Thirty Years On: Has the Pensions Industry Become Too Expensive to Govern?

The collapse of Robert Maxwell’s business empire in the early 1990s remains one of the defining moments in the history of the UK pensions industry. More than simply a corporate scandal, it exposed deep weaknesses in pension governance and fundamentally changed how schemes are regulated and managed.

When investigations uncovered that hundreds of millions of pounds had been misappropriated from the Mirror Group pension funds, public confidence in occupational pensions was badly shaken. The response from government, regulators, trustees, and advisers was both swift and understandable. Protections were strengthened. Oversight increased. Governance standards rose significantly.

Much of that change was necessary.

The pensions industry today is unquestionably more robust, transparent, and accountable than it was thirty years ago. Trustees are better informed. Member protections are stronger. Regulatory powers are more effective. Governance standards are considerably higher.

But the cumulative effect of decades of reform has also created something else: an increasingly complex and expensive advisory ecosystem.

Today, pension schemes operate within a framework shaped not only by pensions legislation, but also by trust law, financial services regulation, tax law, data protection requirements, equality legislation, ESG expectations, cyber oversight, anti-scam controls, and ever-expanding governance obligations. Beneath this sits a constant flow of codes, guidance, consultations, disclosure requirements, reporting standards, and evolving regulatory expectation.

The result is not simply more regulation. It is a permanent state of interpretation.

For trustees and employers, particularly within defined benefit provision, this has driven growing reliance on external support. Modern governance cycles increasingly involve actuarial advice, legal review, investment consultancy, covenant assessment, compliance oversight, ESG reporting, cyber assurance, member communications, administration audits, data reviews, trustee training, and regulatory engagement.

Individually, many of these activities are entirely justified.

Collectively, however, they create a substantial and often permanent cost burden.

In many cases, schemes now spend significant time and money evidencing governance rather than necessarily improving member outcomes. Smaller schemes can feel this particularly acutely, where fixed advisory and compliance costs consume a disproportionate share of resources.

The challenge is no longer simply whether regulation is necessary. It is whether the cumulative complexity surrounding regulation is itself beginning to undermine value.

Over time, the industry has understandably become increasingly cautious. Advisers face growing professional indemnity exposure and regulatory scrutiny. Trustees carry expanding personal responsibilities. Employers must balance pension obligations alongside broader commercial pressures. The natural consequence is more process, more documentation, more review, and more specialist involvement.

At times, the industry risks creating a framework where schemes spend more time evidencing governance than delivering meaningful value to members.

This is not an argument against regulation. The lessons from Maxwell, BHS, British Steel, pension liberation fraud, personal pension mis-selling, and Equitable Life remain important and should never be forgotten.

But there is an increasing need for proportionality, practicality, and commercially aware governance support.

Not every scheme requires a vast ecosystem of advisers operating in parallel. Many trustees simply need experienced, pragmatic support capable of cutting through complexity, strengthening oversight, and helping schemes focus on what really matters.

That is particularly true for smaller and medium-sized schemes, where governance expectations increasingly resemble those applied to much larger arrangements, despite vastly different resources and budgets.

The future challenge for the pensions industry may therefore be less about adding further layers of regulation and more about delivering smarter, more proportionate oversight—without compromising member protection.

Because ultimately, every pound spent navigating bureaucracy is a pound unavailable for delivering value to members.

And while trust must always remain at the centre of pensions, sustainability matters too.