Will Value for Money assessments change how advisers compare pension providers?

What happened?

The FCA, Department for Work and Pensions (DWP) and The Pensions Regulator (TPR) have proposed a new Value for Money (VFM) Framework for workplace pensions. The consultation, open until 15 September 2026, sets out plans for standardised assessments, common performance metrics, public disclosures and industry benchmarking.

The objective is to make it easier for pension savers, advisers, governance bodies and employers to compare workplace pension schemes and understand the value they deliver.

Why does it matter?

The proposals could significantly change how pension schemes are assessed and compared.

Historically, assessments have relied on provider research, due diligence, governance reviews and performance analysis, often using different methodologies. The VFM Framework aims to create a more consistent and transparent approach, potentially introducing a central database and publicly available assessment outcomes.

This means firms may need to support decisions with both internal research and externally published value assessments.

Who is affected?

The proposals are likely to impact pension providers, pension advisers, employee benefit consultants, governance bodies, employers and workplace pension savers. Providers may face greater scrutiny over the value they deliver, while advisers and consultants may need to incorporate new VFM assessments into provider research, suitability reviews and ongoing monitoring. Governance committees and employers are also likely to have access to more transparent comparative data when reviewing pension arrangements.

Key risks

Increased scrutiny of provider selection decisions.
Difficulty justifying recommendations where preferred providers perform poorly against published benchmarks.
Greater expectations around documenting governance and suitability decisions.
Potential regulatory intervention for schemes unable to demonstrate sufficient value.
Market and reputational pressures resulting from publicly available assessment results.
Challenges integrating VFM data into existing research and monitoring frameworks.

Actions to take

Firms should consider:

Reviewing provider research methodologies.
Assessing how VFM assessments will be incorporated into suitability and governance processes.
Updating ongoing monitoring and benchmarking frameworks.
Strengthening documentation supporting provider recommendations.
Preparing governance committees and decision-makers for increased transparency.
Establishing clear processes for challenging and responding to poor value indicators.

Wider implications

While positioned as a pensions initiative, the VFM Framework reflects a broader regulatory trend towards evidence-based decision-making and accountability.

The proposals place greater emphasis on demonstrating value, challenging outcomes and evidencing why decisions have been made. As transparency increases, firms may face heightened expectations to explain how value is assessed and monitored on an ongoing basis.

The framework could ultimately influence governance, oversight and suitability standards across the pensions market.

Recommendations

Advisers and consultants may want to begin reviewing governance arrangements, provider research methodologies and suitability frameworks before the first assessments are published. The proposed framework is likely to place greater emphasis on firms’ ability to explain how value is assessed, challenged, and evidenced as part of everyday decision-making processes.

TCC supports pension providers and advisers with regulatory assurance, governance reviews, Consumer Duty assessments and monitoring frameworks. Our specialists help firms assess regulatory change, strengthen oversight arrangements and build the evidence needed to demonstrate value, suitability and good customer outcomes.

Supporting sources

CP26/25: The Value for Money Framework: consultation

Frequently asked questions

What is the FCA’s proposed Value for Money Framework?

The proposed Value for Money Framework (VFM) is designed to create a more consistent approach to assessing workplace pension schemes using common metrics covering investment performance, service quality, costs and charges.

Why is the FCA introducing a Value for Money Framework?

The FCA, DWP and TPR want to support a significant shift in how the workplace pensions market operates and competes, with greater emphasis on the value delivered to pension savers rather than charges alone.

What could the Value for Money framework mean for advisers?

Advisers and employee benefit consultants may need to incorporate Value for Money Framework (VFM) assessments into provider research, suitability reviews, governance processes and ongoing monitoring activities.

How will value be assessed under the Value for Money Framework framework?

The proposals include assessment of investment performance, costs, charges and service quality, supported by standardised metrics and industry comparators.

Could some pension schemes be forced to consolidate?

The proposals include the possibility of regulatory intervention and consolidation where schemes cannot demonstrate that they are delivering sufficient value to members.