Looking ahead to 2026, there are some significant pensions developments on the horizon and some key existing ones which will be progressed – meaning it will likely be another busy year for pensions, as Gateley’s Michael Collins explains.
The Pension Schemes Bill is expected to receive Royal Assent in 2026. The bill will significantly change the current defined contribution (DC) landscape, with the requirement for most multi-employer DC auto-enrolment master trusts and pension schemes to have at least one “main scale default arrangement”. These must have at least £25bn of “qualifying” assets under a common investment strategy by 2030 to continue.
Other DC measures include a new value for money framework as of 2028, a “guided retirement” or decumulation duty for trustees of occupational DC schemes, and a small pots data platform consolidation system starting in 2030 aimed at resolving the proliferation of small dormant pots.
Defined benefit (DB) related provisions include: the much-welcomed legislative fix addressing the issues arising from the Virgin Media case; easements for ongoing schemes being able to refund surplus; and commercial superfund provisions.
They also include confirmation that the Pensions Ombudsman is a competent court under section 91 of the Pensions Act 1995, meaning that trustees will no longer have to obtain a county court order to enforce an ombudsman’s determination that they are entitled to recoup a member’s overpaid benefits.
Decumulation and the guided retirement duty
We expect regulations relating to the new guided retirement provisions in the Pension Schemes Bill to be published in 2026.
This duty will require trustees of occupational DC schemes to either set up one or more default pension benefit solutions to guide members on taking a regular income in retirement, or transfer relevant members to a scheme that can provide a better outcome.
The Financial Conduct Authority will be responsible for setting up a similar duty for contract-based arrangements. The guided retirement duty will be phased in during 2027 and 2028.
Virgin Media legislative fix
It is hoped that trustees should be able to avail themselves of the Virgin Media legislative solution and obtain retrospective actuarial confirmation of in-scope alterations to contracted-out benefits of a DB scheme, in respect of which historic confirmation under section 37 of the Pension Schemes Act 1993 is not available.
The provisions are due to come into effect two months after the Pension Schemes Bill receives Royal Assent.
Collective DC authorisations
Authorisation applications for multi-employer, whole-of-life collective defined contribution (CDC) pension schemes may start in 2026.
Final regulations permitting, these kinds of arrangements are expected to come into force on 31 July 2026, and the government anticipates there being significant take-up of both this type of CDC provision and retirement-only CDC schemes, which are expected to be launched from 2028.
Pensions dashboards
Large pension schemes and providers, as well as all public service schemes, started connecting to the pensions dashboard technology ecosystem in 2025. Medium and smaller schemes and providers will connect during the first nine months of 2026 – the statutory backstop connection date is 31 October 2026.
We have yet to hear when the Money and Pensions Service’s MoneyHelper dashboard will be made available to the public. This could be before the October 2026 connection deadline, but we suspect this is unlikely. Whatever date it is, we should receive six months’ prior notice.
Pensions and inheritance tax changes
The legislation required to bring most unused pension funds and death benefits payable from a registered pension scheme within scope of IHT as of 6 April 2027, irrespective of whether the scheme has discretion over the death benefit payment, should make progress next year.
HM Revenue & Customs’ July 2025 policy paper confirmed the government’s inheritance tax plans, including that the only authorised death benefits that will not be included in the value of a deceased’s estate for tax purposes will be a dependant’s scheme pension, death in service benefits, and DC charity lump sum death benefits.
The existing exemptions from inheritance tax for property passing to a spouse, civil partner, charity, or registered club will remain.
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Own risk assessment
Occupational pension schemes with 100 or more members must complete their first own risk assessment within 12 months, starting with the last day of the first scheme year that begins after 27 March 2024, the date that the Pensions Regulator’s general code of practice came into effect.
This means that a scheme with a year-end of 31 March 2025 will need to complete its own risk assessment by 30 March 2026, and schemes in scope will be busy in 2026 completing their assessments if they have not already done so.
Productive finance and investment reform
We expect the government to continue its push for increased pension fund investment in UK productive finance.
The Pension Schemes Bill contains a reserve power that can be exercised by the government until 31 December 2035 to mandate that qualifying assets held by DC main scale default arrangements could be of a particular type, location, or percentage – a power that could be used to increase investment in UK private markets.
The government also hopes that some of the £11.2bn estimated surplus in private sector DB pension schemes could be extracted from ongoing schemes as a result of the Pension Schemes Bill – and that this might find its way into the UK economy.
Lifetime allowance abolition
Although the lifetime allowance was abolished on 6 April 2024, the government has confirmed that further technical amendments supporting the abolition regime are required, and these are expected in early 2026.
Michael Collins is a pensions partner at Gateley Legal.
