UK pensions policy rarely stands still but 2025 delivered a flurry of reforms, consultations and political interventions.

From the revival of the Pensions Commission to sweeping changes in the Budget, this year brought both clarity and fresh uncertainty for advisers.

By the time we had reached December, it was clear that the big story of 2025 wasn’t one specific reform but the sheer volume of moving parts.

One thing is clear: the pace of pensions reform is accelerating

In May, 17 of the UK’s largest workplace pension providers committed to invest at least 10% of their defined contribution (DC) default funds in private markets by 2030, with half of that amount (5%) earmarked for UK assets.

The move, under the newly launched Mansion House Accord, builds on 2024’s Mansion House Compact.

The government expects the initiative to unlock up to £50bn for private markets, including around £25bn for UK businesses and infrastructure projects.

Another significant announcement came in July, with the government’s decision to revive the Pensions Commission.

The original commission had recommended auto-enrolment back in 2015 – a scheme that has proved instrumental in getting millions more people saving for their retirement.

Transfer reform also nudged its way into the pension conversation

The new Pensions Commission has been primarily tasked with confronting long-term pension adequacy and the sustainability of the system as a whole.

However, it confirmed it would not be looking at contribution levels or the triple lock – two omissions that experts described as a missed opportunity.

Pension Schemes Bill

This year also saw steady progress on the Pension Schemes Bill, which continued its slow but significant journey through parliament.

At the heart of the bill is the long-awaited Value for Money framework, designed to hold schemes to account on investment returns, service standards and charges.

The legislation also strengthens support for collective defined contribution (CDC) models, widening the door for multi-employer and retirement-only variants.

Advisers will no doubt welcome anything that reduces friction and improves the client experience

Schemes will have to demonstrate value far more transparently – meaning some may feel pressure to consolidate or rethink their investment approach.

Pensions also featured prominently in the Autumn Budget in November.

The new cap on the National Insurance exemption for salary sacrifice, limited to £2,000 from April 2029, will undoubtedly reshape how employers structure their benefits.

Add in tweaks to pension death benefits and updates to defined benefit (DB) surplus rules and it paints a picture of a Treasury edging towards a tighter, more fiscally controlled pension environment.

Triple lock

Amid all this, the government confirmed a 4.7% state-pension rise for April 2026, keeping the triple lock intact for yet another year.

While this provides short-term certainty for retirees, the same old question remains: how sustainable is the triple lock in the long term?

The task now is to step back from all the noise and make sense of what these changes will mean for clients

Particularly when you consider that, left unchanged, the state pension will soon exceed the personal tax allowance, meaning millions of pensioners could be liable to pay tax.

Another major regulatory moment came in December, when the Financial Conduct Authority finalised its rules on targeted support as part of the broader Advice Guidance Boundary Review.

After months of feedback, the regulator largely stuck to its core plan but made some minor but important tweaks, including how annuities could be discussed.

Transfer reform

Transfer reform also nudged its way into the pension conversation.

By the end of the year, firms such as PensionBee were publicly pushing for an overhaul of an “outdated” pension transfer system that many see as slow, inconsistent and overly burdensome.

Advisers, often caught in the middle of these clunky processes, will no doubt welcome anything that reduces friction and improves the client experience.

The new Pensions Commission has been primarily tasked with confronting long-term pension adequacy and the sustainability of the system as a whole

Elsewhere, 2025 saw a quiet but meaningful shift in attitudes towards CDC schemes, with policymakers signalling support for expanding them to unconnected multi-employer groups and even retirement-only structures.

While CDC is still unfamiliar territory for many advisers, it’s increasingly being discussed as a potential bridge between DC flexibility and DB-style income smoothing.

Source: moneymarketing