The House of Lords has added an amendment to the Pension Schemes Bill (PSB) that would require the Secretary of State for Work and Pensions to issue guidance on pension scheme trustees’ investment duties.

Under the amendment, the Secretary of State would need to issue guidance explaining regulations relating to section 35(4) (statement of investment principles) and 36(1) (choosing investments).

In particular, the guidance may explain the meaning of ‘financially material considerations’, including environmental, social, and governance considerations, and ‘best interests of members’.

The first guidance issued under this section must be published within 12 months of the law coming into force.

“The government clearly wants to move this topic along at pace,” said LCP research partner, David Everett.

“We already knew that there will be a full consultation on the draft guidance later in the spring. It now seems that it may be published in final form by around this time next year, if not sooner.”

LCP investment team principal, Sapna Patel, added: “We welcome guidance on how trustees could take into account financially material considerations and the best interests of members.

“We hope that when we see this guidance it will provide trustees with more clarity and reassurance on possible actions available to them in an area that has been interpreted in different ways.”

The PSB is set to enter the House of Lords’ report stage on 16 March 2026, and has completed its committee stage.

The Lords have added several amendments to the bill and have voiced concerns over multiple aspects, with House of Lords member and Cushon advisory board member, Ros Altmann, warning that measures included in the bill would give ministers “unlimited powers” to dictate pension investments.

She said that the House of Lords would try to amend the PSB to either remove mandatory investment powers altogether, or water them down to Mansion House Accord limits.

The government has also been defeated in the House of Lords over plans to limit pension salary sacrifice to £2,000 a year in 2029, losing five amendment votes on the National Insurance Contributions (Employer Pensions Contributions) Bill.

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