Is your pension offering value for money? New DWP league table plans will let you find out

Millions of workers will soon be able to better tell if their workplace pension is delivering good value, under new government plans aimed at improving retirement savings.

The reforms will mean savers will be able to see league tables showing how their workplace pension schemes compare to others based on charges, returns and quality of service.

The idea is that you will be able to compare and better understand how your pension works to get better returns savings - and ultimately more money for retirement.

The changes could make a huge difference.

At the moment, the difference between the best and worst performers could cost a saver with a £10,000 pot over £5,000 across just five years, according to the government.

How will pensions be changing?

Under the government's plans, workplace pension providers will have to assess and publish whether they offer good value for money.

Schemes will be judged across three key 'value for money' areas:

• Investment performance – how well pension savings have grown over time.

• Costs and charges – how much members pay in fees.

• Quality of service – including customer support, communications and retirement services.

The aim is to help employers, trustees and regulators compare pension schemes more easily and identify those that are delivering the best outcomes.

When will the changes happen?

The government is now consulting on reforms and implementation planning continues - getting views from the industry.

It is expected that in 2028 large workplace pension schemes, including Master Trusts and large employer schemes, will begin publishing Value for Money assessments.

This will allow people to start making better judgements on their retirement savings.

By 2029 all schemes are hoped to be publishing assessments.

What other changes are happening in the pension reforms?

As well as the value for money framework, the government is also planning to reduce the number of small pension pots people build up as they change jobs.

And encourage consolidation into fewer, larger pension schemes.

Workers will also be able to choose from default retirement income options to make it easier for people to turn their pension savings into an income when they retire.

Ministers believe these wider reforms could improve retirement outcomes while making the pensions system easier to navigate.

Torsten Bell, minister for pensions, said:  "Our task is to level up the quality of the pensions private sector workers receive, towards those in the public sector.

"For the first time, we’re making sure savers can see whether they are getting a good deal from the pension they’re saving into. 

"We can’t have people working hard to earn the money they save towards retirement, only to have those funds sitting in schemes that aren’t working just as hard on their behalf."

How can I check whether my workplace pension offers good value?

Even before the new framework is introduced, it's worth reviewing your pension regularly.

Read your annual pension statement and check how your pension fund has performed.

Look at the charges you're paying and review where your money is invested.

Check what retirement guidance and support your provider offers.

If you've had several jobs, you may also have multiple workplace pensions that could be worth reviewing and consolidating together.