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DC schemes
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Pension Schemes Bill 2025 – published 5 June 2025. Royal Assent anticipated 2026.
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The Bill sets out provisions for a new value for money framework (VfM) for occupational pension schemes. Standardised data required to allow scheme comparison and VfM assessments will be detailed in regulations.
Response to the consultation on DC “megafund” consolidation (following the Mansion House proposals) was published on May 29, 2025. Default funds in master trusts and GPPs will be required to have £25bn in assets under management by 2030.
Additional changes in the Bill include consolidation of small, dormant (under £1,000) DC pots and new trustee obligations relating to decumulation options for members.
The Final Report on the Pensions Investment Review was also published on May 29, 2025. A power is reserved in the Bill for mandation of investment allocation if the 5 per cent UK investments not achieved voluntarily.
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| Collective DC schemes |
Anticipated to be in force July 2026. |
Regulations have been laid allowing creation of CDC schemes for multiple unconnected employers. Envisaged to be in force 2026. The Government has also consulted on the possibility of allowing trustees to choose a “retirement only CDC” scheme to satisfy the new duty under the Pension Schemes Bill of providing decumulation options to members. Consultation closed December 4, 2025. |
| Virgin Media issue |
Pension Schemes Bill due to be enacted 2026. |
The Bill provides for actuaries to give retrospective certification for amendments to contracted-out benefits where historic evidence cannot be found. |
| Legislative framework for DB superfunds |
Pension Schemes Bill due to be enacted 2026. Regulations expected 2027, with measures in force 2028.
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The Government sees superfunds as a route to greater pensions investment in UK illiquid assets.
The Bill sets out a Statutory framework for DB superfunds. This will replace the Regulator’s interim authorisation regime.
The DWP had said it would establish a public DB consolidator by 2026, although the relevant legislation is not included in the Bill. Consultation on features for a possible scheme closed on April 19, 2024.
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Relaxation on DB surplus repayment
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Pension Schemes Bill due to be in force 2026, with draft regulations also anticipated. |
Response to the consultation on Options for DB schemes was published on May 29, 2025. Draft legislation is included in the Pensions Schemes Bill.
Trustees to have a statutory power to amend scheme rules if necessary. The Bill repeals the requirement to have passed a resolution before April 2016 to retain the power to distribute ongoing surplus.
Consultation response states funding level for surplus repayment to be low-dependency rather than full buy-out. Detail to follow in regulations.
The tax charge on repaying DB scheme surplus to employers is now 25 per cent. The consultation response indicated that the Government will keep the general tax position under review.
In the Budget on November 26, 2025, the Chancellor announced a Government intention to “enable well-funded DB schemes to pay surplus funds directly to scheme members over the normal minimum pension age from April 2027”. Further detail awaited.
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| Pension Protection Fund (PPF) levy consultation |
2025/26
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The Pension Schemes Bill includes provisions allowing the PPF to raise a zero levy when funding allows. Zero PPF levy charged 2025/26. Final decision on PPF levy for 2026/27 to be taken once Bill makes its way through Parliament.
Budget announced CPI-linked increases on PPF and FAS compensation in respect of pre-1997 service, capped at 2.5 per cent per annum, from January 2027.
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| Pensions and inheritance tax |
April 6, 2027
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Unused DC funds and death benefits to be brought within scope of inheritance tax (IHT). Current consultation closed January 22, 2025. Personal Representatives will be able to direct scheme administrators to withhold payment of up to 50 per cent of taxable benefits on death for up to 15 months. The second reading of the Finance Bill 2026 is on December 16, 2025. |
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Pensions Dashboards
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From April 2025 to October 2026
DWP guidance refers to staged on-boarding of schemes, starting with the largest schemes.
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Staging deadlines are set out in guidance. All schemes with 100 or more relevant members at the scheme year end between April 1, 2023, and March 31, 2024, must be connected by October 31, 2026.
The Regulator expects trustees to take heed of the guidance, identify staging date and develop action plan for getting data ready for dashboard. Discuss with administrators and service providers.
Final dashboard standards have now been published by the Pensions Dashboard Programme.
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| DB scheme funding: changes to requirements |
Regime applies to scheme valuations on and from September 22, 2024. |
Consider scheme’s long-term objective and journey plan and discuss with employers. Regulator’s revised DB funding code in force from November 12, 2024.
Funding and investment strategy to be in place 15 months following the first valuation after September 22, 2024.
The Regulator’s new DB Funding Code came into force on November 12, 2024.
The Regulator’s new covenant guidance has now been published. Its Annual Funding Statement for 2025 (the first under the new regime) was published in April.
Templates for the statement of strategy are now available.
The Fast Track submission tests and conditions were published on November 20, 2024.
Digital submission portal for scheme valuations now available via the Regulator’s website.
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GMP conversion
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Pension Schemes (Conversion of GMPs) Act 2022: Royal Assent granted April 28, 2022.
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Not yet in force. No indication of commencement date.
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Reforms to auto-enrolment – lower minimum age to 18 and remove lower earnings limit.
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2025/26?
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The Pensions (Extension of Automatic Enrolment) (No.2) Act 2023 received Royal Assent on September 18, 2023. The relevant provisions are not yet in force. Commencement not a Government priority.
Part 2 of the Government’s Pensions Investment Review (expected to include the scope of auto-enrolment) is due “in the coming months”.
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Over-the-counter derivative contracts under EMIR – long-term approach.
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Before June 18, 2025
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HMT has decided that the exemption for pension funds from the EMIR clearing obligations will be maintained in the longer term. Draft regulations were laid on March 17, 2025, to ensure the exemption does not expire on June 18, 2025.
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First Government top-up amounts to be paid to low earners in schemes using net pay arrangements
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Calculated on contributions made in tax year 2024/25, but top-ups to be paid in tax year 2026/27.
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In force. Legislation included in Finance (No 2) Act 2023, amending section 193A Finance Act 2004.
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Rise in normal minimum pension age from 55 to 57
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April 6, 2028
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Legislation (Finance Act 2022) in force from February 24, 2022.
Schemes should check to which members the new protected pension age (of 55) will continue to apply.
Formulate member communications strategy.
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| Salary sacrifice |
April 6, 2029 |
Proposed limit of £2,000 on the amount of any salary sacrifice for pension contributions that will be exempt from National Insurance Contributions. Both employer and employee NICs payable on any excess. |
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Notifiable events: changes to current regime for DB schemes
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Final regulations still awaited. Significant uncertainty remains about the progress of changes to the regime.
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Although there has been no formal confirmation yet from the DWP, there are indications that the Government and Regulators do not intend to progress with the proposed changes to the notifiable events framework.
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Second review of State Pension Age (SPA) due in first two years of this parliament.
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2025? |
SPA is currently 66, with two further increases set out in legislation: a gradual rise to 67 for those born on or after April 1960 and a gradual rise to 68 between 2044 and 2046 for those born after April 1977.
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State pension top-ups
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April 5, 2025 |
Further extension to deadline to April 5, 2025, for individuals to complete their post-April 2006 NIC record.
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RPI reform and switch to CPIH
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2030 |
The judicial review of this decision was dismissed so Trustees should take advice on implications for DB schemes and consider what preparatory steps may be required. No appeal has been sought, so the judgment is final and no further challenge is possible.
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