Significant changes to the UK's pension system are scheduled for 2026, set to transform how millions plan for and manage their retirement. Three core reforms will introduce new tools, support mechanisms, and legislative frameworks aimed at addressing long-standing challenges in the pensions landscape.
Pension Dashboards: A Unified View of Your Savings
The long-awaited pension dashboards initiative is finally set to begin its rollout in 2026. All pension schemes will be required to connect to the system by 31 October 2026, although the exact timeline for individuals will depend on the size and type of their pension providers.
This service will, for the first time, allow savers to see all their pension pots, including state, workplace, and personal pensions, in a single, secure online location. Jonathan Watts‑Lay, director at WEALTH at work, highlights that this consolidated view is designed to empower people to make more informed decisions about their financial future by providing clarity on their total retirement savings.
The New Targeted Support Regime
In a move to bridge a critical advice gap, the Financial Conduct Authority (FCA) is preparing to launch a new Targeted Support scheme, anticipated for April 2026. This regime is positioned between generic financial guidance and fully regulated, personalised financial advice.
Under this framework, authorised firms—such as banks, building societies, pension providers, or employers—will be permitted to offer tailored suggestions to groups of individuals who share similar financial circumstances. The goal is to make helpful, specific support more accessible and affordable for those who may not seek or need comprehensive financial advice. The final implementation remains subject to parliamentary approval.
The Pension Schemes Bill: Tackling Small Pots and Underperformance
Expected to gain Royal Assent and become law by mid‑2026, the Pension Schemes Bill addresses two pressing issues. Firstly, it aims to consolidate the millions of small, deferred pension pots created by auto‑enrolment. With approximately 13 million pots valued under £1,000—a number growing by around one million annually—consolidation is viewed as essential for efficiency and better member outcomes.
A newly established Small Pots Delivery Group is developing the framework to transfer these eligible pots to authorised consolidators, with the relevant legislation likely to take effect around 2030.
Secondly, the bill introduces provisions for "guided retirement" options. This will require defined contribution pension schemes to offer default solutions that help convert pension savings into a retirement income. However, Jonathan Watts‑Lay cautions that automatically placing individuals into standardised pathways risks repeating historical problems seen with annuities, where many people missed out on securing better, more suitable deals for their circumstances.
Together, these 2026 reforms represent the most substantial shift in UK pensions in a decade, aiming to modernise the system, boost engagement, and improve financial outcomes for retirees.
