The Pension Schemes Bill was passed by the House of Lords on April 28, 2026. This legislation introduces hard statutory caps limiting mandation at 10% of a default fund. It also allows up to 5% of this mandation to be directed into UK assets.
Julian Mund, chief executive of Pensions UK, stated, “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 is expected to receive Royal Assent on April 29, 2026.
The reserve power will not be usable before 2028 and will expire in 2032 if unused. This means that any changes to the default auto-enrolment fund will take time to implement fully. The House of Lords rejected amendments aimed at further limiting this mandation power.
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 reflects ongoing concerns about fiduciary duty within the pension sector.
Key aspects of the bill include:
- The mandation power applies only to the default auto-enrolment fund.
- Statutory caps are set at 10% for mandation.
- 5% may be invested specifically into UK assets.
Louise Davey from the Independent Governance Group noted that “the core principle of effective trusteeship is the ability to act in the best interests of their members, consistent with their fiduciary duties.” These reforms aim to improve outcomes for pension savers while encouraging investment in the UK economy.
Patrick Heath‑Lay, chief executive of People’s Partnership, remarked, “These reforms are only the beginning, and the needs of savers must be kept firmly at the heart of this evolving process to future proof retirement saving.” The passage of this bill signifies a notable shift in how pension investments will be managed moving forward.