Getting a good return on the money you put aside in your pension is crucial if you want to enjoy a comfortable retirement.

And new rules from the Government should make that just a little bit easier.

The Department for Work & Pensions (DWP) has published new draft rules, which aim to force defined contribution pension schemes to prove they offer value to savers or else face being wound up.

Trustees of pension schemes will be expected to demonstrate to the regulator that they deliver good value to members.

And if they can’t do that, they have two options ‒ they either need to set out precisely how they plan to improve and ensure members get a better return, or else they will have to wind up the scheme and consolidate with another scheme.

Why less choice may be a good thing

According to The Pensions Regulator of the roughly 3,000 defined contribution schemes currently in the market, around 2,150 have 100 members of less.

Of these 1,300 have fewer than 12 members, which is not really sustainable.

The DWP hasn’t hidden the fact that it wants to see more consolidation among these smaller pension schemes.

In its latest publication, it said that it saw consolidation as the most effective way for pension savers to get best value from their pension schemes, while they would also mean savers could get access to a more diverse range of investment products and strategies.

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