Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.
- The government has published its outcome of consultation in relation to inheritance tax (IHT) on pensions, along with a policy paper and draft legislation. Two of the most controversial measures proposed at the consultation stage are not being taken forward. The first measure relates to death in service benefits from registered pension schemes. The outcome provides that from 6 April 2027, all death in service benefits from registered pension schemes will be out of scope of IHT, regardless of whether the benefits are discretionary or nondiscretionary. Currently, IHT is payable in respect of nondiscretionary death in service benefits paid by registered pension schemes (for example some public sector schemes). The change means that from 6 April 2027, those benefits will no longer be in scope for IHT. The second measure that has been dropped relates to the proposal that scheme administrators should be responsible for reporting and paying any IHT liability on any unused pension funds and death benefits. Instead, it will be the personal representatives of a deceased member that will be responsible for reporting and paying any IHT liability. Pension schemes will, however, be required to make the liability position clear and explain to nonexempt beneficiaries (such as beneficiaries who are not spouses or civil partners) that IHT may be due on the pension when informing them about their benefits, how they can access them, and options for paying IHT. There will be three options for paying any IHT liability on the pension component: the personal representatives pay it out of the free funds in the member’s estate; the beneficiaries direct the scheme administrators to pay the IHT out of benefits due; or the beneficiaries pay the IHT direct to HMRC. There will be a six-month deadline for paying IHT. The outcome notes that there will be a new digitalised IHT service in the 2027 to 2028 tax year to make submitting information and paying tax simpler and quicker. Consultation on the draft legislation closes on 15 September 2025.
- The government has launched its pensions adequacy review by way of (1) a new Pensions Commission and (2) the third review of the state pension age.
The government says that the Pensions Commission will explore the long-term questions of adequacy and retirement outcomes and will build on the findings of the pensions investment review and the measures in the Pension Schemes Bill. The government has appointed Baroness Jeannie Drake, Sir Ian Cheshire and Professor Nick Pearce as commissioners who will be responsible for steering the work of the Pensions Commission and ensuring that it meets its terms of reference. The Pensions Commission is expected to submit its final report to the government in 2027. Alongside this, the government has published a policy paper that sets out the state of Britain’s pensions landscape today and how it has changed since the first Pensions Commission (2002 to 2006). The policy paper is intended to draw together evidence of the challenges facing current and future pensioners that the Pensions Commission will consider and make recommendations to address. Also published this week in connection with the pensions adequacy review are updated statistics on automatic enrolment savings levels, future pension incomes and the gender pensions gap in private pensions 2020 to 2022, along with the outcome of a 2024 survey on planning and preparing for later life.
The state pension age review is a consequence of a requirement in the Pensions Act 2014 that the state pension age must be reviewed every six years. The Department for Work and Pensions (DWP) has appointed Dr. Suzy Morrissey to prepare an independent report in line with terms of reference on specified factors relating to the state pension age. The government has also published terms of reference for the Government Actuary’s report that will accompany the independent report and which will look at whether the rules about pensionable age mean that, on average, a person who reaches pensionable age within a specified period can be expected to spend a specified proportion of their adult life in retirement. The government says that the findings from both reports may also be shared with the Pensions Commission as part of the commission’s consideration of the longer-term future of the pensions system as a whole.
- The Pensions Dashboards Programme (PDP) is asking for industry feedback on its approach to voluntary connection with dashboards. Schemes with fewer than 100 members are currently not required by law to connect with dashboards but may wish to do so. This will help to extend dashboards coverage and improve the experience for users. PDP encourages connection providers, such as third-party administrators, to engage with relevant clients to assess their appetite for voluntary connection.
- In our weekly update on 28 January 2025, we noted that Companies House would be introducing during summer 2025 an application process to request the removal of certain personal information from the Companies House website. This would include physical signatures, occupations and, in relation to documents filed before 10 October 2015, full dates of birth of individuals. Directors of corporate trustees might find this facility useful. This function is now available, and Companies House has issued guidance on how to make an application for redaction of information. Each piece of information that is to be redacted must form the subject of a separate application, the cost of which is £30.
- Watch this webinar recording providing a UK business immigration update by our colleagues in the Labour & Employment team.
If you would like specific advice on any of these issues or anything else, please contact a member of our Pensions team.