What might change with Workplace Pensions over the next few years?

For employers, workplace pensions are no longer just an auto-enrolment compliance task. For medium sized employers, pensions are becoming a cost and governance issue considered at board level, and that shift could accelerate over the next decade.

Why the next few years might be different?

The UK pension market is moving toward fewer, larger, better-governed schemes

With few providers expected to exit the market in the next couple of years, it is no longer enough to say the pension scheme is in place and contributions are paid on time. Employers are increasingly expected to understand whether their arrangement delivers:

• suitable default investment outcomes
• competitive charges and service
• effective member communications
• good retirement outcomes across different workforce groups

This means pension decisions will need to stand up to greater scrutiny from internal and external stakeholders.

The Pension Dashboard will probably change member behaviour

A common issue for members is obtaining a consolidated view of their pension arrangements or locating policies from historic employment. The planned introduction of the Pensions Dashboards later in 2026 will begin to give members access to a new level of pension information/data.

We suspect that with this higher visibility of pension information, staff will probably have more questions and seek more information about workplace pension arrangements. This may include asking about current or previous arrangements with their employer and queries around consolidating pensions (which most employers aren’t equipped to manage).

Auto-enrolment reform is not here yet, but direction of travel is clear

The Pensions (Extension of Automatic Enrolment) Act 2023 created powers to lower the minimum age for automatic enrolment (policy intent: 22 to 18) and to reduce/remove the lower qualifying earnings threshold so contributions can be calculated from the first pound earned (as opposed to being calculated on earnings over £520 each month).

These changes will bring more staff into the scope of automatic enrolment and (if the employer is using ‘qualifying earnings’) increase both employee and employer contributions.

Value for Money (VFM) Framework

Alongside dashboards and auto-enrolment reform, the new VFM framework is likely to be one of the biggest market-shaping developments for workplace DC pensions over the next few years.

In practical terms, VFM assessments are expected to look across investment performance, costs/charges and service quality (i.e. not just headline AMC). The intent of this policy is to make underperformance easier to identify and push weaker arrangements to improve.

This information will be available to staff and stakeholders, which again could drive more member questions (particularly if the employer’s pension provider does score poorly).

Why acting now matters

Over the next few years, employers who treat pensions strategically are likely to see stronger outcomes in:

• attraction and retention
• employee financial confidence
• reduced governance risk
• better value from total reward spending

The information provided is for general guidance only and is not advice. Benefits, eligibility and tax treatment depend on your circumstances and the insurer/provider’s policy wording and schedule, which should be reviewed in full.