In this article, we cover key pensions developments from June, in addition to our in-depth pieces on proposed changes to the Conditions for Transfer Regulations and the new ongoing DB scheme surplus regime.
Key developments include:
- planned technical amendments to the LTA removal regime;
- the Government’s decision to allow bulk transfers without consent into authorised CDC schemes and to review the flexible apportionment arrangement framework;
- TPR’s updated ‘potentially remediable alterations’ guidance to reflect the legislative remedy being in force;
- HMRC’s notification that schemes need to migrate onto the new online system by the end of the year and its updated guidance on VAT deduction on pension fund management costs;
- updates on pension dashboards; and
- the latest Retirement Living Standards.
Legislation: Fourth set of LTA removal technical regulations laid before Parliament
The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 came into force on 25 June 2026. The draft explanatory memorandum explains that the regulations introduce a series of technical amendments to ensure the removal of the lifetime allowance (LTA) and introduction of the new lump sum allowance (£268,275) and the lump sum and death benefit allowance (£1.073m) work as intended. The changes will be effective, where needed, from 6 April 2024 – the date on which the LTA was abolished to ensure fair treatment of all taxpayers.
The changes made include: allowing members to choose the ordering of same-day benefit crystallisation events, ensuring the correct operation of the new allowances, pension sharing, and bringing overseas pension payments fully within scope whilst avoiding double counting for those with enhanced protection. They refine the treatment of protections to ensure correct application, prevent double drawdown, and unintended erosion of protections and apply fixes to the calculation of trivial commutation lump sums and stand-alone lump sums.
In addition, electronic reporting is expanded, new information-sharing obligations between schemes following transfers are introduced, and flexi-access drawdown lump sum death benefits are included in assessment rules.
Consultations, statutory reviews and enquiries
Government will allow bulk transfers of money purchase benefits to CDC schemes
The Government has confirmed, in its response to the retirement collective defined contribution (CDC) consultation, that it will permit bulk transfers of members’ money purchase benefits without consent to an authorised CDC scheme or section. However, this easement will not extend to retirement only CDC arrangements, reflecting concerns that members in such arrangements would not have a statutory right to transfer their benefits out if they wished to do so.
Government to review FAA legislative framework
On 16 June 2026, the Pensions Minister confirmed that the Government would be reviewing the flexible apportionment arrangement (FAA) legislative framework following a ‘novel use’ of a FAA in December 2025 whereby an asset manager assumed responsibility for an employer’s defined benefit (DB) pension scheme. A FAA allows an employer of a multi-employer DB scheme to transfer its liabilities to a replacement employer without a statutory employer debt arising.
Although the 2025 transaction met FAA requirements, it was structured in a way not originally envisaged, effectively allowing the transfer of scheme assets and liabilities to an unrelated commercial entity. The Government has therefore indicated that it will review the FAA legislation to “ensure the regulatory standards and safeguards adapt to evolving market practice”. This reflects a recognition that, while profit-driven providers may deliver benefits for members, such models can also introduce additional risks.
TPR’s 19 June DB innovation blog also discusses the topic, noting that parties should engage with TPR early on about any proposed innovations. TPR explains its role in the December 2025 FAA transaction and how the transaction allowed the trustee to use surplus to benefit members rather than pursue a traditional buyout. TPR is working with the DWP to develop an interim approach for the use of FAAs whilst the FAA review is being carried out.
Government to review private pension access rules for the terminally ill
On 30 June 2026, the Financial Secretary to the Treasury confirmed that the Government is going to review the rules on terminally ill people accessing private pensions. At present, those with a life expectancy of less than 12 months can commute their pension benefits for a serious ill-health lump sum, provided the scheme rules permit this and that medical evidence is provided. However, the rules being permissive in nature can make access difficult for some individuals. The Lords also observed that the rules were developed at a time when terminally ill people often survived for only a few months, whereas advances in treatment mean that many people diagnosed with a terminal illness now live for several years.
The Pensions Regulator (TPR)
Updated potentially remediable alterations guidance
On 8 June 2026, TPR updated its Potential remediation for past alterations to salary-related contracted-out pension schemes guidance to “reflect that the Pension Schemes Bill 2025 received Royal Assent on 29 April 2026 and the potential remediation measures have now come into force”. See here for our coverage of the guidance following its initial release in March 2026.
TPR webpage for Pension Schemes Act 2026
On 25 June 2026, TPR confirmed the launch of a new Pension Schemes Act 2026 (Act) webpage and direct communications programme to assist schemes in preparing for the reforms. The programme forms part of TPR’s general communications drive to increase understanding of regulatory requirements. The initial stage of the Act’s communications programme is focusing on DC schemes, noting that “Not every scheme will get there” and that DC trustees should begin looking at whether their scheme will comply.
HMRC
Open schemes must migrate onto managing pension schemes service by end of year
HMRC’s newsletter 181 warns open schemes that have not already migrated onto the new managing pension schemes service to do so by 31 December 2026 because the pension schemes online service is being withdrawn from April 2027 and there may be service restrictions prior to the closure date. The exact closure date is not yet known but will be provided in due course. Failure to migrate means that scheme administrators will not be able to comply with statutory obligations such as submission of tax returns and providing information. This could risk deregistration of the scheme and associated tax charges. Trustees that have not already migrated should do so as soon as possible.
HMRC updated guidance on VAT deduction on pension fund management costs
In June 2026, HMRC updated its VAT Input Tax internal manual, to provide more details on HMRC’s June 2025 policy paper on VAT deduction on the management of pension funds. The June 2025 paper explained that “HMRC will no longer view investment costs as being subject to dual use. Instead, all the associated input tax incurred will be seen as the employer’s and deductible by the employer, subject to normal deduction rules”, and that trustees could, provided they were VAT-registered, deduct input tax incurred providing management services to the employer which were charged to the employer. The June 2026 updates provide more details on how this policy should be applied by employers, trustees and the effect of VAT grouping.
Other news
Dashboards: MoneyHelper dashboard anticipated to be available in financial year 2027/28 (28.05.26)
The Pensions Dashboards Programme has confirmed that over 70 million pension records have now connected to the dashboards ecosystem, covering approximately 85% of in scope records and that it believes the MoneyHelper dashboard will be made available to the public in financial year 2027/28. Further updates on the public availability point will be provided around 31 October 2026, the statutory connection deadline. It is the Secretary of State for Work and Pensions that will decide on the launch date of dashboards – 6 months’ advance notice will be provided.
Dashboards: PASA guidance for monitoring compliance with dashboards and toolkit on treatment of survivor benefits
On 18 June 2026, PASA published new guidance to “help schemes, providers and administrators monitor ongoing compliance with pensions dashboards requirements” together with a new toolkit on survivor benefits. The guidance covers the three main areas of activity: matching, providing information, and connection performance, as well as saver questions, complaints and feedback.
Dashboards: PDP confirms daily automated data reporting will be required from March 2027
The Pensions Dashboards Programme (the PDP) has confirmed that the reporting standards which cover the generation and recording of operational information by providers and schemes and the reporting of such information to MaPS, will be updated to reflect the introduction of mandatory daily ‘application programming interface’ (API) reporting from March 2027 rather than the earlier suggested November 2026 date. The extension will allow for unforeseen issues that could cause ‘inadvertent non-compliance’.
It is also intended that some form of manual reporting will be required from Autumn 2026 for those connected parties that are not able to implement daily API reporting.
Updated retirement living standards
The 2026 update to the Retirement Living Standards reveals that the cost for all three levels has increased reflecting the higher cost of living.
- Minimum: £13,900 (single person cost per year), £22,500 (couple cost per year)
- Moderate: £32,700 (single person cost per year), £45,400 (couple cost per year)
- Comfortable: £45,400 (single person cost per year), £62,700 (couple cost per year)
Pensions UK expects around 82% of workers to meet the minimum retirement living standard, but only 23% might reach the moderate standard and just 9% the comfortable standard. This means that many will see a significant decrease in income when they retire unless they start saving more before retirement.