The Pension Schemes Bill 25-26 is the first legislation of this government’s landmark programme of pension reform. Its core aim is to boost investment in the UK. However, the Bill (and broader reforms) currently overlook the biggest threat to pension savers and the UK economy: the financial impacts of climate change and nature loss.
UK pension funds are significant investors in fossil fuel assets. These exposures increase the risk of stranded assets, climate-driven economic shocks, and inflation in essential goods – all of which directly undermine the value of pension pots and the stability of the wider financial system.
Alongside unions and civil society organisations in the Better Pensions Coalition, we are advocating for an amendment which will require pension funds to exclude companies with significant exposure to thermal coal from their investments. The amendment also introduces a “review and ratchet” process to regularly evaluate extending the restrictions to other areas of fossil fuel finance in future. This briefing urges Peers to speak in support of the amendment at the Committee stage of the Bill starting on 12 January 2026.
