Baroness Stedman-Scott

The Pension Schemes Act 2026 introduced reforms enabling more trustees of well-funded occupational Defined Benefit (DB) pension schemes to share surplus with the sponsoring employer and benefit members. Regulations will set out the conditions that trustees must meet before surplus can be released. These protections are designed to ensure that members’ promised benefits remain secure. The Department for Work and Pensions will consult on these draft regulations.

The Pensions Regulator (TPR) has published guidance to support trustees in making endgame decisions. TPR will consult on further guidance, on matters that trustees should consider when releasing surplus. Trustees will continue to act in accordance with their duties which require them to act in the interests of scheme beneficiaries, alongside fulfilling the clear standards for effective member communications, as is already overseen by TPR.

TPR’s 2024 survey of trust-based DB schemes indicated that around 62% of the schemes with a long-term objective intended to buy-out in the insurance market. Under the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, trustees must set a funding and investment strategy determining how they plan to provide benefits over the long-term. The DB surplus changes allow trustees of all schemes the choice to be able to use surplus to benefit members and employers, but schemes are not required to release surplus.

The Impact Assessment for the Pension Schemes Act 2026 estimated that £11.2 billion of additional surplus funds are expected to be released over a 10-year period as a result of this legislative change, based on assumptions about take-up and behaviour. £160 billion is the total estimate of DB scheme surplus, for schemes in surplus estimated at September 2024. Actual levels of surplus release will depend on market conditions, individual scheme circumstances and trustee decisions.

TPR is an independent regulator responsible for determining how it deploys its resources to meet its statutory objectives. The Government keeps under review the implications for TPR of developments in the DB pensions landscape and for its resources.

The Pension Schemes Act 2026 introduced reforms enabling more trustees of well-funded occupational Defined Benefit (DB) pension schemes to share surplus with the sponsoring employer and benefit members. Regulations will set out the conditions that trustees must meet before surplus can be released. These protections are designed to ensure that members’ promised benefits remain secure. The Department for Work and Pensions will consult on these draft regulations.

The Pensions Regulator (TPR) has published guidance to support trustees in making endgame decisions. TPR will consult on further guidance, on matters that trustees should consider when releasing surplus. Trustees will continue to act in accordance with their duties which require them to act in the interests of scheme beneficiaries, alongside fulfilling the clear standards for effective member communications, as is already overseen by TPR.

TPR’s 2024 survey of trust-based DB schemes indicated that around 62% of the schemes with a long-term objective intended to buy-out in the insurance market. Under the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, trustees must set a funding and investment strategy determining how they plan to provide benefits over the long-term. The DB surplus changes allow trustees of all schemes the choice to be able to use surplus to benefit members and employers, but schemes are not required to release surplus.

The Impact Assessment for the Pension Schemes Act 2026 estimated that £11.2 billion of additional surplus funds are expected to be released over a 10-year period as a result of this legislative change, based on assumptions about take-up and behaviour. £160 billion is the total estimate of DB scheme surplus, for schemes in surplus estimated at September 2024. Actual levels of surplus release will depend on market conditions, individual scheme circumstances and trustee decisions.

TPR is an independent regulator responsible for determining how it deploys its resources to meet its statutory objectives. The Government keeps under review the implications for TPR of developments in the DB pensions landscape and for its resources.

The Pension Schemes Act 2026 introduced reforms enabling more trustees of well-funded occupational Defined Benefit (DB) pension schemes to share surplus with the sponsoring employer and benefit members. Regulations will set out the conditions that trustees must meet before surplus can be released. These protections are designed to ensure that members’ promised benefits remain secure. The Department for Work and Pensions will consult on these draft regulations.

The Pensions Regulator (TPR) has published guidance to support trustees in making endgame decisions. TPR will consult on further guidance, on matters that trustees should consider when releasing surplus. Trustees will continue to act in accordance with their duties which require them to act in the interests of scheme beneficiaries, alongside fulfilling the clear standards for effective member communications, as is already overseen by TPR.

TPR’s 2024 survey of trust-based DB schemes indicated that around 62% of the schemes with a long-term objective intended to buy-out in the insurance market. Under the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, trustees must set a funding and investment strategy determining how they plan to provide benefits over the long-term. The DB surplus changes allow trustees of all schemes the choice to be able to use surplus to benefit members and employers, but schemes are not required to release surplus.

The Impact Assessment for the Pension Schemes Act 2026 estimated that £11.2 billion of additional surplus funds are expected to be released over a 10-year period as a result of this legislative change, based on assumptions about take-up and behaviour. £160 billion is the total estimate of DB scheme surplus, for schemes in surplus estimated at September 2024. Actual levels of surplus release will depend on market conditions, individual scheme circumstances and trustee decisions.

TPR is an independent regulator responsible for determining how it deploys its resources to meet its statutory objectives. The Government keeps under review the implications for TPR of developments in the DB pensions landscape and for its resources.

The Pension Schemes Act 2026 introduced reforms enabling more trustees of well-funded occupational Defined Benefit (DB) pension schemes to share surplus with the sponsoring employer and benefit members. Regulations will set out the conditions that trustees must meet before surplus can be released. These protections are designed to ensure that members’ promised benefits remain secure. The Department for Work and Pensions will consult on these draft regulations.

The Pensions Regulator (TPR) has published guidance to support trustees in making endgame decisions. TPR will consult on further guidance, on matters that trustees should consider when releasing surplus. Trustees will continue to act in accordance with their duties which require them to act in the interests of scheme beneficiaries, alongside fulfilling the clear standards for effective member communications, as is already overseen by TPR.

TPR’s 2024 survey of trust-based DB schemes indicated that around 62% of the schemes with a long-term objective intended to buy-out in the insurance market. Under the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, trustees must set a funding and investment strategy determining how they plan to provide benefits over the long-term. The DB surplus changes allow trustees of all schemes the choice to be able to use surplus to benefit members and employers, but schemes are not required to release surplus.

The Impact Assessment for the Pension Schemes Act 2026 estimated that £11.2 billion of additional surplus funds are expected to be released over a 10-year period as a result of this legislative change, based on assumptions about take-up and behaviour. £160 billion is the total estimate of DB scheme surplus, for schemes in surplus estimated at September 2024. Actual levels of surplus release will depend on market conditions, individual scheme circumstances and trustee decisions.

TPR is an independent regulator responsible for determining how it deploys its resources to meet its statutory objectives. The Government keeps under review the implications for TPR of developments in the DB pensions landscape and for its resources.

The Pension Schemes Act 2026 introduced reforms enabling more trustees of well-funded occupational Defined Benefit (DB) pension schemes to share surplus with the sponsoring employer and benefit members. Regulations will set out the conditions that trustees must meet before surplus can be released. These protections are designed to ensure that members’ promised benefits remain secure. The Department for Work and Pensions will consult on these draft regulations.

The Pensions Regulator (TPR) has published guidance to support trustees in making endgame decisions. TPR will consult on further guidance, on matters that trustees should consider when releasing surplus. Trustees will continue to act in accordance with their duties which require them to act in the interests of scheme beneficiaries, alongside fulfilling the clear standards for effective member communications, as is already overseen by TPR.

TPR’s 2024 survey of trust-based DB schemes indicated that around 62% of the schemes with a long-term objective intended to buy-out in the insurance market. Under the Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024, trustees must set a funding and investment strategy determining how they plan to provide benefits over the long-term. The DB surplus changes allow trustees of all schemes the choice to be able to use surplus to benefit members and employers, but schemes are not required to release surplus.

The Impact Assessment for the Pension Schemes Act 2026 estimated that £11.2 billion of additional surplus funds are expected to be released over a 10-year period as a result of this legislative change, based on assumptions about take-up and behaviour. £160 billion is the total estimate of DB scheme surplus, for schemes in surplus estimated at September 2024. Actual levels of surplus release will depend on market conditions, individual scheme circumstances and trustee decisions.

TPR is an independent regulator responsible for determining how it deploys its resources to meet its statutory objectives. The Government keeps under review the implications for TPR of developments in the DB pensions landscape and for its resources.

The Child Maintenance Service (CMS) operates within the wider DWP Quality Strategy designed to prevent, detect, and correct errors at the earliest opportunity. Where payments have been made in error, the CMS has processes to refund overpayments to the paying parent and, where appropriate, to seek recovery from the receiving parent. Decisions on reimbursement are made on a case-by-case basis and the welfare of all children affected in any given case will be considered as part of making this decision.

In addition, the Department’s approach to accuracy and error is subject to independent scrutiny, including oversight by the National Audit Office, providing further assurance that robust controls are in place and that any issues are identified and acted upon promptly.

The Department remains committed to improving its systems and processes to reduce the likelihood of error, ensure payments are correct, and take swift action to resolve issues where they occur.

The Child Maintenance Service (CMS) measures assessment accuracy by comparing the total weekly monetary value of correct and incorrect maintenance calculations to produce an overall percentage of correctly assessed cases. For 2024/25, CMS Monetary Value Error (MVE) accuracy was 99.5%, unchanged from 2023/24, where accuracy was also 99.5%. This indicates that the overall level of accuracy in maintenance assessments has remained stable over this period.

The Child Maintenance Service (CMS) Client Fund Accounts are due to be published in December 2026, which will include the assessment accuracy for 2025/26.

The Child Maintenance Service (CMS) operates within the wider DWP Quality Strategy designed to prevent, detect, and correct errors at the earliest opportunity. Where payments have been made in error, the CMS has processes to refund overpayments to the paying parent and, where appropriate, to seek recovery from the receiving parent. Decisions on reimbursement are made on a case-by-case basis and the welfare of all children affected in any given case will be considered as part of making this decision.

In addition, the Department’s approach to accuracy and error is subject to independent scrutiny, including oversight by the National Audit Office, providing further assurance that robust controls are in place and that any issues are identified and acted upon promptly.

The Department remains committed to improving its systems and processes to reduce the likelihood of error, ensure payments are correct, and take swift action to resolve issues where they occur.

The Child Maintenance Service (CMS) measures assessment accuracy by comparing the total weekly monetary value of correct and incorrect maintenance calculations to produce an overall percentage of correctly assessed cases. For 2024/25, CMS Monetary Value Error (MVE) accuracy was 99.5%, unchanged from 2023/24, where accuracy was also 99.5%. This indicates that the overall level of accuracy in maintenance assessments has remained stable over this period.

The Child Maintenance Service (CMS) Client Fund Accounts are due to be published in December 2026, which will include the assessment accuracy for 2025/26.

The Child Maintenance Service (CMS) operates within the wider DWP Quality Strategy designed to prevent, detect, and correct errors at the earliest opportunity. Where payments have been made in error, the CMS has processes to refund overpayments to the paying parent and, where appropriate, to seek recovery from the receiving parent. Decisions on reimbursement are made on a case-by-case basis and the welfare of all children affected in any given case will be considered as part of making this decision.

In addition, the Department’s approach to accuracy and error is subject to independent scrutiny, including oversight by the National Audit Office, providing further assurance that robust controls are in place and that any issues are identified and acted upon promptly.

The Department remains committed to improving its systems and processes to reduce the likelihood of error, ensure payments are correct, and take swift action to resolve issues where they occur.

The Child Maintenance Service (CMS) measures assessment accuracy by comparing the total weekly monetary value of correct and incorrect maintenance calculations to produce an overall percentage of correctly assessed cases. For 2024/25, CMS Monetary Value Error (MVE) accuracy was 99.5%, unchanged from 2023/24, where accuracy was also 99.5%. This indicates that the overall level of accuracy in maintenance assessments has remained stable over this period.

The Child Maintenance Service (CMS) Client Fund Accounts are due to be published in December 2026, which will include the assessment accuracy for 2025/26.

Evidence suggests there are a range of benefits to schemes achieving a greater level of scale through greater assets under management. This includes better governance, economies of scale, increased diversification of assets and improved bargaining power.

A growing number of research papers and evidence suggest a greater number of benefits can arise at £25 billion to £50 billion (or greater) of assets under management, as set out in the Department for Work and Pensions’ November 2024 publication “Pension fund investment and the UK economy” paper. The report can be found here: Pension fund investment and the UK economy - GOV.UK. Increased net returns via lower charges for members and higher net investment returns through diversification, both evidenced as being more possible through scale, can be expected to drive improved member outcomes. This evidence is set out in the Pension Schemes Act Impact Assessment published in December 2025. The Impact Assessment can be found here: Impact Assessment.

The Impact Assessment published alongside the Pension Schemes Act 2026 sets out that increasing scale in defined contribution pension schemes is expected to improve outcomes for savers. It finds that larger schemes are better able to benefit from economies of scale, including lower costs, stronger governance, and improved access to a wider range of investment opportunities and asset classes.

Evidence shows that investment strategy and asset allocation can have a significant impact on return. For example, industry data (Corporate Advisor) indicates that annualised returns for younger savers can vary by over eight percentage points across the market, partly reflecting differences in asset allocation and investment strategies. This highlights the role that scale can play in enabling schemes to access a broader range of investments and adopt more diversified, investment approaches. Taken together, these factors are expected to improve net investment returns over the long term and deliver better value for money for members, although outcomes will depend on market conditions and investment decisions.

The reforms outlined in the Pension Schemes Act 2026 are therefore intended to support the development of fewer, larger, and better‑run schemes capable of delivering improved retirement outcomes for savers. The government has estimated that these reforms could increase retirement outcomes by up to around £29,000 for an average earner over their lifetime.

Evidence suggests there are a range of benefits to schemes achieving a greater scale. This includes better governance, economies of scale, increased diversification of assets and improved bargaining power.

A growing number of research papers and evidence suggest a greater number of benefits can arise at £25 billion to £50 billion (or greater) of assets under management, as set out in the Department for Work and Pensions’ November 2024 publication “Pension fund investment and the UK economy” paper. The report can be found here: Pension fund investment and the UK economy - GOV.UK. Increased net returns via lower charges for members and higher net investment returns through diversification, both evidenced as being more possible through scale, can be expected to drive improved member outcomes. This evidence is set out in the Pension Schemes Act Impact Assessment published in December 2025. The Impact Assessment can be found here: Impact Assessment.

As part of our assessment of the Pension Schemes Act 2026 reforms the Department published an Impact Assessment, in addition to its 2024 report on Pension fund investment and the UK economy. These show that schemes operating at scale are better placed to deliver lower costs, stronger governance and improved long‑term outcomes for savers, reflecting international evidence.

The Act also makes provision for new entrants to operate in this market.

The reforms do not compel schemes to consolidate if they fall below the scale thresholds. However, from 2030, multi-employer schemes that do not meet the prescribed thresholds will be prohibited from accepting future automatic enrolment contributions. This is designed to encourage a market-led transition with schemes responding in a planned orderly way, support by regulatory oversight.

As part of our assessment of the Pension Schemes Act 2026 reforms the Department published an Impact Assessment, in addition to its 2024 report on Pension fund investment and the UK economy. These show that schemes operating at scale are better placed to deliver lower costs, stronger governance and improved long‑term outcomes for savers, reflecting international evidence.

The Act also makes provision for new entrants to operate in this market.

The reforms do not compel schemes to consolidate if they fall below the scale thresholds. However, from 2030, multi-employer schemes that do not meet the prescribed thresholds will be prohibited from accepting future automatic enrolment contributions. This is designed to encourage a market-led transition with schemes responding in a planned orderly way, support by regulatory oversight.

The main driver of outcomes for Defined Contribution (DC) savers is investment returns. The Pension Schemes Act Impact Assessment estimated investment returns could account for over two-thirds of DC pot value at retirement. Variation in outcomes can also reflect differences in contributions being made, costs and charges, and governance quality across schemes.

Investment returns vary across the market. Analysis of Corporate Adviser data from Q42025 shows annualised investment returns for younger savers 30 years from their retirement currently vary across the DC market by over eight percentage points per year (from 14.3% annual returns to 5.5%), primarily due to differences in asset allocation and investment strategy, as well as broader market and macroeconomic performance.

We have not made this specific assessment and to do so would be at disproportionate cost.

There is relevant information in our published statistics which show in November 2025, 26% of households on Universal Credit (UC) with pre-school children and in which all claimants had earnings received the childcare element.

We are undertaking a number of activities to address this key barrier to work. This includes provision of the Governments UC childcare offer. This helps to address a key barrier to work by providing financial help with childcare to make it easier for low-income families to choose to work, stay in work and progress in work.

Eligible UC customers can claim back up to 85% of their registered childcare costs each month regardless of the number of hours they work. This is up to a maximum amount of £1071.09 a month for a single child and £1836.16 a month for families with two or more children.

Additionally, through the Child Poverty Strategy, we are improving access to childcare. This includes our commitment to create more places in schools-based nurseries, £600 million to extend the Holiday Activities and Food programme and free breakfast clubs in every primary school.

Alongside this, the Department for Education will lead a cross-government review of early education and childcare support to design and deliver a simpler system that maximises benefits for child development and parental ability to work or work more hours.

The Government has committed to publish an update to the June 2025 ‘Workplace pensions: a roadmap’. This will include timelines for consultation on the scale measures, which will cover the issues raised amongst others.