The Department for Work and Pensions says 20m workers will benefit from the mammoth new Pension Schemes Bill which was laid before Parliament today.

The DWP says that millions will find it easier to “manage and get more from their pensions” with the changes planned in the bill.

Initial industry reaction to the bill was positive although some experts said it could have gone further (see separate story).

The bill aims to transform the £2 trillion 'pension landscape', the DWP says, by introducing new value for money requirements, simplifying pension choices and consolidating small and expensive pension schemes.

Among the changes planned, which will be considered by MPs in the coming months:

• Requiring DC schemes to prove they provide value for money, to protect savers from getting stuck in underperforming schemes 
• Simplifying retirement choices, with all pension schemes offering default routes to an income in retirement 
• Bringing together small pension pots worth £1,000 or less into one pension scheme that is certified as delivering “good value” to savers, making pension saving “less hassle” and more rewarding 
• New rules creating multi-employer DC scheme “megafunds” of at least £25 billion, so that bigger and better pension schemes can drive down costs and invest in a wider range of assets 
• Consolidating and professionalising the Local Government Pension Scheme (LGPS), with assets held in six pools that can invest in local areas infrastructure, housing and clean energy
• Increased flexibility for Defined Benefit (DB) pension schemes to safely release surpluses worth collectively £160 billion, to support employers’ investment plans and to benefit scheme members 

Some of the proposals have been floated and discussed by ministers in recent months.

The DWP says the overall aim of the Pension Schemes Bill its to tackle schemes delivering poor returns for savers, combine smaller pension pots, and create bigger and better pension funds. It believes the bill will drive costs down and returns up on workers’ retirement savings.

The DWP sees one of the biggest benefits as the merging of small pension pots to help people who move jobs and often leave small pension pots behind.

Work and Pensions Secretary Liz Kendall said: “Hardworking people across the UK deserve their pensions to work as hard for them as they have worked to save, and our reforms will deliver a huge boost to future generations of pensioners. 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.

“As part of our Plan for Change we’re helping people find work, stay in work, and ensuring that work pays them back to give them the secure income in retirement they deserve.

Chancellor of the Exchequer Rachel Reeves said: “The Bill is a game changer, delivering bigger pension pots for savers and driving £50 billion of investment directly into the UK economy– putting more money into people’s pockets through the Plan for Change.”

Pensions Minister for Pensions Torsten Bell said: “We are ramping up the pace of pensions reform. Workers deserve to get better bang for each buck saved, and these sweeping reforms will make sure they do. Pension saving is a long game, but getting this right is urgent so that millions can look forward to a higher income in retirement.”

• More information on the Government’s Pension Investment Review can be found here: Pensions Investment Review: Final Report - GOV.UK