Pensions Bulletin 2026/14
Pensions & benefits Policy & regulation DB pensions Pensions taxThis edition: 2026 increase to State Pensions arrives, State pension age starts its climb to 67, Scheme Administrator restriction comes into force and more.
2026 increase to State Pensions arrives
The annual increase to State Pensions took place on Easter Monday this year with the Government issuing a press release on Good Friday that headlined an increase of up to £575 as a result of the operation of the triple lock delivering a 4.8% increase on both the basic and the new State Pension. This year it was the earnings element of the triple lock that won out (with the CPI by contrast increasing by 3.8%, which was ahead of the 2.5% fixed element).
As we have previously reported, the full rate of the new State Pension has increased from £230.25 to £241.30 per week, whilst the full Basic State Pension has increased from £176.45 to £184.90 per week. The Pension Credit standard minimum guarantee will also increase by 4.8%, from £227.10 per week to £238.00 per week for a single pensioner.
To accompany this latest increase, numerous pages on GOV.UK have been updated to reference the State Pension rates for 2026/27.
Comment
The Government presents this increase as a good news story alongside other actions it is taking to ease pressure on household finances. However, an earnings-driven increase to State Pensions is the baseline required by legislation, with the aim of the triple lock policy on top being to boost pensions when earnings growth falls below price inflation, 2.5%, or both.
State pension age starts its climb to 67
Easter Monday also marked the point at which State Pension Age started to climb from 66 to 67. Those who celebrated their 66th birthday on 6 April 2026 will have to wait a further month before they can take their State Pension, unlike those who marked their 66th birthday on Easter Sunday who could have enjoyed a festive egg safe in the knowledge that they could draw on the State Pension from the following day.
Broadly speaking, over the next year, as each month passes, State Pension Age will increase by a further month. As a result, those born on 6 March 1961 will have to wait the full year, until their 67th birthday, before they too can start to receive the State Pension.
Comment
The next step up, from age 67 to 68, is not due to start until 2044 – that is unless Dr Morrissey’s review of State Pension Age (see Pensions Bulletin 2025/33) concludes otherwise and the Government accepts her recommendations.
Scheme Administrator restriction comes into force
The ability of the Scheme Administrator of a registered pension scheme to be a legal resident of an EU member state or a non-member EEA state (currently Norway, Liechtenstein and Iceland) came to an end on Easter Monday as a result of section 34 of the Finance Act 2025 which provides that from this day, the Scheme Administrator has to be a UK legal resident.
To mark this change, HMRC has updated its guidance on registration as such an administrator.
Comment
This change has only become possible because of the UK leaving the EU and seems to be little more than post Brexit legislative housekeeping. As this change has been long signalled, those schemes potentially affected should have by now taken the necessary action.
Twenty years of pensions tax “simplification”
Easter Monday also marked the 20th anniversary of A-Day – that hugely significant pensions tax event that took place on 6 April 2006 when the lengthy Part 4 of the Finance Act 2004 that rewrote existing pensions tax law and removed the discretionary approval means of operation in an apparent aim to deliver simplification, came into force.
Comment
Simplification it was most definitely not and over the past 20 years nearly everyone involved in pensions practice has had to have more than a passing acquaintance with many aspects of this Act and regulations made under it, both of which have been subject to much further change.
The last major change was the Finance Act 2024 that removed the Lifetime allowance and replaced it with two lump sum allowances. For now, it seems that the pensions tax regime which many of us have come to understand, at least in part, is unlikely to change significantly, notwithstanding the related changes to inheritance tax law that are to come into operation on 6 April 2027.
No surprises as pension scheme tax rates and allowances remain frozen
Each year the Government updates its useful summary of pension scheme rates and allowances and as we move into the 2026/27 tax year it has updated its publication for this tax year’s figures.
Comment
Although there are no changes to any of these rates and allowances the summary is a useful reminder of the key pensions tax rates and allowances.
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