The Pension Schemes Act 2026 in plain English

The Pension Schemes Act 2026 received Royal Assent on 29 April 2026. It's mostly about how workplace pensions are run, but several parts will change what savers see over the next few years, especially as they approach retirement. Many measures affecting savers are planned in stages between 2027 and 2030, with some reforms extending beyond that period.

The timeline for savers

These are the July 2026 government roadmap's indicative implementation dates. Detailed regulations, rules and guidance remain to be completed.

When	What changes
2027 to 2029	Value for Money: rules planned in 2027; larger schemes publish their first assessments in 2028 (based on 2027 data), extending to all in-scope schemes from 2029
March 2028 (planned)	Contractual override: a mechanism for providers to move members from contract-based arrangements without individual consent, subject to safeguards
July to September 2029 and July to September 2030 (planned)	Guided retirement: master trusts and FCA-regulated workplace schemes in 2029; single-employer trusts and schemes with retirement collective defined contribution default pensions in 2030. Regulations are planned in 2028
April to June 2030 (planned)	First automatic transfers of eligible small dormant pots

Value for Money ratings

In-scope workplace defined contribution schemes will have to assess and publish how well they deliver for members, looking at investment performance, costs and service. A July 2026 consultation proposes four ratings: dark green, light green, amber and red. These are proposals, not final rules. The proposed consequences depend on the rating: poor-value arrangements would face restrictions and improvement requirements, while red-rated arrangements would be expected to transfer members where that is in their best interests. If a transfer is not possible, action to improve value would still be required where possible.

What it means for you: clearer information on whether your workplace pension is good value. A poor rating is a prompt to check your options, not a reason to panic.

Guided retirement and default pension income

At the moment, people reaching retirement with a defined contribution workplace pension often have to choose between options with limited help. The Act creates duties for relevant schemes to make default retirement income solutions available, with detailed requirements and commencement still to be set. These solutions are intended to provide a regular income in retirement while preserving members' ability to choose other options.

What it means for you: when you decide to access your pension, your scheme should eventually offer a default income route. Under the government's guiding principles, you must agree to start receiving payments through it; doing nothing does not automatically start retirement payments. You can still choose your own route and use guidance or advice before deciding.

Small pots consolidation

Many people have small pension pots from short jobs. The Act creates the framework for eligible small dormant pots to be moved automatically to an authorised consolidator under a system with multiple consolidators. The Department for Work and Pensions' September 2026 consultation proposes pots worth more than zero and no more than £1,000, with no contributions for at least 12 months. Further eligibility conditions and exclusions apply, so a small balance alone does not mean a pot will move. You'll be told and can opt out or choose another consolidator. Implementation is planned from 2030.

What it means for you: fewer forgotten pots. If you have small pots now, you may already be able to combine them, but compare charges, guarantees and protected pension ages before a transfer; see At Retirement's guide to retiring with several pension pots (At Retirement is also published by Compliant Paraplanning Services Ltd).

The Act creates a contractual override framework for providers of relevant contract-based pensions to make certain changes without each member's consent, such as moving members into a better-value arrangement. The framework includes independent certification and a best-interests test. Its planned start in 2028 depends on implementing regulations and FCA rules; it is not an unrestricted power to move any pension today.

FAQ

When did the Pension Schemes Act 2026 become law? It received Royal Assent on 29 April 2026. Many measures affecting savers are planned between 2027 and 2030, subject to implementation work; some reforms extend beyond that period.

What is a Value for Money rating? A rating of how well an in-scope workplace defined contribution arrangement delivers for members, based on investment performance, costs and service. The proposed timetable starts assessments for larger schemes in 2028 and extends to all in-scope schemes from 2029. Detailed rules are still being developed.

Will small pension pots be combined automatically? Eligible small dormant pots are planned to move to authorised consolidators from 2030. The proposal covers pots worth more than zero and no more than £1,000 with no contributions for at least 12 months, subject to further conditions and exclusions. You'll be told and can opt out or choose another consolidator.

Does the Act change how my pension is taxed? No. Tax changes, such as pensions counting for inheritance tax from April 2027, are in separate legislation.

Sources

General information, not a personal recommendation. Tax treatment and pension rights depend on the rules and individual circumstances.