Pensions UK calls for ‘light-touch’ first year of Value for Money framework

The industry body welcomes progress on long‑advocated improvements, such as forward‑looking metrics, refined comparator groups and a layered 4-step rating system, but cautioned that several proposals require clearer guidance and closer scrutiny to avoid distorting investment behaviour or undermining high‑performing schemes.

The framework is landing amid major shifts in the DC market, including consolidation, decumulation reforms and heightened regulatory expectations for small schemes. These changes mean that scheme behaviour, investment strategies and member outcomes are already being reshaped. VfM implementation must be sensitive to this evolving landscape.

Against that backdrop, Pensions UK makes the following recommendations:

• A light-touch first year of assessment, with only red and green ratings used.
• Regular formal market assessments to identify unintended consequences and ensure the framework is additive to the collective goal to deliver better member outcomes.
• Clearer guidance on forward‑looking metrics and service metrics to ensure clarity and comparability.
• Careful treatment of amber ratings to ensure they serve to highlight areas for improvement and support schemes in addressing shortcomings, not to become a staging ground for eventual failure.
• Recognition of ethical and religious investment frameworks and clear guidance on how these schemes should be treated within the VfM assessment to ensure fair and consistent comparison.

Zoe Alexander, Executive Director of Policy and Advocacy at Pensions UK, said: “Clear, consistent and comparable information on value for money is essential. But we need to design a framework supports better saver outcomes, when taken in the round – and is sensitive to the wider change already under way in the market. A light‑touch first year, focused solely on identifying the poorest performing ‘red’ schemes, would allow data systems, definitions and processes to bed in, while helping regulators and schemes to understand and manage possible unintended consequences.”

Read the full response to the consultation here The Value for Money framework (January 2026) - Pensions UK response.

ENDS

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]