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New DWP pension rules with 20 million UK households set to benefitLabour is planning reforms “tidying up” pensions by building “megafunds” and sweeping away “micro” retirement pots in a

parliamentary Bill.NewsJames Rodger Content Editor07:15, 05 Jun 2025New DWP pension rules with 20 million UK households set to benefit New pension rules for 20 million UK households are set

to be announced by the Labour Party government. Labour is planning reforms “tidying up” pensions by building “megafunds” and sweeping away “micro” retirement pots in a parliamentary Bill.

The shake-up will see Labour create thePension Schemes Bill which it says will create “bigger and better pension funds” and combine smaller pension pots.

‌ The Bill will bring together micro pension pots worth £1,000 or less into one pension scheme, and will require schemes to offer clear default options for turning savings into a retirement

income.

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The Bill is also about securing better value for savers' pensions and driving long-term investment in British businesses to boost economic growth in our country

Article continues below The Government said defined benefit (DB) pension schemes will also have increased flexibility to “safely” release a surplus worth collectively £160 billion, to

support employers’ investment plans and benefit scheme members.

Work and Pensions Secretary Liz Kendall said: “The Bill is about securing better value for savers’ pensions and driving long-term investment in British businesses to boost economic growth in

our country.”

Chancellor Rachel Reeves, who has faced a backlash over her Winter Fuel Payment cuts, described the legislation as “a game changer”.

Article continues below Pensions minister Torsten Bell said: “Pension saving is a long game, but getting this right is urgent so that millions can look forward to a higher income in

retirement.”

Rocio Concha, director of policy and advocacy at Which?, said: “Pensions have become far too complex and fragmented, so it’s good to see the Government taking steps to simplify them and

ensure schemes provide value for money.

“Which? has campaigned for years for the consolidation of small pots, so we are delighted that this Bill is seeking to do just that – a move that will provide greater value for savers and

support them to keep track of their pensions.”