The government and regulators are developing a Value for Money Framework to assess whether workplace pensions deliver good long-term value for savers. It would look beyond charges alone by considering investment performance and the quality of service members receive. Contributing to our imperative to connect capital to national priorities and building a nation of investors in No Time to Lose: Reasserting UK leadership in financial and related professional services the framework should support a shift from a focus on cost to a broader assessment of long-term value, helping schemes deliver better outcomes for savers while supporting investment, growth and UK competitiveness.
TheCityUK supports the framework's objective of improving transparency, comparability and accountability across the pensions market. However, it must be designed and implemented carefully to avoid misleading comparisons, unnecessary costs and additional regulatory complexity.
Our response recommends that the framework should:
Avoid adding to an increasingly complex regulatory landscape. With multiple value for money regimes emerging across pensions and retail investment, greater alignment between regulatory approaches will be essential to reduce duplication, improve clarity for consumers and firms, and strengthen the UK's competitiveness.
Be phased in, with first-year data used to test the methodology rather than publish ratings or impose formal consequences.
Be proportionate, reflecting differences between schemes and avoiding comparisons that could misrepresent member value.
Support wider pensions reform, including scheme consolidation, scale and long-term productive investment.
Provide greater clarity on which arrangements and assets fall within scope, supported by practical guidance.
Use actual member experience where it provides reliable evidence, with simplified approaches available where detailed reporting would create a disproportionate burden.
Apply ratings and consequences fairly, giving providers an opportunity to verify data, explain unusual results and address weaknesses.
With these changes, the framework can help improve outcomes for pension savers while avoiding unnecessary burdens and supporting the wider competitiveness of the UK pensions market.
We would like to thank our Capital Markets Group and Pensions Investment Group for all their contributions to our response.