Pensions Regulator signs up to Treasury’s action plan to support growth

On March 17, 2025, HM Treasury published a policy paper setting out its action plan for the Government's next steps in ensuring regulators and regulation support economic growth and innovation. The Pensions Regulator has made several pledges to tackle the complexity and burden of pension regulation.

In addition, the Government has committed to reducing uncertainty across the regulatory system and challenging "excessive risk aversion". More specifically, Annex A to the action plan sets out 60 "key regulator pledges" made by regulatory bodies including the Pensions Regulator, the FCA, the PRA, the Information Commissioner's Office and the Environment Agency. To be included in this list, the action plan says that a pledge must have a "tangible effect" on driving growth and investment and be implementable within the next 12 months.

Those made by the Pensions Regulator include:

• Reviewing the capital reserve requirements applying to authorised master trusts, with a view to "safely freeing up millions of pounds for schemes" by the end of 2025/26.
• Developing an innovation framework and criteria with a view to trialling several innovation ideas by autumn 2025.
• Reducing unnecessary regulatory burdens by monitoring the quality and value of regulatory interaction and reviewing its data collection requirements in scheme (and supervisory) returns by the end of March 2026.
• Encouraging schemes to consolidate and invest in productive assets, initially through voluntary disclosure of asset allocation data and in due course by implementing the revised value for money framework due to be enacted in forthcoming legislation.

The Treasury’s view is that over time, billions of pounds of regulatory cost have contributed to the UK economy being less competitive and less attractive for new investment than it could be. It is suggested that the impact of red-tape costs could be as high as 3-4 per cent of GDP, or around £70bn, despite multiple attempts to cut back regulatory burdens.