Pensions Minister Laura Trott has announced a major shake-up of private pensions to create “fairer, more predictable, and better-run pensions.”

Measures include a consultation on a new 'value for money' framework.

It sets out how schemes will be expected to provide savers with better value from their investments and a quality level of service.

It has been developed in partnership with The Pensions Regulator and the Financial Conduct Authority.

Ms Trott said: “There is a pension inequality gap between those who had secure retirements thanks to DB, to much more uncertainty now.

“Since 2012, automatic enrolment has transformed the pensions landscape in the UK for the better, but we know there’s more to be done to ensure a fairer future for savers.”

She warned that being in an underperforming pension scheme can lead to someone missing out on thousands of pounds.

She said: “The value for money framework and our new measures will improve security and create better returns for savers, so they can enjoy the retirement they’ve worked so hard for.”

Other measures in the consultation include reforms of the defined contribution scheme charge cap, further work on small pots, and extension of collective defined contribution (CDC) pension schemes.

David Fairs, executive director of regulatory policy, analysis and advice at The Pensions Regulator, said: “Ensuring every pound that savers put into their DC pension pot delivers value for money is vital to help people achieve the best possible retirement.

“The measures announced as part of this far-reaching reforms package deliver on our commitment to put savers at the heart of all we do.”

Sarah Pritchard, executive director of markets at the Financial Conduct Authority, said: “Pensions are complex, and savers need to be able to trust that their providers have the information they need to make the right choices.

“These proposals will help ensure that they take a wide ranging and long-term view – value for money is not just about costs and charges.”

The consultations are open from 30 January 2023 until 27 March 2023.

The Value for Money consultation can be found here: Value for Money: A framework on metrics, standards, and disclosures

The small pots consultation will seek feedback on workable solutions, enabling savers to achieve better outcomes at retirement. Details here: The Small Pots Call For Evidence

The Collective Defined Contribution (CDC) consultation can be found here: Extending Opportunities for CDC