Proposed UK Pension Reform: What It Means for Businesses and Individuals, and Lessons Learned from France’s approach
Pensions are changing in both the UK and France. In the UK, the government led by Prime Minister Andy Burnham is pursuing a programme designed to improve retirement incomes, change how workplace pension schemes invest money and make the system more sustainable over the longer term.
France is taking a different approach. Its recent changes have focused much more directly on the age at which people can retire and the number of years they must contribute.
For individuals and businesses, these changes matter because pensions affect payroll costs, employee benefits, retirement planning, recruitment and long-term financial planning.
What is changing in the UK?
The UK Government's pension programme has several parts.
One major change is the Pension Schemes Act 2026, which became law in April 2026. The Government says the legislation is intended to improve pension outcomes for millions of savers by encouraging larger schemes, better investment performance and greater efficiency.
A central part of the reform is consolidation. The Government believes that having fewer, larger defined contribution pension schemes can provide economies of scale and allow pension funds to invest in a wider range of assets.
The Government's Pensions Investment Review explained that larger schemes can potentially access investments such as infrastructure and growing businesses that may be more difficult for smaller schemes to access. The Government has also said that consolidation should allow schemes to focus more on investment performance and value for members rather than simply looking for the lowest charges.
Another important change concerns value for money. From 2028, larger schemes will begin publishing assessments covering investment performance, costs and charges, and quality of service. The Government intends to extend the framework to all workplace pension schemes from 2029.
There are also plans to deal with small dormant pension pots. The Pension Schemes Act creates powers to move certain small dormant automatic-enrolment pension pots into consolidator arrangements. The legislation defines a small pot for this purpose as one worth £1,000 or less, subject to the detailed regulations.
For employees who change jobs regularly, this could eventually make it easier to avoid accumulating numerous small pension pots with different providers.
The State Pension is also changing
The State Pension is being treated separately from workplace pension investment reforms.
The Government has confirmed that the existing Triple Lock will continue until April 2030. Under the current arrangement, the State Pension increases by whichever is highest of average earnings growth, inflation or 2.5%.
From April 2030, the Government plans to change the mechanism. The State Pension will continue to rise by at least inflation or 2.5%, with an additional link to earnings intended to maintain its value relative to average earnings over time. The Government says this means pensioners will continue to see their State Pension rise as the economy grows.
This is also connected to the Government's plans for a new National Care Service. The Government estimates that changing the Triple Lock could reduce State Pension spending by £15 billion a year by the end of the 2030s, rising to £50 billion a year by 2050.
For individuals, this makes retirement planning more complicated because the State Pension remains an important part of retirement income, but private and workplace pensions may become increasingly important in determining someone's overall standard of living.
How does France compare?
France has taken a noticeably different route.
The major French pension reform introduced in 2023 planned to increase the legal retirement age progressively towards 64 and increase the contribution period needed for a full-rate pension.
However, the French position has changed again.
Under France's 2026 Social Security Financing Law, the increase in the legal retirement age and the increase in the required contribution period have been suspended until 2028 for certain generations. From September 2026, the legal retirement age varies according to year of birth, with ages for some affected generations between 62 years and 9 months and 63 years and 9 months. This means French retirement planning is currently going through another period of change.
France's approach is more directly concerned with the question: “At what age can people retire, and how long must they contribute?” The UK's reforms are currently more focused on another question: “How can pension savings be invested and managed so that people receive better retirement outcomes?”
There is some overlap. Both countries are dealing with the long-term cost of supporting an ageing population and the need to make pension systems financially sustainable. But the policy tools are different.
What does this mean for businesses?
For UK employers, pension reform does not simply mean keeping an eye on the percentage deducted from employees' wages.
Employers should review their workplace pension arrangements periodically and consider whether their scheme remains suitable as the new value-for-money framework develops.
The Government's reforms could eventually mean greater consolidation among pension providers. Businesses may therefore find that their existing pension provider changes its structure, investment arrangements or relationship with employers.
Employers should also keep good records of pension contributions and make sure payroll information is accurate. Pension administration becomes particularly important when employees join, leave, change their working hours or have more than one pension arrangement.
For businesses with senior employees, pension planning can also form part of wider remuneration planning. Employer pension contributions may be considered alongside salary, bonuses and other benefits.
French businesses face a different set of issues. Retirement age and contribution rules can directly affect workforce planning. Changes to retirement timing can influence when experienced employees leave, how long they remain employed and the cost of social contributions.
French employers must also deal with the country's wider system of social and retirement contributions. The French public administration provides detailed information on the social contributions applying to employers and company directors.
What does this mean for individuals?
For individuals, the main lesson is not to rely entirely on the State Pension.
The Government's reforms may improve the efficiency and investment potential of workplace pensions, but the amount someone eventually receives will still depend on factors such as contributions, investment performance, charges, employment history and the age at which they access their pension.
Someone who changes jobs several times should also keep track of old pension schemes. The planned consolidation of small dormant pots could eventually make this easier, but individuals should not assume that old pensions will automatically be combined immediately.
People approaching retirement should obtain an up-to-date picture of their State Pension entitlement and private pension savings before making major decisions.
In France, individuals similarly need to keep track of their contribution history because the age at which someone can retire and the number of contribution periods required can depend on their birth year and circumstances.
How can ATN Partnership help you?
Pension reform can look complicated, particularly for a small business owner who already has payroll, tax, VAT and bookkeeping responsibilities.
ATN Partnership can provide practical support by reviewing an employer's current pension arrangements, checking payroll pension deductions and employer contributions, and helping business owners understand the financial effect of changes.
For business owners, pension planning can also be considered alongside company profits, salary, dividends and personal retirement objectives. The right approach will depend on the individual's circumstances and should take account of tax and pension rules at the time.
For employees and self-employed clients, ATN Partnership can help bring together the different parts of the financial picture. This may include reviewing pension contributions, business income, salary, dividends and retirement objectives.
An accountant should not replace a regulated financial adviser when investment advice is required. However, an accountant, like ATN Partnership, can help identify where pension and tax planning need to be considered together and can refer clients to an appropriate regulated adviser where necessary.
Pension reform is ultimately about long-term planning. The sooner businesses and individuals understand where they stand, the more options they are likely to have when the rules change again.
For further guidance on this or other topics, contact ATN Partnership.