Our year two update on our three-year corporate plan (2024 to 2027) shows how we will continue to drive up trustee standards, deliver value for savers and encourage the development of safe pathways that lead to good retirement outcomes.
Published: 17 July 2025
Message from the Chair and the CEO
Pensions continue to undergo rapid changes.
We have created a nation of pension savers thanks to automatic enrolment (AE), which over the last decade has seen 11 million more people start saving. Now, the challenge is to make sure those people have sufficient savings and financial wealth to meet their needs at retirement.
To make that a reality, the pensions system must be as efficient and effective as possible. That means delivering value for money from the moment savers join a pension right the way through to retirement. At the same time, we must also consider whether there are any unnecessary barriers to helping occupational pension schemes invest their £1.8 trillion of retirement income in a way that helps generate growth in savers’ interests.
Pension schemes are operating in an uncertain investment environment. Trade and geopolitical tensions brought about by US trade tariffs are driving market volatility. We expect volatility to persist for some time as the impacts of trade tensions and central government policy responses feed through. That is why our firm focus in the year ahead will be on making sure that all schemes have high standards of investment governance with trustees who make good decisions on behalf of savers in all economic conditions.
We also support investment in diverse assets where they have the potential to generate higher returns for savers and benefit the UK economy. The two do not have to be in conflict. That is because a growing economy means better jobs, higher pensions contributions and more options in retirement for millions of pension savers.
The Pension Schemes Bill is an important first step towards making the pensions system work for everyone. These reforms will mean savers are within one of fewer, larger pension schemes: mega schemes which have the potential to enhance governance practices, grow people’s pots and potentially benefit the UK economy.
This will drive much of our work over the next year, ensuring that the government’s policy intent is delivered and the market can respond and capitalise on the opportunity this presents. We look forward to working with our sponsoring department, the Department for Work and Pensions (DWP), providing input into Phase 2 of the Pensions Review, which will explore the broader question of adequacy and whether people are saving enough for retirement.
But the Bill is only part of the solution. Collectively, as a pensions system, we must work together to ensure that people get good retirement outcomes from pension saving. That is why over the course of this year we will focus on delivering against the following corporate priorities:
- Savers get good outcomes when they join a scheme because employer compliance with automatic enrolment duties remain high.
- All schemes are well-run, with the capabilities of those running schemes improving over time. This must be reflected in improvements in governance and an increased emphasis on improving the quality of scheme administration.
- Pension schemes offer value to savers and invest in productive assets and innovative products, where it is in savers’ interests to do so.
- Savers get good outcomes at retirement because they will be supported into value for money products and services; we will ensure that defined benefit (DB) savers benefits remain safe and call on the industry to protect savers from scams.
To deliver against these priorities, we must also continue our evolution as a regulator and deliver our missions to protect, enhance and innovate in savers’ interests.
Good governance is foundational to the pensions system. Our priority is to raise standards of trusteeship through a new strategy and to focus on improving investment governance practices so that all savers benefit from diversified investments. We will work with industry to bring trusteeship into line with other professions and corporate governance standards, including improving the quality of scheme administration.
We will also continue our shift towards a more prudential style of regulation, addressing risks not just at an individual scheme level, but also risks that impact the market and wider financial ecosystem.
This starts with an open and transparent dialogue with those who run pension schemes and an expanded risk-based and outcome-focused market oversight approach across master trusts, professional trustee firms, public service/public sector schemes and administrators. We will look to collaborate on shared issues but also be clearer on the outcomes we seek for savers so there are no surprises on either side – with swift enforcement action if schemes ignore our warnings.
Innovation is central to delivering good outcomes for pension savers. That is why we have created a new innovation support service, providing a range of services to schemes which will help bring better products more safely and securely to market.
We will also continue to capitalise on the transformative potential of digital, data and technology (DDaT). Delivering the blueprint set out in our DDaT and data strategies, we will reduce unnecessary burden and streamline regulatory data requirements around scheme and supervisory returns. We will also challenge the industry to up their game and help set us all on a path towards open data standards. This has the potential to enable the free flow of pensions data, enhancing competition and supporting innovation in savers’ interests.
We continue to invest in our people and enact a culture change. This means we will make sure our interventions with the market add value, our systems are fit for the future and a saver outcome focus runs through all that we do.
This Corporate Plan shows how we will deliver better outcomes for the millions of people that rely on a pension to support them in later life. The pensions landscape is changing, and we are changing with it.
Challenges in the pensions landscape
Significant uncertainty surrounds domestic and global economic developments with growth remaining stagnant and inflation sticky, keeping interest rates higher for longer. Consumer and business confidence has trended lower over the last year, which impacts the pension industry. Employers sponsoring pensions have had to manage against increased production costs, while rises in the cost of living have created a challenging environment in which to save. The uncertainty around the impact of a potential trade war is likely to slow global growth and put increasing pressure on governments to improve supply side productivity growth to sustain government expenditure commitments. Market volatility is likely to remain during economic-related concerns, including global policy uncertainty.
Against this backdrop, consolidation in the pensions industry continues, with the number of defined contribution (DC) schemes decreasing 15% last year to under 1,000 for the first time. We welcome the shift towards fewer, larger, well-run schemes in the market. These schemes offer the ability to invest across a range of assets in their members' interest and have the scale to offer administrative efficiency and good governance. With consolidation also comes the ability to invest in a broader range of diversified investments. We are supportive of the policy agenda which looks to remove any unnecessary barriers to pension schemes investing in productive assets if it is in savers' interests to do so.
The shift to a more concentrated trustee industry continues. Mergers and acquisitions across professional pensions companies have made these companies more systemically important for the delivery of good outcomes.
Building on the success of AE, it is crucial that as savers progress towards retirement, they have an appropriate choice of decumulation pathways open to them. We are seeing innovation and the beginnings of harnessing the power of data and artificial intelligence (AI). Building on pensions dashboards, the savers’ retirement journey will evolve quickly, and this will represent its own opportunities and challenges that we will need to be mindful of.
Our priorities for the next year
Our three-year Corporate Plan (2024 to 2027) sets out how we will protect pension savers’ money, enhance the pensions system and support innovation in savers’ interests. Delivery of these missions continues to drive our prioritisation.
As we move into the second year of our three-year plan, we continue to focus delivery around the key priority areas set out in our three-year corporate plan a year ago. Learning iteratively from our impact on the market, we have refined and further developed core activities for delivery through 2025 to 2026.
The public expects us to help the pensions system deliver good outcomes from workplace pension saving. That is why over the next year our priority regulatory commitments are that:
- Savers get good outcomes when they join a scheme because employer compliance with automatic enrolment duties remain high.
- All schemes are well-run, with the capabilities of those running schemes improving over time. This must be reflected in improvements in governance and an increased emphasis on improving the quality of scheme administration.
- Pension schemes offer value to savers and invest in productive assets and innovative products, where it is in savers’ interests to do so.
- Savers get good outcomes at retirement because they will be supported into value for money retirement products and services; we will ensure that DB savers benefits remain safe and call on the industry to protect savers from scams.
Savers get good outcomes when they join a scheme
It remains of paramount importance that savers receive what they are entitled to when they join a scheme, through their working lives and retirement. To that end, employer compliance with their AE duties continues to be a key priority and we continue to develop our approaches and interventions to make them as efficient and effective as possible:
- We will make sure eligible workers are enrolled into a workplace pension, and their contributions are paid on time and in full through high levels of employer compliance with AE.
- We will continue to hold employers to account in the interests of savers, directing enforcement and regulatory tools where they are most needed.
- As mentioned above our new enforcement strategy will drive new enforcement approaches alongside targeted compliance to ensure we are as efficient and effective in regulating AE as possible.
All schemes are well-run
Pension savers rely on those making decisions on their behalf to always act in their best interests. That means trustee boards making good decisions informed by high-quality data. However, increasingly other entities have a large impact on how scheme decisions are made and how services are delivered.
That is why over the next year our priorities are to:
- raise standards of trusteeship and investment governance in the best interests of savers
- broaden our market oversight approach
- improve and unlock the transformative power of data across the industry
Core delivery 2025 to 2026
- Develop a new strategy for raising the standards of trusteeship, which will help inform our compliance and oversight approach to the market.
- Expand our market oversight to the largest professional trustee firms covering over £1 trillion worth of assets, to identify and mitigate any risk to pension savers.
- Continue to evolve our influence and impact of the administration market, strengthening our engagement with eight of the largest commercial and non-commercial administrators.
- Continue to make sure schemes are pensions dashboards-ready, with connection commencing and continuing throughout the year. This involves an extensive programme of communications and engagement with our regulatory partners and guidance updates.
- Making sure that trustees have the right data hygiene in place before dashboards through our continuing data quality regulatory initiative, challenging hundreds of schemes who may be failing our expectations.
- Work towards common data standards via the implementation of our DDaT and data strategies, providing an opportunity for a free and safe flow of pensions data.
- Ensure that trustees have effective operational and cyber resilience in place for the schemes they manage.
- Raise standards of investment governance and ensure trustees practice good systemic risk management, including through an updated environmental, social and governance (ESG) strategy.
- Support access to good investment opportunities, using our sector insights to help government understand and prioritise the kinds of growth opportunities that UK pension schemes will find attractive to invest in, producing a report and sharing data and insight as appropriate.
- Ensure pension schemes do not present a threat to financial stability, publishing liability-driven investment (LDI) analysis and update reports to the market and finalising data needs and information sharing arrangements with the Bank of England.
- Support the Ministry of Housing, Communities, and Local Government as it evolves the regulatory framework for Local Government Pension Schemes and expand our engagement with scheme managers as these new expectations come into force.
- Working with the DWP to expand our supervisory approach to include public sector/public service schemes.
- We will continue to hold employers and trustees to account in the interests of savers, directing enforcement and regulatory tools where they are most needed. This will be supported by delivery of a new enforcement strategy, leading to the implementation and embedding of enhanced enforcement approaches.
Pension schemes offer value to savers
Defined contribution savers rely on the system working as hard as it can to deliver them good retirement outcomes. That means that value for money must be the guiding principle in all that we do. Over the next year, our priorities are to continue to:
- challenge schemes not offering value
- encourage greater transparency in the market to enable effective competition
- support innovation in savers' interests, particularly around decumulation
Core delivery 2025 to 2026
We will do the following:
- Continue to work in partnership with the DWP and the wider regulatory family to deliver core legislative solutions through the Pension Schemes Bill 2025, including:
- working jointly with the Financial Conduct Authority (FCA) on our value for money framework, identifying the key metrics that matter for savers and moving the focus from cost to value
- defining and delivering guided journeys for savers into retirement and ensuring new innovative decumulation solutions meet their needs
- addressing the small pots issue to help prevent value loss and help make viewing lost pots easier via pensions dashboards
- preparing to regulate a landscape of ‘megafunds’ with the potential to deliver enhanced outcomes for savers and the UK economy as a whole
- Challenge small schemes which are non-compliant with the requirement to undertake a detailed value for members assessment through a continuing regulatory initiative. This will encourage consolidation in savers’ interests.
- Encourage greater transparency via the voluntary disclosures of investment and asset allocation data across the DC market.
- Continue to evolve and expand our prudential style of master trust and DC scheme supervision, delivering a risk-based approach and facilitating expert to expert market interactions. As part of this, we will review our regulatory capital reserving requirements for master trusts to ensure they are proportionate, which could unlock hundreds of millions of pounds for investment.
- Support innovation in savers’ interests by developing an innovation framework and criteria to trial pensions innovation ideas.
- Launch an innovation support service to test a variety of innovation services, with a priority focus on ‘at retirement’ solutions.
- Collaborate with the DWP to develop the regulatory framework for multi-employer collective DC schemes, including any code where required.
Savers get good outcomes at retirement
Many DB schemes are better funded than at any point in recent memory. More than 82% of schemes are fully funded and many are considering how to secure their future, whether that is an endgame or, for open schemes, continuing pension provision. Our priority is to help those schemes focus on their long-term objectives and make decisions that are right for their scheme and their members.
Core delivery 2025 to 2026
- Evolve and improve our approach to DB supervision, learning from our experience with master trust and DC supervision, to support embedding of the principles of the DB funding regime.
- Lead the Pension Scams Action Group, working with partners and industry to mitigate the risk of scams to better protect all types of savers.
- As many schemes already meet the low dependency requirements of the new regime, we are working with the DWP and others to support innovation in endgame solutions, having published guidance in June of this year. We will also work to support and develop clear legislative frameworks to operate in through the Pension Schemes Bill 2025. This includes the following:
- Moving the basis on which surplus can be returned to schemes and employers to enhance member outcomes.
- Defining a clear legislative framework for superfunds, continuing to work with those operating within the interim regime, learning what works best to support both innovation and good saver outcomes, and updating best practice and guidance accordingly.
Our evolving organisation
To deliver our priorities we must continue our evolution towards a different style of regulation. This means understanding and helping to mitigate risks within individual schemes, but also wider risks across the market and socio-economic landscape.
Our approach requires us to:
- seek out rich evidence and insights to understand the complex financial ecosystem and use this as the basis of our regulatory decision-making
- increase transparency on the outcomes we are prioritising for savers through clear and ongoing regulatory dialogue
- ensure we have a proportionate regulatory environment and prioritise our own interventions and asks of industry where they can have most impact for savers, thereby reducing regulatory burden
- foster greater collaboration and innovation with the industry to make those outcomes a reality for all
- assess and improve collection and utilisation of data for more efficient regulation and reduced burden for schemes
This will only happen if we invest in our people and change our culture to be more market-facing and outcome-focused – with greater alignment, accountability, collaboration and a performance mindset.
Our funding is derived from two main sources: a grant-in-aid from the DWP to fund our Pensions Act 2004 duties (levy-funded activities) and a separate grant-in-aid from general taxation relating to the AE duties arising from Pensions Act 2008 (AE-funded activities).
The budget for 2025-26 is £115.4 million (excluding salary-related adjustments) which represents a £0.1 million reduction from the previous financial year.
Managing our performance
Performance measurement
Our revised performance measurement framework, as set out in last year’s three-year Corporate Plan, reflects our evolving priorities and provides a clear line of sight between our strategic ambitions and how we assess our work and its impact over any given financial year and the years to come.
From 2025, our framework comprises a set of overarching corporate priorities, under which there are a set of supporting priority outcomes which have informed our business plan for the year. These have been adjusted from last year’s Corporate Plan to reflect how our work has evolved over the last 12 months.
This includes our contributions to delivering sustainable growth for the UK economy in savers’ interests, against which we’ve developed a set of specific key performance indicators. These are included below. They form part of our regulatory action plan alongside our regular quarterly performance reporting to DWP.
Corporate priorities and supporting outcomes
Corporate priority: Regulatory 1
Good outcomes – joining a scheme: We will ensure that employers’ compliance with their automatic enrolment duties remain high.
Outcomes relating to this priority
1.1 – Compliance with AE duties: Percentage of employers ultimately compliant with their AE enrolment/re-enrolment duties remains above target. The target is 90% of employers having arrangements with a qualifying scheme.
1.2 – Maintaining contributions: Percentage of employers making timely and accurate pensions contributions remains above existing target. The target is 94% of employers making contributions before they become late by three months or more.
Corporate priority: Regulatory 2
Schemes are well-run: We expect the capabilities of those running schemes to improve over time and for this to be reflected in improvements in governance and an increased emphasis on improving the quality of scheme administration.
Outcomes relating to this priority
2.1 – Improved scheme governance: Baseline of new ‘governance quality’ measures reflecting key elements of the general code, based on composite measures that will be developed and deployed in DB and DC surveys.
2.2 – Administrative preparedness for pensions dashboards: Schemes are ready for pensions dashboards in a timely manner (timely is framed in terms of the date in guidance pertaining to that scheme).
2.3 – Improved environmental, social and governance (ESG) recognition: Baseline percentage of taskforce on climate-related financial disclosure (TCFD)-aligned climate reports that demonstrate understanding of issues related to climate scenario analysis.
2.4 – Financial stability: No material resilience headroom breaches across all types of LDI mandates. We will also seek evidence of robust processes around collateral management.
Corporate priority: Regulatory 3
Fewer schemes, delivering good outcomes: We expect pensions schemes to offer value to savers and invest in productive assets and innovative products, where it is in savers’ interests to do so.
Outcomes related to this priority
3.1 – DC schemes offer value: We expect pensions scheme to offer value to savers.
3.2 – Growth in the consolidation market: Measured by growth in proportion of savers in collective DC schemes, DC master trusts and DB models used for consolidation.
3.3 – Reducing capital reserving requirements for master trusts to generate growth.
3.4 – Encourage consolidation and consideration of investment in productive assets. The value for money framework will bring public disclosure of long-term risk adjusted net returns to help drive competition, growth and enhanced member outcomes. In advance of this, we will drive consolidation in savers’ interests and encourage the voluntary disclosure of asset allocation data to shine a light on the relationship between asset allocation and net performance. This needs to include the value for members regulatory initiative.
3.5 – We will develop an innovation framework and criteria to trial pensions innovation ideas, launching a hub to test a variety of innovation services with the market by autumn 2025.
Corporate priority: Regulatory 4
Good outcomes – at retirement: We will encourage the development of safe pathways for savers in their retirement; ensure that DB savers’ benefits remain safe; and call on the industry to protect savers from scams.
Outcomes related to this priority
4.1 – DB savers get their pensions: DB schemes progress towards low dependency funding. This is measured by aggregate ‘low dependency’ funding ratio as at 31 March 2025.
4.2 – Availability of decumulation pathways: Baseline percentage of scheme members approaching retirement, who are offered by their scheme two or more decumulation products to access their pension pots other than full and partial cash withdrawal.
4.3 – Protection from pension scams: Percentage sign up to pension scams pledge and ‘self-certification’.
Corporate priority: Enabling 1
Developing our people and culture: We will promote an engaged, skilled and motivated workforce who enable a high performing organisation and who can bring their whole selves to work and be treated equally, fairly and professionally.
Outcomes related to this priority
1.1 – Workforce stability: We will maintain a stable and healthy workforce. We ensure a stable workforce as measured by the workforce ‘stability index’.
1.2 – Employee satisfaction: We will work towards high levels of employee satisfaction. New indicators of employee satisfaction will be developed and delivered through more frequent employee ‘pulse’ surveys.
1.3 – Equality, diversity and inclusion (EDI): We will promote an equal, diverse and inclusive workspace. We will monitor our progress in supporting EDI through recruitment, pay and senior management representation and baselining our progress against key EDI measures through reporting and explaining variances where they occur.
1.4 – Strengthen our foundations: We will strengthen our foundations by building on our skills, talent, capability and capacity, directing resources where they are most needed.
Corporate priority: Enabling 2
A data-led, digital-enabler underpinned by modern technology: Harnessing the power of digital, data and technology to drive innovation, efficiency and regulatory excellence in the best interests of savers, whilst minimising the regulatory burden on schemes.
Outcomes related to this priority
2.1 – Deliver Submit: We plan to enable adoption of the new DB funding code by releasing new guidance on processes this year. This includes the collection of DB data as informed by our user centred approach to digital delivery.
Improved data sharing – we will conduct a review of scheme return and supervisory return data collection requirements by the end of March 2026 to identify options to reduce unnecessary burdens on schemes. Subject to the outcome of the review, the government will consider how and what we capture including amendments to legislation as required.
2.2 – Improve system hygiene: We will invest to ensure that our core infrastructure remains modern and robust. This will mean delivering across multiple systems hygiene projects.
2.3 – Design and deliver new standards: We will develop common design, technology and data rules, and building blocks. This will ensure strong integration, efficiency and improved security. It will be supported by new standards that will be implemented during 2025-26.
2.4 – Reduce unnecessary regulatory burdens: over the course of 2025-26, we will monitor our engagements with schemes and employers seeking to reduce unnecessary regulatory burden whilst maintaining high levels of compliance. As part of this, we will monitor the quality and value of regulatory interaction and make sure that new interventions are not just clearly linked to delivery of better outcomes for savers but are also efficient and effective in delivery.
Corporate priority: Enabling 3
Ensuring environmental sustainability: We will reduce our environmental impact and progress towards the delivery of our net zero carbon emissions targets.
Outcomes related to this priority
3.1 – Greening Government Commitment (GGC) targets: We will continue to deliver on the GGC targets.
3.2 – Net zero by 2030: We will deliver an annual reduction in the emissions in scope for our 2030 net zero target.
Corporate priority: Enabling 4
Ensuring robust financial controls, efficiency and effectiveness. We will ensure robust financial controls, seek continual improvements in our efficiency and effectiveness and measure the impact of our regulatory interventions.
Outcomes related to this priority
4.1 – Ensuring robust financial controls: Our financial procedures and controls will ensure that our budgets and funding stay within tolerances agreed with the DWP.
4.2 – Improving our efficiency: We will embed a new organisational design and develop new ways of working aimed at improving the efficiency and effectiveness of what we do. Efficiencies will be evidenced using the recommendations of the Government Efficiency Framework.
4.3 – Evidencing our effectiveness: We will build evaluation into our assessments of performance across our regulatory priorities through baseline research and targeted assessments of existing activities.