Steve Charlton: As the industry moves into implementation, the discussion must stay anchored on outcomes.
The Pension Schemes Act is a significant moment for the UK pensions industry. After years of consultation and debate, we now need to move on from legislating for change and focus on ensuring the market delivers better outcomes for savers.
There is a lot in the Act that deserves support. A stronger focus on retirement income, continued development of the Value for Money framework, and the ambition to build a more effective pensions system are all steps in the right direction.
But that progress will mean little if these reforms do not translate into tangible improvements for members.
As the industry moves into implementation, the discussion must stay anchored on outcomes rather than become overly focused on structure for its own sake. Consolidation will continue to make an impact, but scale is only useful if it leads to better outcomes—it is not a proxy for quality.
The requirement for schemes to reach £25bn in assets by 2030 has sharpened the debate. Large schemes, or their larger well-resourced parents, may benefit from efficiency and broader investment capability, especially in areas such as private markets and infrastructure.
But the question policymakers and providers should be asking is simple: does that leave members better off in retirement? Adding a private market asset that does not perform as well as its public market alternative is not a good outcome.
Recent research from the Pensions Policy Institute examining consolidation in Australia and Canada reinforces the point. Scale can help drive cost efficiency, but the link between size and investment performance is much less clear-cut. That should not undermine the case for consolidation where it benefits members. It should, however, stop the industry from treating scale as a sufficient outcome in its own right.
This is why the continued evolution of the Value for Money (VfM) framework is so significant.
Moving the conversation beyond cost alone is both necessary and overdue, as it is an objective the government signatories agreed to in the Mansion House Accord. Charges matter, but value is about far more than a low fee number.
Long-term investment performance, governance, risk management, and the quality of member support all shape retirement outcomes. Analysis of defined contribution (DC) scheme performance continues to show wide variation across the market, which serves as a reminder that the cheapest option is not automatically the best one.
The opportunity now is to define value more intelligently, in a way that reflects the real member experience rather than leaning too heavily on isolated and irrelevant metrics.
The Act could also be an important catalyst in another area where the market still has work to do: helping people navigate retirement.
Auto-enrolment has been a success in helping more people save, but it is only part of the job. Too many members still reach retirement without the confidence, support, or clarity needed to make complex financial decisions. Guided retirement pathways are therefore a meaningful development and a real opportunity to improve the transition from accumulation to income.
Technology and AI can also play a meaningful role. Used well, they can help simplify engagement, identify when members may be at risk of poor decisions, and create more intuitive retirement journeys. But this should not be about replacing people with technology, but about using technology to deliver better support for members more consistently and at greater scale.
The industry has known for some time that structural reform was coming. Now that the framework is in place, execution must be the priority.
If implemented well, the Pension Schemes Act could help create a stronger pensions system, improved member engagement, and better long-term financial outcomes. But it will only happen if innovation, consolidation, and regulation remain aligned around the same objective: improving financial security in retirement rather than simply reshaping the market.
In the end, these reforms should be judged in the only way that matters: not by how large schemes become, but by whether people retire with better outcomes, greater confidence, and more financial security.
Steve Charlton is DC and solutions managing director in the EMEA and Asia institutional Group at SEI
