UK Pensions: What’s new this week? May 5, 2026

Pension schemes bill gains Royal Assent

The Pension Schemes Bill has been given Royal Assent, becoming the Pension Schemes Act 2026. 

What does the Pension Schemes Act cover?

The Act lays the groundwork for a wide range of significant changes to the pensions landscape: 

• A process enabling schemes to remedy invalid alterations following the decision in the Virgin Media case (that certain amendments made by schemes that were contracted-out on a section 9(2B) basis between 1997 and 2016 are void unless a necessary actuarial confirmation was provided).
• Provisions to make it easier to allow DB scheme surpluses to be paid out to employers.
• A Value for Money (VFM) framework for relevant DC schemes/arrangements.
• A framework for the consolidation of small, dormant DC pots.
• A requirement that occupational DC schemes provide members with one or more default decumulation
  solutions (“guided retirement products”), designed to provide a regular income in retirement.
• A requirement that master trusts and GPP providers being used for auto-enrolment must have a “main scale
  default arrangement” (“megafund”) with at least GBP25 billion assets under management by 2030.
• A power for the government to impose a mandatory minimum level of investment of default funds in “qualifying assets” for master trusts and GPP providers being used for auto-enrolment. This power was the subject of much debate and amendment through the Parliamentary process, which has resulted in some watering down, including:
  • restricting it to no more than 10% of default fund assets (and no more than 5% need be UK-focused)
  • requiring the FCA and TPR to report on market conditions restricting investment in qualifying assets before the reserve power can be exercised
  • making it easier for schemes to apply to TPR for an exemption on the basis that the mandated investment is“likely not to be in the best interests of members of the scheme”.

The reserve power cannot be exercised before January 1, 2028 and will lapse if not used by the end of 2032.

• A regulatory framework for DB superfunds to replace TPR’s current interim supervisory regime.
• Provisions to remove restrictions that prevent the Board of the PPF from reducing the annual pension protection levy and being able to raise it again within a reasonable timeframe; the PPF has announced that it will not charge conventional schemes a levy for 2026/27 in anticipation of this.
• Amendments which will mean that the Pensions Ombudsman will be regarded as a “competent court”. This will remove the need for pension schemes to apply to the County Court to enforce TPO decisions.

The majority of changes will require further detail to be set out in regulations. The government’s intentions on timings for this were set out in its June 2025 “Workplace pensions: a roadmap” document but it has suggested that there will be updates to this. 

The final version of the Act has not been published at the time of writing; read the government’s press release.

Salary sacrifice bill given royal assent

The National Insurance Contributions (Employer Pensions Contributions) Act 2026 has also received Royal Assent, laying the groundwork to make National Insurance contributions payable where employer pension contributions made in respect of an individual via a salary sacrifice arrangement exceed GBP2,000 a year.  

The Act sets out the legislative framework, but the majority of the detail will be set out in forthcoming regulations. The changes will take effect from April 6, 2029. 

The final version of the Act has not been published at the time of writing. 

New TPR code for multi-employer CDC schemes

TPR has published its revised code of practice for collective defined contribution (CDC) schemes, which has been laid in Parliament. CDC schemes pool pension contributions in a collective fund, which provides a target income for life without guaranteed payout levels.  

The updated code reflects the move to allow CDC arrangements to be used for multiple, unconnected employers. It sets out TPR’s expectations of CDC schemes, the criteria for their authorisation, and how TPR will use its powers in this area.

The code is expected to come into force in mid-October 2026, with multi-employer schemes potentially operating from early 2027; TPR says it is already in discussions with several potential market entrants.  

Read the code, government explanatory memorandum, TPR’s press release and response to earlier consultation.

Dashboards: operational failure, error handling and common questions

The Pensions Dashboards Programme (PDP) has published new guidance on operational failure scenarios and error handling. It builds on the technical standards and introduces refined definitions, extended error scenarios and recommended retry patterns that pension providers and schemes should adopt. 

The PDP has also published a blog post covering common dashboards questions, including who is in scope, how and when to connect, changing connection dates, voluntary connection and ongoing duties post-connection. The post refers to existing PDP and regulatory guidance on each topic

Read the guidance and blog post.