Generating Guidance: UK to Set Statutory Advice for Private Pensions
5 December 2025
The UK government’s intentions to create statutory guidance for the trust-based private pensions sector has this week been confirmed by the Minister for Pensions Torsten Bell during the third reading of the Pension Schemes Bill.
Bell said legislation would be produced to offer clarity on how pension scheme trustees can establish a balance between their current responsibilities while aiming to address climate risks and other notable issues. He also stated that he intends to “bring forward clarity” on the next steps for this statutory guidance “in a matter of months”, meaning an update should arrive sometime during H1 2026.
Key Client Takeaways:
Government to Give Statutory Guidance
- The UK government has confirmed plans to develop statutory guidance for trust-based private pension schemes. This guidance aims to clarify how trustees can balance fiduciary duties with considerations like climate risks and systemic factors, without altering their primary duty to act in members’ best interests.
Long-term Investment and Governance Focus
- The statutory guidance is intended to give trustees confidence to invest in members’ long-term interests and support broader economic goals. This aligns with government ambitions for pension schemes to invest domestically, strengthen UK capital markets, and improve governance standards.
Next Steps Following Third Commons Reading
- The Pension Schemes Bill has passed its report stage and third reading in the House of Commons. It now moves to the House of Lords for debate on amendments later this month or early next year. If approved, the Bill will receive Royal Assent and become law, paving the way for statutory guidance to be introduced in H1 2026.
The announcement from Bell came in a Parliamentary debate on the UK Pension Schemes Bill during its third reading. “I agree that more clarity about the ability of trustees to take into account such factors would help,” said Bell. “But rather than hardwiring that into primary legislation, there are advantages to consulting more fully and retaining an ability to be responsive to future developments.
“I can therefore announce today that I intend to bring forward legislation that will allow the Government to develop statutory guidance for the trust-based private pensions sector,” he added. Bell said that the guidance’s goal is to provide “practical support to trustees about how to comply with their existing duties in considering these factors, including what we mean by systemic risks and standards of living”. He additionally stated that there is “good support in the industry for providing that clarity, giving added confidence to trustees that they can invest in the long-term interests of their members and our society” and that the government will “set out more details on our guidance plans in due course”.
The decision to introduce statutory guidance for the trust-based private pensions sector was made in response to an amendment to the Pension Schemes Bill tabled by Bell’s fellow Labour MP Liam Byrne. The amendment proposed to give the Secretary of State a “duty to make regulations clarifying investment duties of occupational pension schemes, including system-level considerations and other matters including impacts of investee firms, beneficiaries’ standards of living and views”. It also sought to impose duties on the FCA and the Secretary of State to make corresponding rules and regulations for workplace personal pension schemes and the Local Government Pension Scheme respectively. A new amendment to the bill to authorise the statutory guidance announced by Bell and incorporating elements of Byrne’s amendment will be put forward by the government, while Byrne’s amendment will not move forward.
Bell said that a “long-running debate” surrounds the attempts to clarify the scope of trustees’ investment duties made in the amendment tabled by Byrne. However, he remarked “almost everyone” involved fiduciary duties agree on “one fundamental principle: a trustee’s primary duty is to act in the interests of scheme members”, adding that “nothing should change or undermine that”.
The Pension Schemes Bill passed its report stage and third reading in the House of Commons this week and will now move to the House of Lords where amendments made by the Commons are expected to debate on either later this month or early next year. If the Lords agree to the amendments and the wording of the Pension Schemes Bill, it can receive Royal Assent and become law. The first reading of the bill took place on 5 June, followed by a second reading on 7 July. However, its progress was then slowed by more than 30 proposed amendments and other bill-related discussions.
The bill aims to “strengthen pension investment by supporting around 20 million people who could benefit from the reforms through better outcomes and greater value in private-sector pension schemes, increasing the amount available to them”, according to an explanatory note from the government. It added that the bill provides for “consolidation in the pensions market and focuses on value and outcomes for members and enables pension schemes to invest in a wider range of assets”.
Several other proposed amendments to the Bill were voted down during the third reading. This including an amendment that aimed to halt the use of the reserved mandating powers until the government publishes a report on the grounds for such powers being required, as well as a separate clause that would altogether eliminate this power.
“Pensions matter,” said Bell. “We need not only to encourage people to save, but to ensure that those savings work as hard as possible for them to deliver that comfortable retirement. That is ultimately what this occasionally technical Bill is all about. Better returns mean better retirements, and there are few things more important than that.”
UK pension schemes have requested support from the UK government to meet the government’s ambitions for pension schemes to invest domestically to catalyse growth within the country, increase international competitiveness and combat declining listings on the country’s stock exchange. The Governance for Growth Investor Campaign (GGIC) – launched in July and backed by UK pension schemes and investors with more than U$2.5 trillion in combined assets – aims to promote the importance of effective corporate governance standards and investor rights mechanisms in strengthening UK capital markets and companies.
This week, the GGIC published a policy vision document that seeks to “challenge misconceptions about corporate governance and its role in capital markets” and show that strong governance is a “catalyst for sustainable economic growth” rather than being a barrier, as reported by Minerva Analytics. The campaign also confirmed that the International Corporate Governance Network (ICGN), Pensions UK, Principles for Responsible Investment and the UK Sustainable Investment and Finance Association (UKSIF) had become supporters of the initiative. Minerva Analytics is a member of the ICGN, Pensions UK and UKSIF.
You can read more of our articles by clicking here.
Last Updated: 5 December 2025