UK Pensions: what’s new this week? July 21, 2025

Mansion House speech

The chancellor gave her second Mansion House speech this week. There were no significant announcements directly affecting pensions, although it remains possible that the second stage of the government’s Pensions Investment Review, focusing on pensions adequacy, may be published before the summer recess. The speech focused on "cutting red tape" in the financial services sector to boost growth. Announcements that may be of interest to schemes include:

• For schemes with bank sponsors, the ring-fencing regime—which separates banks’ retail and investment banking activities—will be reformed; HM Treasury will conduct a review looking at balancing growth and stability, reporting by early 2026. Capital requirements will be changed to free up money for lending and investment: changes will be made to the MREL requirements (that is, the minimum requirements for own funds and eligible liabilities), including raising the assets threshold to GBP25–40 billion; new Basel 3.1 banking rules will be introduced from January 2027 implementing lower capital requirements for domestically focused banks; and the Financial Policy Committee will review the overall level of bank capital needed for UK financial stability, reporting back to the chancellor by the end of this year.
• The government has published a policy paper and draft statutory instrument (SI) setting out proposed changes needed to implement targeted support. HM Treasury intends to legislate in 2025, subject to feedback on the draft SI and Parliamentary availability.
• A new, tailored regime will be developed for captive insurance (insurance undertakings that provide insurance services to their parent or other members of the group, which are sometimes used in pensions risk reduction structures). The aim is to make captive arrangements more attractive, with lower capital and reporting requirements, faster authorisations and a broader range of companies being able to utilise them. Implementation is targeted for mid—2027.
• Various initiatives have been announced to make UK asset management attractive and competitive.

The speech also highlighted the Employer Pension Pledge entered into by over 20 of the UK’s largest employers. Signatories have committed to focus on value for money, rather than cost reduction, when selecting or reviewing pension providers.

Read the speech and supporting documents.

TPR corporate plan update and annual report

The Pensions Regulator (TPR) has published its annual report and accounts, together with an update on its three-year (2024–2027) corporate plan.

These documents look at TPR’s performance against its objectives and set out its priorities for the next year. A number of key areas of focus, consistent with recent TPR messaging, are drawn out:

• Raising standards of trusteeship and scheme administration, bringing them into line with other professions and corporate governance standards, and expanding oversight of professional trustees and administrators.
• Ensuring strong investment governance in light of ongoing market volatility, and good systemic risk management, including through an updated environmental, social and governance (ESG) strategy.
• Delivering value for money, with TPR working alongside the DWP and FCA to develop solutions for the value for money framework, guided retirement, small pot consolidation and "megafund" requirements set out in the Pension Schemes Bill, as well as encouraging consolidation and greater transparency via the voluntary disclosures of investment and asset allocation data across the DC market.
• Supporting investment in diverse assets, including this as an aspect of improved trustee standards, investment governance and value for money. TPR is "supportive of the policy agenda which looks to remove any unnecessary barriers to pension schemes investing in productive assets if it is in savers' interests to do so".
• Promoting innovation and digital, data and technology strategies.

Read the annual report and accounts and corporate plan update.

PASA publishes de-risking "jargon buster"

The Pensions Administration Standards Association (PASA) has published a "jargon buster" explaining commonly used de-risking terms, including liability management exercises, buy-ins, buy-outs, capital-backed journey plans, longevity swaps and superfunds, plus running on or winding up a scheme. It outlines the administration and governance requirements and expectations for each option and other factors to consider when choosing and executing a strategy. This is the first in a series of resources on the topic of de-risking which will be published by the group over the coming months.

Read the Jargon Buster.