Quarterly Pensions Watch: Wave of regulations driven by Government’s Plan for Change
Quarterly Pensions Watch: Wave of regulations driven by Government’s Plan for Change
18 Jul 2025
A wave of long-awaited developments landed in quick succession at the end of May and the start of June, including the final strategy for funding valuations and updated guidance for DB schemes. At the same time, the Government has sharpened its focus on consolidation with proposed changes in the Pension Schemes Bill that could reshape both DB and DC schemes over the next five years.
In this edition of Quarterly Pensions Watch, we examine the latest developments, outline what lies ahead, and consider the potential implications for trustees and scheme sponsors.
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What you need to know
- In recent editions of our Quarterly Pensions Watch, we highlighted a long list of developments that the industry had been waiting for. This finally reached a head with a flurry of regulatory activity over just 10 days in late May and early June.
- The final statement of strategy for funding valuations and guidance on the options for DB schemes were published. The Government continued its focus on consolidation with significant legislative changes proposed in the Pension Schemes Bill (the Bill) for both DB and DC schemes over the next 5 years. In this Quarterly Pensions Watch, we look at the roadmap ahead for these changes.
- Many schemes will be breathing a sigh of relief with the Government’s announcement that it will legislate to allow retrospective actuarial confirmation to be obtained, clarifying much of the uncertainty around the implications of the Virgin Media case.
- A raft of announcements were issued in the lead up to the Chancellor’s Mansion House speech on 15 July 2025. Deregulation and pursuing growth to boost UK competitiveness were the main focus, but despite the rumours there were no new pensions announcements.
Latest news
|
Development |
Comment |
| DB scheme options | On 3 June 2025, guidance on options for DB pension schemes was published. The range of endgame strategies covered includes: running on at low dependency; running on to build and use surplus; transferring to a consolidator, such as a superfund; and insuring benefits with an insurance company. |
| Pension Schemes Bill | The Bill was laid in Parliament on 6 June 2025, with key proposals including:
|
| Virgin Media | The Government will introduce legislation to enable affected pension schemes to retrospectively obtain actuarial confirmation that historic benefit changes met the necessary standards. Timing and the precise wording of the legislation are unclear and may wait until the judgement in a recent related case is handed down, which is due in Autumn 2025. |
| VAT changes | Following a decision from the Court of Justice of the EU, HMRC has announced a policy change to allow employers to fully recover VAT on investment costs related to pension fund management. |
| CMI 2024 released |
The Continuous Mortality Investigation has published CMI_2024. Previously, the projections model allowed for the impact of the COVID-19 pandemic by introducing weighting parameters on data from 2020-2023. CMI 2024 will instead introduce an ‘overlay’ to model the impact of the pandemic. |
| Pensions review | The final report on phase 1 of the pensions review, published in May, set out major reforms to improve pension outcomes for savers and support the UK’s economic growth. Many of these reforms were included in the Pension Schemes Bill outlined above. The Chancellor is expected to announce the scope of the next phase of the pensions review shortly, which is expected to focus on retirement adequacy. Reports suggest that this will include consideration of auto-enrolment rates. |
| Mansion House Accord | On 13 May 2025, major workplace pension providers came together with the Minister for Pensions and the Chancellor to sign the Mansion House Accord. Signatories have pledged to allocate at least 10% of their investments to private markets, with at least 5% going to UK private markets. |
Expected timeline of reform following the Pension Schemes Bill
Other measures on the horizon, at a glance
| Area | Anticipated development | Status |
| Phase 2 of pensions review |
Despite speculation, phase 2 of the pensions review did not feature in the Chancellor’s Mansion House speech. This is expected to assess the adequacy of current minimum workplace contributions and explore reforms to improve long-term retirement outcomes. | |
| Own risk assessments (ORA) |
The ORA is the trustees’ review of how well the effective system of governance ESOG) is working and how potential risks are managed. The first wave of ORA deadlines is expected to be 31 March 2026 so this is likely to be on agendas for 2025. | |
| Pensions Dashboards |
With larger schemes starting to hit connection deadlines information continues to be published in relation to the Pensions Dashboards Programme. | |
| Normal Minimum Pension Age (NMPA) | HMRC is expected to lay regulations to address minor transitional inconsistencies created by the increase in the minimum age at which most people can access their pensions from 55 to 57 from April 2028. | |
| Climate change regulations |
DWP is due to undertake post-implementation review of the 2021 Climate Change Governance & Reporting Regulations in the second half of the year. | |
Find out more
For further information, please get in touch with Mofozul Ali, Graeme Stephens or speak to your usual XPS Group contact.
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