Pensions Bulletin 2026/19

Pension Schemes Act 2026 published 

Following Royal Assent on 29 April 2026 (see Pensions Bulletin 2026/17), the Pension Schemes Act 2026 has now been published.  

Whilst some of the Act’s contents, such as those relating to the Virgin Media issue, came into force immediately on Royal Assent, most require secondary legislation either to fill in the details (such as measures impacting DC schemes and releasing surplus from DB schemes), or simply to switch on (such as those relating to the Pension Protection Fund).  

King’s Speech – TPR and FCA to be subject to new growth duties? 

The second King’s Speech of this Parliament was delivered on 13 May 2026, with 37 Bills promised to be taken through in this parliamentary session. However, and most unlike the King’s Speech of July 2024 (see Pensions Bulletin 2024/27) where the now Pension Schemes Act 2026 was promised (see article above), there appear to be no Bills that directly impact on pensions. 

Nevertheless, and following on from the Government’s desire to overhaul the UK’s regulatory system (see Pensions Bulletin 2025/11), a Regulating for Growth Bill will “make the UK’s regulatory system fit for the future so that it plays a full role in delivering growth and supporting innovation”. It seems that the Pensions Regulator (TPR) and the FCA are likely to be subject to the Bill’s provisions, including being given “a clear, statutory mandate to prioritise growth without undermining their important core functions”. 

HMRC says more about IHT and pensions

HMRC has published a technical note that sets out in some depth how inheritance tax on most unused pension funds and death benefits will operate in relation to deaths on or after 6 April 2027. This follows on from the Finance Act 2026, which contained the necessary primary legislation, receiving Royal Assent on 18 March 2026 (see Pensions Bulletin 2026/11). 

For the most part, the technical note explains the operation of the Finance Act 2026 provisions. This includes: 

• giving more supporting information on how the new “notional pension property” will be treated for IHT purposes; 
• setting out in Section 2.4 the processes for evidencing personal representative identities before a grant of probate or letters of administration are available; and 
• covering in a number of places what HMRC expects to be included in information sharing regulations, whose publication as a consultation draft in “spring 2026”, must now be imminent. 

Section 1.3 sets out the Government’s indicative timetable in relation to regulations, templates, guidance and other supporting materials on this subject, which runs from now to spring 2027.

TPR publishes “emerging evidence” on DC consolidation and economies of scale 

The Pensions Regulator (TPR) has published a brief report that it says brings together evidence on the emerging benefits of scale arising from the consolidation of small defined contribution (DC) schemes into master trusts. 

TPR sets out consolidation and scale trends for DC pensions, based on its own DC landscape analysis (see Pensions Bulletin 2026/11). It then goes on to reiterate the Government’s stated aim “to support a more consolidated and efficient market that delivers better long-term outcomes for members” and that, to be an auto-enrolment vehicle, many master trusts and group personal pension plans will need to have at least one main scale default arrangement of at least £25 billion in assets under management by 2030, with some exemptions to be set out in future secondary legislation. 

TPR has undertaken indicative analysis of cost per member across 29 active master trusts using recently acquired data. This uses the most recently available data submitted by schemes, covering the 2023 to 2025 period. 

The following summarises the main findings, many of which are based on previously published material both from TPR and other sources: 

• Annual management charges tended to be higher in multi-employer provider schemes than in single employer trusts (SETs) – with median averages of 0.32% and 0.24% respectively (however, response rates were quite low as a share of the SET market and it is also possible that some employers may subsidise costs in SET schemes).
• SETs are more likely to invest in UK listed equities than multi-employer providers (eg master trusts). For savers at 30 years to retirement, this allocation was 9.9% of assets under management in SETs compared with 2.6% in multi-employer provider schemes. (Again, response rates were quite low for SETs so the reader should exercise caution in interpreting this result.) 
• 23% of schemes held one or more investments in infrastructure, private equity, venture capital, renewables or in Long-Term Asset Funds (LTAFs). This proportion also increased in line with scheme size (ranging from 17% of micro schemes to 72% of master trusts). The majority of funds with these investments had invested some or all of their portfolio in the UK. 
• Current evidence in the UK linking scheme size with gross investment returns is weak. 
• Large schemes and master trusts have much greater awareness of TPR’s general code of practice, stronger governance generally, higher capability in relation to environmental, social and governance requirements and investment good practice, and stronger VFM processes. However, professional trustees have the greatest positive impact on the quality of governance in the smallest schemes.

TPR consults on its corporate strategy 

The Pensions Regulator (TPR) has issued a draft corporate strategy document for consultation. The document sets out TPR’s strategy for the five years 2026 to 2031. TPR states that it is setting out a clear strategic framework underpinned by a vision for people to have a sustainable income in retirement and a mission to protect workplace pension members’ money. These are underpinned by six outcomes (three member and three market orientated) which TPR says will guide what it does, define success and shape how it works. 

The three member outcomes TPR is seeking are that savings are secure, deliver better value, and that pensions are fair. The three market outcomes are that schemes are well-run, there is a sustainable and resilient pensions system and there is a seamless and integrated system for savers from joining a scheme to taking an income in retirement. 

This strategy has been published with the backdrop of the reforms in the Pension Schemes Act 2026 and the ongoing work of the Pensions Commission, expected to report next year. 

The consultation has three questions asking whether TPR’s vision sets the right long-term ambition, has identified the main trends and where its role could be more active to maximise saver outcomes and support a resilient and sustainable market. 

Consultation closes on 8 June 2026 and a final version of the strategy document will be published later this year. 

TPO issues its corporate plan

The Pensions Ombudsman (TPO) has published its corporate plan for 2026/27. This sets out how it intends to build on its Operating Model Review and start to make inroads into its historical caseload.

The scale of TPO’s workload is challenging. New pension complaints are projected to have risen from 6,634 in 2023/24 to potentially 13,024 in 2026/27 and on to 16,149 in 2028/29.

To meet this challenge TPO is implementing its Operating Model Review (see Pensions Bulletin 2025/23, stating that early indications for 2025/26 show that it closed 14% more cases than in 2024/25 and an impressive 63% more than the year before that, which was pre-Operating Model Review.

TPO also confirms that the Government has accepted the case for additional funding as part of a three-year settlement for 2026-29. 

A central theme is that TPO wants to increase “supply” while reducing avoidable “demand”.

On the supply side, it plans to grow its casework teams substantially including creating two new adjudication teams to handle complex casework. It also plans to expand the use of expedited determinations. 

On the demand side the plan has a clear message for schemes: more complaints should be resolved before they reach TPO. To achieve this TPO will particularly focus on engaging with large schemes (both public and private sector) and continue to work with organisations such as TPR to improve pension schemes’ internal dispute resolution processes.

TPO also plans to deliver an artificial intelligence (AI) pilot for streamlined case summarisation. It is careful to reassure us that this will not be used for decision-making.