Pension Schemes Bill: New Clause 3

**What happened:** On 3 December 2025, the House of Commons voted on New Clause 3 to the Pension Schemes Bill at report stage (the stage where MPs debate and vote on amendments before a Bill proceeds to the House of Lords). The amendment was defeated by 299 votes to 87. The clause was tabled by the Liberal Democrats, who led the Aye vote alongside the Scottish National Party, Plaid Cymru, Reform UK, the Democratic Unionist Party, the Greens, and a handful of independents. Labour voted unanimously against. **Why it matters:** The Pension Schemes Bill is a wide-ranging piece of legislation affecting how occupational pensions are managed, invested, and protected. The debate surrounding this amendment centred on pre-1997 pension indexation: the question of whether pension payments accrued before April 1997 should be increased in line with inflation. This is a long-standing concern for hundreds of thousands of pensioners, particularly those whose former employers, including large multinationals such as Hewlett Packard Enterprise, 3M, ExxonMobil, Goldman Sachs, Chevron, Pfizer, and Atos, have declined to apply voluntary inflation-linked increases for periods of up to 23 years. The Government separately tabled its own amendments (New Clauses 31 to 33) to extend indexation within the Pension Protection Fund and the Financial Assistance Scheme, benefiting over 250,000 members with an average boost of around 400 pounds a year over five years. The opposition amendment sought to go further, pressing for redress beyond the PPF framework. **The politics:** Labour voted solidly against the amendment, reflecting the Government's position that its own new clauses represented the appropriate and balanced response to the indexation issue. The Liberal Democrats, SNP, Plaid Cymru, Reform UK, DUP and Greens all voted in favour, forming a broad but ultimately thin cross-party Aye coalition. Notably, only two Conservatives voted Aye, with 114 absent, meaning the official opposition did not meaningfully contest the amendment despite voicing support for aspects of the Bill. The debate revealed frustration on the Labour backbenches as well, with several Labour MPs making the case for stronger action against solvent private employers refusing to index-link pensions, even as they ultimately backed the Government's position.