Pensions will be made safer, better and greener following the creation of new rules, Pensions Minister Guy Opperman has said.
The new Pension Schemes Act will beef up the powers of the Pensions Regulator, introducing the power to issue civil penalties of up to £1 million, alongside new criminal offences.
Bosses who run pension schemes into the ground or plunder pots to line their own pockets will face up to seven years in prison.
The Act also changes requirements around pension scheme funding to improve financial sustainability.
Tom Selby, senior analyst at AJ Bell said: “The Act will place a new emphasis on schemes to consider the climate change impact of the investments they make on behalf of members and publish information for members on how this has been achieved.
“Over the longer-term we expect savers to take a much keener interest in how and where their retirement pots are invested, so there is every chance firms will need to go above and beyond these requirements to satisfy members.”
Pensions dashboards, where people can see all their retirement savings in one place, will also be created.
Mr Opperman said: “This is a historic day for UK pensions and I’m thrilled that after more than 12 months, amidst all the challenges we’ve faced, the Bill has now received Royal Assent.
“This Act makes our pensions safer, better and greener, as we look to build back better from the pandemic.”