Julian Lyne, Interim Executive Director of Market Oversight, gave a speech at the Pensions Age Northern Conference, entitled 'Pensions regulation and growth: A new era for savers and the UK economy'.
Introduction
Good morning, everyone. I hope you’ve had a chance to have a bite to eat and a cup of coffee – we have a very interesting and busy day ahead of us.
It’s a pleasure to be here in Leeds, and I’d like to thank Pensions Age for the invitation.
I’m actually a relative newcomer to The Pensions Regulator (TPR), so have enjoyed being let loose at several conferences over the past months. It’s been a great opportunity to get to know so many of you, particularly at such a pivotal time for the industry.
They say that history doesn’t feel like history when you are in it. But I think most of us in this room know that we are entering the next phase of the pensions story.
The critical chapter in which we move from a savings system to a fully holistic pensions system – with greater access to data, the opportunity for greater sophistication and ultimately better outcomes for savers.
The Big Picture and the Pensions Bill
One of our core missions at TPR is to enhance the pension pots of savers. To ensure that, over time, savings grow so people have enough money for a dignified and comfortable later life.
Therefore, the government’s growth agenda – and by extension the Pension Scheme Bill – aligns with our work.
I am sure you have all, by now, read up on the details of the bill. For me, the key parts are the push for fewer but larger schemes, guided retirement planning, provision for defined benefit (DB) superfunds to manage legacy liabilities more securely, and value for money.
Driven by a search for scale and desire to work in the saver’s best interests, I believe the bill will fundamentally change the market.
And that change is needed.
We know that many defined benefit schemes are in end game territory, and defined contribution (DC) schemes are becoming the norm.
Whilst it is testament to the success of auto-enrolment that 8 in 10 workers now save into a workplace pension, we must not lose sight of the fact that DC schemes are still in their infancy and 12.5 million savers are still at risk of inadequate retirement income.
That’s so much more than a statistic. It’s millions of people enduring anxiety and hardship in their later years.
We also know that decumulation is stressful and opaque. Without a high level of financial literacy, savers who have been used to being pretty passive when it comes to pensions, have little hope of navigating the transition to retirement.
Finally, a lack of data and transparency means that our savers haven’t always received the best value for money.
So, change is needed.
The government has given us guardrails and a timeline for that change. And now, as regulators, trustees, administrators and the industry at large, we must make sure that when people entrust us with their hard-earned savings – we make that money go as far as it can and suitably support them with their retirement decision-making.
TPR’s changing role
As regulator, we are embracing a new regulatory philosophy. One that sees growth and saver outcomes not as competing priorities, but as mutually reinforcing goals.
One that is as interested in positively influencing better practices within the market as it is regulating players within it.
We are actively encouraging schemes to adopt long-term investment strategies that support both member outcomes and national growth.
We are reducing unnecessary regulatory burdens to free up capital for investment in high-quality, diverse assets that deliver for savers.
Regulation in an evolving industry
Let’s take a closer look at everyone’s favourite topic – the easing of red tape!
We want to make it easier for schemes to adapt to the changing landscape.
We want to support industry as it ensures savers have enough money for a dignified later life.
Already those of you from the DB world will recognise our shift in approach in support of the DB Funding Code. We expect around 80% of schemes to be able to meet our Fast Track approach, resulting in less contact from TPR and lower regulatory burden on schemes through simpler reporting.
Over the coming year we will also conduct a broad review of our scheme return and supervisory returns, to rationalise and remove asks which aren’t directly related to good saver outcomes. To focus our activity on where the greatest risk lies and let industry focus on the task at hand – delivering for savers.
But delivering for savers also means protecting their pots.
As regulator, this means ensuring that the people who run pension schemes are able to meet the challenge of operating in a more complex, sophisticated environment.
Smaller schemes will consolidate into larger, more sophisticated trusts and funds – indeed in 10 years, we expect the master trust market to contain schemes managing over £50 billion in assets, some of which will exceed £100 billion.
That’s why we’ve transformed how we supervise Master Trusts and DC schemes.
Our new model is:
- Segmented: Schemes are grouped by structure and risk profile.
- Targeted: Engagement is tailored to the risks each segment poses.
- Expert-led: High-risk schemes are assigned multi-disciplinary teams.
- Real-time: We’re moving from broad data collection to focused, timely oversight.
A recent 14-week pilot with three large master trusts showed that this approach leads to faster problem-solving, better dialogue, and stronger outcomes.
We also want to see trusteeship come into line with other professions and corporate governance standards. To that end, TPR will be launching a strategy, through our compliance and oversight approach, which outlines the five key traits of successful trusteeship.
Whilst we know that there will continue to be smaller schemes, we would ask those trustees to consider whether they can really offer the best value for money for savers. If not, we would encourage them to consolidate.
Value for money
Indeed, value for money lies at the heart of everything. It is the reason why savers chose to put their money in a workplace pension – rather than in a biscuit tin under the bed.
The value for money (VfM) framework will require schemes to provide comparable, standardised data. This aims to:
- increase transparency
- enable better decision-making by trustees and employers
- drive competition based on quality and outcomes
We are developing the VfM framework in collaboration with the Financial Conduct Authority (FCA) and the Department for Work and Pensions (DWP).
Schemes will be required to report against the standardised metrics contained with the framework. Trustees must compare their scheme’s performance with others to identify areas for improvement.
This framework is designed to shift the focus from cost alone to overall value, including investment performance and service quality.
This is just one small part of the overall pensions bill, but I think it really underlines the significant changes that the pensions industry is going to have to work with as we determine the best for savers.
Whilst the framework will look to provide consistent, comparable data in the marketplace over a long-time horizon, it likely won’t be in force until 2028.
That is why later this year, TPR will work with the Financial Conduct Authority (FCA) to launch a joint market-wide voluntary survey – asking for detailed asset allocation information from major DC schemes.
Running as an annual exercise, we hope to play a version of this data back to the market to allow trustees to gain better insights on any connection between value and asset allocation and make more informed investment decisions for their kinds of savers.
Innovation
None of the changes we need to make to support better saver outcomes are possible without innovation.
There has been a perception that the concept of innovation and regulation is oxymoronic. That the two simply don’t co-exist.
That is simply not true.
In fact, TPR is building an environment in which industry can create saver-centric solutions.
We recently launched an innovation support service to support new ideas and products that benefit savers and can potentially provide fuel to fire up the UK’s economic growth.
We want to enable early, open conversations with innovators who are shaping the future of pensions.
Our focus will be on two key areas:
- First, administration and member experience, especially during the decumulation phase, when savers begin to draw on their pensions.
- Second, investment and new scheme models, where fresh thinking can unlock better outcomes.
We will be holding discussion sessions – a chance for innovators to sit down with our experts in the early stages of developing a new idea. These informal conversations can help shape innovation, and how we regulate it.
But alongside informal chats we are also convening bigger events. Earlier this month we held our first ‘hackathon’, a format well known in the tech world, but now also increasingly used by other industries.
It demonstrated just how well we can all work together on some of these big issues.
We’re also teaming up with the FCA to ensure innovators can access both our services without duplication and delay.
And we are supporting emerging models. We already support new concepts like superfunds but we’re going further. Streamlining our processes to help other innovative models take shape.
This is a bold step forward. It’s about creating space for innovation, while keeping savers’ interests at the heart of everything we do.
There is a whole new page on our website that offers more information and ways in which you might get involved. Please do take a look, if this piques your interest.
The data revolution: A strategic asset for the industry
But innovation doesn’t happen in a vacuum.
It starts with strong foundations, and that means improving data quality. This is a top regulatory priority.
The digitisation of information and the subsequent ease and speed by which it can be deployed is creating something of a minor revolution.
Indeed, many of the good outcomes we all want for savers will depend on clear, clean, well-managed data for all types of schemes.
We still have major pensions schemes operating just off excel spreadsheets and one in four schemes with some form of records in paper form and some on microfiche!
We are living through a data revolution; a time when data is reshaping industries, economies, and societies. And pensions must not be left behind.
We launched our Data Strategy recently, and it rests on three pillars:
- Building strong foundations: We’re embedding core data principles and nurturing a new generation of data professionals.
- Expanding the data ecosystem: We’ve launched an internal data marketplace and are connecting with the UK’s National Data Library.
- Focusing on value for savers: Every data initiative is aligned with improving outcomes, using AI and analytics to identify risks and support innovation.
Why does this matter? Because data is no longer a back-office function. It’s a strategic asset. It enables better governance, smarter investment, and faster regulatory response.
Many of you will be involved in preparing for pensions dashboards. These will fly or fail on the quality of the data that builds them.
Being digitally enabled, having good management and control of your data is essential if we are to deliver a system that meets contemporary needs.
We want to work with trustees and the industry to drive the development and adoption of open data standards through the implementation of our Digital and Data strategies.
As part of this work, we will form industry working groups and help market participants to learn from one another and spur on better practices.
We say this having seen the benefits of our own investment in digital and data capabilities. TPR has used AI over the past 12 months to support its regulatory functions and decision-making to better protect savers. This includes detecting pension scams, monitoring market trends, predicting pension scheme health, and managing website feedback.
We know how much more effective this is making us and want the schemes and savers to benefit too.
Conclusion
Let me end with this.
The regulator is no longer just regulating pensions. We are in the process of reshaping the future of retirement in the UK. We are building a system that is data-driven, innovation-friendly, and growth-oriented. A system that works for employers, trustees, and most importantly, for savers.
So, whether you’re a scheme provider, a fintech entrepreneur, a trustee, or a policymaker, let’s work together to build a pensions system that’s not just fit for the future, but one that leads it.
Thank you.
