The Pension Schemes Bill passed its report stage and third reading in the House of Commons this week and will now move to the House of Lords for consideration of the amendments made by the Commons.

If the Lords agree to the amendments and the wording of the Bill, it can receive Royal Assent and become law.

However, if the House of Lords disagrees with any Commons amendments, or makes alternative proposals, it will be sent back to the Commons and could potentially ‘ping-pong’ between the Houses until an agreement is reached.

The government had previously expressed hope that the Bill would receive Royal Assent in early 2026, after which it would begin consulting on regulations to be made under its new powers.

However, work on supporting legislation is already underway, with the government currently consulting on two draft statutory instruments designed to deliver several key Local Government Pension Scheme (LGPS) changes included in the Bill.

The date for the Bill’s first reading in the House of Lords has not yet been confirmed.

Commenting during the third reading, Pensions Minister, Torsten Bell, stated: "Pensions matter. They are the means by which we deliver on some of the biggest promises we have made to the public: that the prospect of a comfortable retirement, with the option of leisure in later life, is there for the many, not just the few.

"We need not only to encourage people to save, but to ensure that those savings work as hard as possible for them to deliver that comfortable retirement. That is ultimately what this occasionally technical Bill is all about. Better returns mean better retirements, and there are few things more important than that."

Bell argued that the bill "adds wind to the sails of some of the major changes already underway in our pension landscape ", including the push towards larger, better-governed schemes, better able to access and deliver returns for savers and to invest in a wider range of assets.

"Those are real improvements shaped by constructive debate and detailed scrutiny in this place and across the pension industry," he stated.

The passage of the Bill has not been without obtacles, and several proposed amendments to the Bill were voted down during the third reading, including an amendment intended to prevent the use of the reserved mandation powers until the government produces a report on the reasons why the powers are needed, as well as a separate clause that would remove the power altogether.

MPs also rejected a clause intended to make it easier for a person to demonstrate that they are terminally ill for compensation from the Pension Protection Fund (PPF) or Financial Assistance Scheme (FAS), as well as a new clause that would have required the government to establish investment funds aimed at areas such as high streets, social housing, care homes, clean renewable energy and other socially beneficial investments.

Despite concerns in some areas, broad cross-party support for the Bill’s overall policy intent remained evident throughout its passage through the House of Commons.

Conservative MP for Faversham and Mid Kent, Helen Whately, clarified that while "we on the Conservative Benches do not agree with all of the Bill, but there is a lot in it that we do welcome, particularly the parts that the Minister inherited from us, including the consolidation of fragmented pension pots, the introduction of the value for money framework and the pensions dashboard".

"Those will help people to manage their pension savings and get better returns," she stated. "We also welcome the government’s amendment of the Bill, reflecting our new clause, to index pre-1997 pensions, for which there was significant consensus across the House."

However, she argued that the Bill still has some "serious flaws", raising particular concerns over the fact that the reserve mandation power remains.

"Nestled within the sensible reforms that the government inherited is a power that no government should wield: the power to mandate how pension funds invest," she stated.

"We should not for a minute underestimate the significance of that. Ministers have insisted it is merely a backstop and a tool they hope never to use, but a threat made just in case is still a threat, and pension trustees know it."

She also urged the Minister to consider the worst thing that someone else might do in their position—in essence, “I am not a bad man, but what might a bad man do?”

"He might be confident that he would not abuse the power, but what if someone else had it?" she queried.

"Trustees are the custodians of people’s life savings. They are not there to carry out manifesto pledges or pet projects, and the Minister should not put himself or any future Pensions Minister in a position to tell them to do so."

In addition to mandation concerns, Whately also raised issues around the question of pension adequacy, arguing that the Bill "falls short when it comes to tackling the serious problem of people under-saving for later life".

However, Whately confirmed that Conservatives would not vote against the Bill, instead urging ministers to “listen to the wise and expert words that will be spoken when it is debated in the other place, and to use that opportunity to fix it”.

Liberal Democrat MP Steve Darling echoed this sentiment, noting that while “there is much to be welcomed in the Bill… as a constructive opposition and a critical friend, I will spend most of my time reflecting on where there could be improvement”.

In particular, Darling stressed the need to introduce a mid-life MOT on investment opportunities, including five years before retirement.

"We think that that could be strengthened significantly," he argued, emphasising that pension understanding and knowledge still remain low.

Other MPs suggested that outstanding issues, most notably adequacy, may need to be addressed through future legislation.

SNP MP for Aberdeen North, Kirsty Blackman, said: “We rarely see pension Bills presented, and I would love to see another—shortly, probably.

“Given that the Minister has made commitments in relation to fiduciary duty, and given that he said he expected such a measure to appear in primary legislation with guidance to follow, I assume that a Bill will follow those commitments. I also think that the adequacy review may—hopefully—kick up some requirements for legislation.

“This House should get used to talking about pensions. As the generations shift, the state pension will become a smaller percentage of what people rely on in retirement, and auto-enrolment and defined contribution schemes mean that significantly more people will rely on private pensions.”

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