The FCA has announced new proposals which would require pension schemes to publish clear data on their performance, costs and quality of service.
Under the proposed rules, in collaboration with DWP and The Pensions Regulator, if a pension offers poor value, firms and trustees must then fix it by moving savers to better schemes or driving improvements.
The proposals aim to make it clearer how pensions perform, what they cost and the quality of service - so that people can get good value, and so that poor performing schemes are pushed to improve.
Over 16 million workers have defined contribution (DC) pensions. Value for money makes a real difference for pension savers: over five years, a £10,000 pot could grow to £10,400 in a poor scheme or £15,100 in a high-performing one - 46% more.
The proposals focus on long term value and build on feedback from last year’s consultation, with new measures showing what returns and risks savers can expect over the next ten years.
Value for money assessments will be shown in a colour rating, with dark green for strong performance, light green for good value, amber for improvement, and red for poor value, making comparisons clear and easy.
The framework also sets out stronger governance with clear expectations for trustees and providers, alongside clear steps to take when schemes are not giving members good value, including closing them to new business and moving members to better-performing schemes.
The proposals are open for comment until 8th March 2026. Final rules will only be confirmed once responses have been considered and are subject to the Pension Schemes Bill receiving Royal Assent.
Sarah Pritchard, deputy chief executive at the FCA, said: "Good value isn’t just about low costs - it’s about strong performance, good service, and transparency. We want to see a focus on value. By working with government and The Pensions Regulator, we will help secure better returns for pension savers."
Nausicaa Delfas, CEO of The Pensions Regulator, commented: "Millions of people rely on pension income to support them through later life. We have to make sure they get value for their money. This framework will empower decision -makers to either improve their scheme or consolidate out of the market. We want to hear the views of trustees to make sure we get this right and help transform pension saving for millions.”
Torsten Bell, minister for pensions, added: "It is simply too difficult for people to know whether their pension savings are working for them. That's not right when we're talking about something as important as people's security in retirement.
"These proposals change that. Pension schemes' performance will be public with a simple rating system. In future, savers will know if they are getting a good return or not.
"This is about being straight with people and making sure people’s savings work as hard as they did to earn them."
Ben Infield, senior policy adviser for long-term savings at the ABI, said: “2026 is set to be a transformative year for pensions, and the Value for Money framework will play a key role within this. By assessing workplace DC schemes on their overall value, rather than a narrow focus on cost, employers will be able to compare schemes more holistically, helping to drive better outcomes for savers.
“We’re pleased to see the regulators and government have listened to industry and included provisions for a more nuanced approach on scoring assessments as well as a reduced set of data requirements. The inclusion of forward-looking metrics is also vital, to ensure schemes aren’t penalised for investing in global and UK private markets where long-term investment can deliver greater value over time.
"Plans to apply the framework consistently across both trust and contract-based schemes will also help to ensure a level playing field for providers and clear outcomes for savers. We look forward to continuing our close work with the FCA, TPR and DWP through the consultation, paying close attention to the revised scoring assessment.”
