Millions of local government workers are set to benefit from the new reforms to the Local Government Pension Scheme (LGPS) thanks to legislation being laid today, (21 May).
New regulations set to come into force next month will introduce new requirements for how pension funds are managed and invested in a boost for frontline council workers and growth.
These changes finalise the rules, so that pension funds can work together, invest more in local communities, and ensure people’s retirement savings are properly looked after.
The secondary legislation laid today, which will come into force on 30 June, will mark a significant milestone in the Fit for the Future reforms to the LGPS, ensuring every pound saved delivers stronger returns while supporting investment in the economy.
Minister for Local Government and Homelessness, Alison McGovern said
Those working on the front line in our local communities are unsung heroes, and they deserve a pension scheme that works as hard as they do.
These reforms will do exactly that – providing better returns, putting money back into local communities, and driving economic growth that people can actually feel.
Minister for Pensions, Torsten Bell, said
The reforms are a major milestone that will release the untapped potential of the local government pension scheme, ensuring its £400 billion of assets are managed effectively on behalf of members and driving economic growth across the country.
This change follows on from a consultation that was launched in November 2025.
Since 2015, LGPS funds have made strong progress on pooling – where pension funds combine their assets to make larger, more effective investments. Already, 80% of assets are pooled, achieving £870 million in savings.
The new regulations build on this by making pooling a legal requirement for the first time, ensuring every fund meets the same high standards.
Following consultation feedback, the government has also adjusted implementation timescales to reflect what is practically achievable, giving funds more time to transfer assets to pool management, publish investment strategies, and fill new governance roles.
Together, these reforms represent a major step forward in building a pension system that delivers better outcomes for workers and communities across England and Wales.