures aim to enhance outcomes for pension savers and stimulate investment in the UK economy, they are not without controversy. Industry stakeholders have voiced concerns about the implications for fiduciary duty and the autonomy of trustees.
The backdrop is critical. The Pension Schemes Bill has undergone multiple revisions, reflecting intense discussions between the House of Lords and Commons. The reserve power embedded within the bill won’t be usable until 2028, and it will expire in 2032 if not employed. This timeline raises questions about its practical application and effectiveness.
Key facts:
- The mandation power applies only to the default auto-enrolment fund.
- The House of Lords rejected amendments to further limit this power.
- The bill is expected to receive Royal Assent on April 29, 2026.
Concerns arise from various corners. Helen Whately, shadow work and pensions minister, emphasized that “trustees should not need state approval to act in the best interests of their members.” This sentiment resonates with many who fear that excessive regulation could hinder effective trusteeship.
Louise Davey, head of policy and external affairs at Independent Governance Group, pointed out that “the core principle of effective trusteeship is the ability to act in the best interests of their members, consistent with their fiduciary duties.” This fundamental principle could be at risk if stakeholders feel constrained by new mandates.
Patrick Heath‑Lay, chief executive of People’s Partnership, noted that “these reforms are only the beginning”—a reminder that while this legislation is significant, it’s just one step in an ongoing evolution aimed at future-proofing retirement savings.
The next ruling is expected on April 29 as the bill awaits Royal Assent. With these changes set to reshape pension investments in the UK, industry players are bracing for a landscape that may look very different in just a few years.
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