Pension schemes will need to publish clear data on their performance, costs and quality of service, under proposals announced this month by the Financial Conduct Authority (FCA), the Department for Work and Pensions (DWP) and The Pensions Regulator (TPR).
If a pension offers poor value, firms and trustees must then fix it by moving savers to better schemes or driving improvements.
According to the FCA, the proposals aim to increase clarity around how pensions perform, what they cost and the quality of service offered, so people can get good value and poor performing schemes are pushed to improve.
Value for money makes a real difference for pension savers: over five years, a £10,000 pot could grow to £10,400 in a poor scheme or £15,100 in a high-performing one, which is over 46% more.
The proposals focus on long term value and build on feedback from a 2025 consultation, with new measures showing what returns and risks savers can expect over the next ten years. This latest consultation is for decision makers across the DC (defined contribution) market, including trustees.
Value for money assessments will be shown in a colour rating, with dark green for strong performance, light green for good value, amber for improvement, and red for poor value, making comparisons clear and easy.
“Good value isn’t just about low costs – it’s about strong performance, good service, and transparency,” said Sarah Pritchard, FCA deputy chief executive.
“We want to see a focus on value. By working with the government and The Pensions Regulator, we will help secure better returns for pension savers.”
“Millions of people rely on pension income to support them through later life,” Nausicaa Delfas, chief executive, TPR, added.
“We have to make sure they get value for their money. This framework will empower decision-makers to either improve their scheme or consolidate out of the market. We want to hear the views of trustees to make sure we get this right and help transform pension saving for millions.”
Torsten Bell, minister for pensions, said:
“It is simply too difficult for people to know whether their pension savings are working for them. That’s not right when we’re talking about something as important as people’s security in retirement. “These proposals change that. Pension schemes’ performance will be public with a simple rating system. In future, savers will know if they are getting a good return or not.
“This is about being straight with people and making sure people’s savings work as hard as they did to earn them.”
The joint proposals are open for comment until 8 March 2026. Final rules will only be confirmed once responses have been considered and are subject to the Pension Schemes Bill receiving Royal Assent.
The Value for Money Framework: Response to consultation, further consultation and discussion paper
