Glossary · UK
What is Pension Schemes Bill?
UK legislation extending Collective Defined Contribution schemes to multiple employers, requiring consolidation of small pension pots, and pushing large-scale DC pension consolidation into fewer, bigger "megafunds".
Full Definition
The Pension Schemes Bill is a major piece of UK pension reform legislation, introduced to Parliament in 2025, following extensive government consultation on how to improve outcomes for the roughly 20-plus million people saving into defined contribution workplace pensions. Its key measures include: extending the Collective Defined Contribution (CDC) framework, first used by the Royal Mail scheme, to allow multi-employer CDC schemes across the wider workforce; requiring automatic consolidation of small, deferred pension pots (typically under £1,000) that an individual accumulates when moving between jobs, into a single active pot rather than leaving savers with numerous forgotten small pots; setting minimum scale requirements intended to drive consolidation of smaller DC schemes into larger 'megafunds' capable of investing more efficiently, including in illiquid UK assets like infrastructure and private equity; and introducing a framework for guided retirement pathways to help savers with the transition from saving into a pension to drawing an income from it. The Bill's provisions were being phased in through secondary legislation and regulator guidance through 2026 and beyond.