The Great British Pension Reset – Decoding Reeves’ Reforms
The UK pensions system is undergoing its most significant overhaul since the introduction of automatic enrolment in 2012. Chancellor Rachel Reeves has unveiled several measures aimed at making pensions more growth-focused, streamlined and aligned with the UK’s long-term economic strategy.
The main changes are:
- 5% ‘Back British’ push: Under the voluntary Mansion House Accord, 17 major pension providers have pledged to invest at least 5% of defined contribution (DC) assets into UK private markets by 2030. The government plans to introduce ‘reserve powers’ to enforce this.
- Private assets mandate: The new Pensions Schemes Bill gives regulators powers to direct how default funds of large DC schemes allocate capital, likely pushing them to invest in private equity, property and infrastructure.
- £25bn ‘megafunds’ target: Multi-employer DC schemes must reach £25 billion in assets by 2030 or 2035. This incentivises the consolidation of schemes, with the additional benefit of helping them scale up for more sophisticated investments.
- Small pot reform: To fix fragmentation, the bill will enable the merging of DC pension pots (from previous jobs for example), potentially consolidating 13 million small pots and saving £225 million annually.
- Default drawdown options: DC schemes will be required to offer default drawdown schemes for those approaching retirement, going some way to remedy the confusion created by George Osborne’s 2015 pension freedoms.
The implications for the legal industry are wide ranging and include:
- Fiduciary duty challenges: Legal advice will be key as schemes navigate the tension between state-backed investment directives and fiduciary obligations to members.
- Governance and compliance: Trustees and providers will need counsel on implementing default pathways, complying with new reporting standards and managing the risk of not complying with the government’s ‘reserve powers’.
- Consolidation and M&A work: smaller schemes will face pressure to merge, generating work around due diligence, structuring and transfer of liabilities.
- Commercial deals: as pension capital flows into private markets, lawyers will be central to structuring investments in infrastructure and real assets.
In the coming months, it will be important to watch whether the 5% commitment to British assets becomes mandatory, and whether smaller schemes consolidate or get squeezed out. Nevertheless, the success of these reforms will ultimately hinge on how pension schemes choose to reconcile fiduciary duty with state-led investment pressure.
Quick Reads ⌚️
UK Spending Review – A Commercial Awareness Breakdown
UK Chancellor Rachel Reeves has delivered her first spending review, setting out day-to-day departmental budgets until 2029 and capital spending until 2030. Described as a plan for “national renewal,” it includes a £113bn capital investment spree and major increases of £29bn for the NHS and £2bn for schools. Real-terms cuts will hit departments like the Home Office, Foreign Office, and Defra. The infrastructure-heavy review focuses on northern rail, nuclear power, and affordable housing, and while Reeves called it a break from austerity, the IFS warned the boost is frontloaded, with tighter conditions expected post-2026.
For the legal industry, implications range widely, but include:
- Increased advisory work around infrastructure, planning and regulatory compliance. Additionally, local government funding injections could spark activity in construction and redevelopment contracts.
- Tighter budgets in areas like environment and foreign aid may affect funding access for public sector clients, damaging business here.
- Increased spending on research & development, tech and AI will likely benefit commercial firms in intellectual property and venture deals.
Watch: how this long-term reshaping of public capital impacts regional markets and public investment in transport, housing and digital infrastructure.
Buy Now, Pay Later’s Wild West days are numbered 🌵
On the 19th of May, the government unveiled a raft of measures to rein in what it sees as the ‘wild west’ of unsecured short-term credit, where consumers currently lack basic protections. This draft legislation will require buy now, pay later (BNPL) providers to be FCA authorised and carry out credit checks, with more details set to emerge soon. These changes come off the back of concerns in the US regarding BNPL, after it emerged that more than 60% of Coachella tickets had been bought using these services. This raises questions about predatory lending practices, credit bubbles and a cultural shift towards normalising debt for lifestyle purchases.
What impact could this have on the legal industry, given its relationship with financial compliance, consumer credit regulation and fintech advisory work?
Firms advising fintechs, lenders, or e-commerce platforms will need to prepare clients for FCA regulation and onboarding processes. Additionally, financial regulation teams may see increased demand as BNPL firms seek authorisation or restructure their products to comply. Finally, disputes teams could see early cases as consumers begin to challenge unfair terms or lending practices under the new regime.
Herbert Smith Freehills Cracks America 🇺🇸
Herbert Smith Freehills has officially merged with US firm Kramer Levin, creating a global powerhouse with more than 2,700 lawyers and revenues exceeding $2 billion. The deal strengthens HSF’s standing in the US, giving it a strong presence in major American cities where Kramer Levin previously dominated in litigation, restructuring, and private equity.
This transatlantic merger comes with a single profit pool, integrated leadership, and plans for further expansion into areas such as technology, real estate, and financial regulation. For the legal industry, the tie-up signals increasing urgency for UK-headquartered firms to compete at scale in the US market, where US firms continue to dominate revenue tables. Mid-tier firms may feel pressure to pursue cross-border strategies or risk being left behind.
For lawyers, this will open the door to more secondment opportunities, integrated cross-border deal teams, and changing talent flows across regions. It also adds to a growing trend of international consolidation as a way to access the lucrative US legal market without starting from the ground up.
What to Watch 👀
- Will Pension funds fold, merge or grow?
- Will Labour’s capital spending spree spark regional demand for legal and professional services in the Midlands and the North?
- How could global law firm mergers reshape the legal market?
- Is the BNPL crackdown a test case for broader fintech reform and regulation?
Data in the Deal – The LegalTech digest 💡
Definely Secures $30M to Scale Smart Drafting Globally
UK legal-tech company Definely, founded by former Freshfields lawyers, has secured $30 million in Series B funding, led by Octopus Ventures, with backing from Insight Partners and Cornerstone VC. Definely’s core product is a Microsoft Word plugin that lets lawyers draft, review and cross-reference contracts without switching screens. It has gained traction among major firms like Allen & Overy and clients including the UK Government Legal Department. The fresh capital will fund AI development and global expansion into North America, Australia and the Gulf.
The boost underscores growing investor appetite for targeted legal tech that enhances existing workflows rather than replaces them. For firms, this means more vendor assessments, licensing deals and integration challenges. As contract drafting becomes faster and smarter, legal teams may need to rethink how they train juniors, delegate work, and protect sensitive data. Expect rival platforms to accelerate innovation as they compete with Definely’s momentum.
Thank you for reading.
The Docket & Deal Team
The Docket & Deal 
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