Pensions Bulletin 2026/13

Pension Schemes Bill completes its passage through the Lords 

The Pension Schemes Bill had its Third Reading in the House of Lords on 26 March 2026, with all eight amendments, each of which were minor in nature, accepted into the Bill. 

During the debate concern was expressed by a cross-bencher at the House of Lords’ earlier rejection of the Government’s proposed statutory investment guidance clause (see Pensions Bulletin 2026/12). In response, Baroness Sherlock for the Government said that the Government will press ahead with its work in this area, and the technical working group whose launch the Department for Work and Pensions had announced in March 2026 to the press will continue to play a central role in helping government develop high-quality guidance and ensuring it is workable, proportionate and valuable to schemes. She promised further updates in due course. The group is chaired by Sir Robin Knowles, a High Court judge and has 13 pensions and investment industry experts on board. 

The Bill now moves to the House of Commons that will consider the numerous amendments made by the House of Lords and no doubt seek to overturn many of them. However, due to a technicality, the Commons is not able to reinstate the statutory investment guidance clause at this late stage as it was a defeated amendment introduced in the House of Lords. 

Commons consideration of the Lords’ amendments is currently scheduled for 15 April 2026 after which we expect it will return to the House of Lords in potentially the first stage of ping-pong. 

Parliament finally agrees the pension salary sacrifice Bill 

The National Insurance Contributions (Employer Pensions Contributions) Bill completed its Parliamentary stages on 25 March 2026 when the House of Lords bent to the will of the Commons which on 23 March 2026 had overturned all the amendments put through by the Lords (see Pensions Bulletin 2026/12). It now awaits Royal Assent which is expected soon after the Easter recess. 

The now agreed Bill is as originally conceived by the Government (see Pensions Bulletin 2025/50). Once Royal Assent takes place, all that will be needed is for the Treasury to lay regulations that will apply an employer and employee National Insurance contributions charge where employer pension contributions that exceed £2,000 pa are made via salary sacrifice arrangements. However, this will only operate from the 2029/30 tax year and so it may be some time before these regulations are made. 

Pensions Regulator issues its Virgin Media guidance 

The Pensions Regulator has issued its promised guidance on the remediation provisions within the Pension Schemes Bill that will enable formerly contracted out pension schemes facing benefit uncertainty as a result of the Virgin Media case to potentially resolve these uncertainties.

Addressed to trustees, the guidance talks about their role and responsibilities in this area, which includes the need to seek advice and information from their legal adviser, potentially from their scheme actuary and from their administrator.

Much of the guidance sets out in plain English what the remediation provisions are and how they are intended to operate, with some useful pointers on the role of the scheme actuary, the information they may require and what to do if they cannot give the confirmation requested. There are also some additional points which include the following:

• If the trustees decide not to proceed with the remediation work immediately, they should ensure that document retention policies will not cause the destruction of relevant records until the matter can be resolved.
• After Royal Assent is given, trustees may wish to prepare a reactive response in relation to any remediation work being considered, in order to manage member queries, and update this response once any such work is completed.
• Trustees do not need to report their remediation actions to the Pensions Regulator as it has no statutory functions in relation to such remediation. Furthermore, if it is established that there had been a failure to obtain a confirmation at the time the rule change was made, but the matter can now be resolved through the remediation process, the now historic failure is very unlikely to be materially significant to the Regulator now in carrying out any of its functions.

Pensions Regulator pushes for smaller DC schemes to exit the market

The Pensions Regulator has published new consolidation guidance, aimed at trustees of smaller DC schemes, for whom, the Regulator says, a master trust solution may offer long-term value when taking into account the cost of future compliance, the administrative burden of new governance requirements and the potential consequences of breaches. It has also refreshed its winding up guidance which is intended to support trustees considering this route. The Regulator says that although there is no official definition, for the purposes of its consolidation guidance it has defined “smaller DC schemes” as those with fewer than 5,000 members.

Both guidance documents have been launched by means of a blog entitled “DC scheme consolidation: why trustees must take action now” in which Kim Goodall-Brown, Director of DC and Master Trust Supervision at the Regulator, uses figures from the recent DC landscape analysis (see Pensions Bulletin 2026/11), and the many new legal duties that the Pension Schemes Bill will impose on DC schemes, to suggest that not only should all DC trustees start taking action now, but that difficult decisions lie ahead for trustees of smaller DC schemes.

Pensions Regulator calls on trustees to check performance-based fees advice

The Pensions Regulator has called on trustees to check that any advice they receive on performance-based fees should take into account DWP’s statutory guidance, and consider whether any performance-based fee structures meet the requirements for “specified performance-based fees”. This follows a recent market engagement exercise on private market investments completed by the Regulator (the findings of which will be published in the coming months), which, while showing that industry had made some progress in recent years in relation to private market fee structures, the Regulator says more needed to be done based on the range of concerns raised around:

• the level of fees
• the netting of performance fees across multiple funds
• the level of transparency and the degree of disclosure around fees
• the distribution, and reporting, of total fund charges between fund fees and fund costs

This call on trustees is contained in the March 2026 Master Trust Bulletin which is available from the Regulator’s webpage. The rest of the Master Trust Bulletin largely summarises previous recent announcements from the Regulator on DC issues and is a useful catch-up on these.

MaPS annual report reveals further increase in pensions dashboard costs

The Money and Pensions Service has published its annual report and accounts for the year ended 31 March 2025 revealing a further substantial increase in the cost of delivering the pensions dashboard with expenditure up from £14.1m in 2023/24 to £18.6m in 2024/25. Nearly all of the increase is either due to staff costs or “contracted services”, the latter of which rose from £8.6m to £11.7m.

Once again, costs in the pension freedoms operating segment fell, this time from £28.5m in 2023/24 to £26.2m in 2023/24, as did those in the pensions guidance operating segment, from £8.8m to £8.3m.

Chair, Sara Weller, says in her introduction, that MaPS top strategic priority remains the Pensions Dashboards Programme (PDP) where it is “making significant and exciting progress”. However, unlike last year’s report and accounts, she failed to state that the dashboard is on track for its industry-wide October 2026 deadline. 

Chief Executive, Oliver Morley says in his introduction that the PDP is being built “at pace, creating what will be one of the most significant fintech launches in the UK at the point of ministerial go-ahead”.

In other news, the pensions guidance service delivered 248,000 sessions and 526,000 digital tool completions – with the latter being above target. This service covers a wide range of pensions-related matters, including the pension safeguarding appointments that operate where a DB transfer out request raises an amber flag.

And the pension freedom service delivered 112,000 “appointments attended” – which was above target. This service relates to the Pension Wise guidance provided to those who have DC pension pots and who need to understand their options so that they can make an informed decision when taking their benefits.

Government responds to Lords’ recommendations on IHT on unused pension funds and death benefits

The Government’s response to the House of Lords report on two aspects of the then Finance Bill, which included recommendations on the inheritance tax (IHT) measures that are to apply to unused pension funds and death benefits for deaths on or after 6 April 2027 (see Pensions Bulletin 2026/04), has been published. 

The Lords’ recommendations were wide-ranging and numerous, and of the 31 pension specific recommendations, the Government has accepted five and partially accepted another 15. 

Crucially the Government has chosen not to accept the recommendations to extend the payment deadline from six months to 12 months for IHT on pension assets for a transitional period, or to introduce a statutory safe harbour from late payment interest for Personal Representatives (PRs) where they can evidence that they took reasonable steps to try to meet those deadlines but had reasons beyond their control for not succeeding. Many of the other timelines recommended by the Sub-Committee were also not accepted by the Government.

Many of the recommendations cited as “partially accepted” are where the Government intends to adopt a compromise position (for example around central communications) or changes that were requested to regulation are instead promised in guidance (for example to set out a verification process for confirming the identity of the PRs in order to allow faster sharing of information). 

The response also confirmed that the Government expects to consult on information sharing regulations in Spring 2026 and make and lay them in Spring/Summer 2026. It also intends to share draft guidance with industry stakeholders in Autumn/Winter 2026. The final guidance and other supporting material for the industry and PRs is only expected in Spring 2027 – ie around the same time the new provisions come into force.

HMRC Pension Schemes Newsletter 179  

HMRC’s Pension Scheme Newsletter 179 looks ahead to the following changes that the new 2026/27 tax year will bring:

• UK – Luxembourg Double Taxation Agreement: under the 2022 double taxation convention signed by the UK and Luxembourg which took effect for all income received on or after 1 January 2024, some pensions previously taxed in Luxembourg are now taxable in the UK (and vice versa) unless the recipient has elected otherwise. The newsletter highlights that HMRC will start to apply the UK’s taxing rights from 6 April 2026 where possible by changing individuals’ tax codes and requiring pension schemes to reflect these changes and operate PAYE for these cases.
• UK resident pension scheme administrators: the newsletter advises that the managing pension schemes service will be offline for a few days (expected to be between 2 April 2026 and 7 April 2026) while being updated to reflect the new requirements that registered pension schemes must have a UK-resident pension scheme administrator from 6 April 2026 (see Pensions Bulletin 2026/05).
• Digitalisation of relief at source: the newsletter includes a reminder that from 6 April 2026, any relief at source claims submitted for 2026/27 or later tax years must include the Pension Schemes Tax Reference and the Pensions Scheme Administrator ID (see Pensions Bulletin 2026/09).

The newsletter also reiterates that scheme administrators are now only able to check their members’ protections or enhancements through the authenticated “Check a pension scheme member’s protections and enhancements” service within the Managing pension schemes service.