Key facts
- Guided Retirement would require pension schemes to provide a default pension for savers approaching retirement, under secondary legislation made through the Pension Schemes Act 2026.
- Around 17 million private sector workers now saving into a pension would get the option, the Department for Work and Pensions said.
- In 2025/26, around 46% of first-time pension pot accesses involved the pot being fully withdrawn, the department said.
- Savers must agree to start receiving payment through the default pension, described as the key consent moment, and remain free to choose another option.
- A second consultation covers draft regulations so Retirement Collective Pension Schemes, which pool risk, can be used as a default.
The UK government opened a consultation on November 3, 2026, on Guided Retirement, a plan to require pension schemes to provide a default pension for savers approaching retirement. Pensions minister Torsten Bell announced the consultation at the Association of British Insurers Long-Term Savings Conference, alongside a second consultation on draft regulations for Retirement Collective Pension Schemes.
The Department for Work and Pensions said around 17 million private sector workers now saving into a pension would get the option, rather than reaching retirement holding only a pot. Most of them save in defined contribution schemes, which leave a pot at the end, while most private sector defined benefit schemes paying a lifetime income have closed over 30 years.
The department cited the withdrawal pattern as the reason for the change: in 2025/26, around 46% of first-time pension pot accesses involved the pot being fully withdrawn. Guided Retirement would be introduced under secondary legislation made through the Pension Schemes Act 2026, and the consultation runs from November 3 to December 22, 2026.
Savers who want a different option will always be free to choose, the department said, so the default is an option rather than an obligation. Under the guiding principles, members will need to agree to start receiving payment through the default pension, described as the key consent moment. The principles say default pensions must provide an income lasting throughout retirement, though schemes could use different phases, such as a flex then fix approach.
Bell said the government was "resurrecting proper pensions for private sectors workers", guaranteeing the option of an income that lasts throughout retirement. Therese Chambers, an executive director at the Financial Conduct Authority, said Guided Retirement "will offer a simpler way to turn savings into income, regardless of which workplace pension people have". Richard Knox, an executive director at the Pensions Regulator, said well-designed default options at retirement "will help people navigate these complex and important financial decisions".
The government's pensions roadmap works back from 2030, saying trustees will have to offer a default guided retirement product, which will also apply to group personal pensions.