On 29 May 2025, HM Treasury (HMT), the Department for Work and Pensions (DWP) and the Ministry of Housing, Communities and Local Government published their final report on the Pensions Investment Review, along with related consultation responses.

Background

The Pensions Investment Review was launched by the Chancellor of the Exchequer on 20 July 2024, with a focus on tackling fragmentation in the defined contribution (DC) workplace pensions market, boosting investment in productive assets, and increasing savers’ returns. The Review also considered how to tackle fragmentation and inefficiency in the Local Government Pension Scheme in England and Wales (the LGPS) to unlock its investment potential.

Final report

The final report sets out the final policy positions and reforms of the Review, building on those consulted on as part of the Interim Report published in November 2024.

DC workplace pensions reforms

The reforms set out in the report are intended to deliver a major consolidation in the DC workplace pensions market, enabling more investment in productive assets and greater potential returns for members of DC workplace schemes. The reforms include:

  • Scale: Legislating (through the Pension Schemes Bill) for a larger, more consolidated system to facilitate benefits of scale, with lower costs, an ability to invest in a wider range of assets, and higher returns for savers.
  • Consolidation: Reducing the overall number of default arrangements in the marketplace by legislating to prevent new default arrangements from being created and operated, except in certain circumstances with regulatory approval.
  • Cost versus value: Switching the focus of the pensions system towards value and away from a narrow focus only on cost.
  • Investment from DC schemes: Including a reserve power in the Pension Schemes Bill which would, if necessary, enable the Government to set quantitative baseline targets for pension schemes to invest in a broader range of private assets (including in the UK).

LGPS reforms

The reforms also seek to deliver consolidation in the LGPS, overhauling the way it invests to deliver large pools of professionally managed capital in line with international best practice while embedding investment in local communities as a priority. The aim is to place the scheme on a stronger, more sustainable footing in the interest of members, employers and local taxpayers.

Consultation responses

Alongside the final report, the Government has also published responses to the two consultations it published alongside the interim report:

Next steps

The Government notes that legislation to implement the reforms will form part of the forthcoming Pension Schemes Bill.

The next phase of the Pensions Review is due to be launched in the coming months and will focus directly on the question of the adequacy of pension outcomes. The Government plans to announce the reviewers and terms of reference “in due course”.

The Government also intends to publish a roadmap for the private pensions market in due course, which will set out how the Pensions Investment Review reforms combine with wider changes and will include the broader suite and sequencing of those reforms.