UK Pensions: What’s new this week? October 27, 2025

CDC regulations and new consultation

The government has published a consultation response, draft regulations and a new consultation on Collective Defined Contribution (CDC) arrangements. In a CDC scheme, investments are held in, and benefits paid from, a collective fund, with the aim of achieving better returns through scale and providing better outcomes for members.

The draft regulations will expand the scope of the current CDC framework to allow unconnected employers to participate in a CDC arrangement (sometimes referred to as whole-life unconnected multiple employer CDC schemes). In its consultation response document, the government says that it has made changes to ensure a proportionate regulatory burden while still retaining a robust framework in which CDC schemes must be well—designed and well—run. These regulations are expected to come into force on July 31, 2026 alongside an updated Code of Practice.

In addition, a separate set of miscellaneous amendment regulations (due to come into force on December 4, 2025) will make various corrections to the existing CDC framework.

In a new consultation on policy proposals for the creation of "retirement CDC" schemes, the government is looking at options to allow DC savers to transfer into a CDC scheme at retirement. This could provide a decumulation income option (in line with the forthcoming guided retirement framework) as an alternative to buying an annuity or managing drawdown. These pensioner-only schemes would receive DC pots at retirement into a collective fund that provides a trustee-managed income for life, adjusted annually based on investment performance and scheme sustainability. By pooling investment and longevity risk, investing in a higher proportion of growth-seeking assets and providing only targeted (not guaranteed) benefit increases, retirement CDC schemes may be able to produce higher returns for members. The consultation closes on December 4, 2025.

Read the response to consultation, the main draft regulations, the miscellaneous amendment regulations and the consultation on retirement CDC schemes.

Update on TPR's regulatory pledges

HM Treasury has published an update on the progress of various regulators’ pledges, including some from the Pensions Regulator (TPR):

• TPR has completed its desktop review of the amount of capital that master trusts are required to hold and will engage directly with master trusts in October 2025, with findings to be published by the end of the year.
• On its pledge to develop an innovation framework and criteria to test new ideas, TPR has launched its TPR Innovation Support Service.
• In response to its pledge to reduce unnecessary regulatory burdens and improve data and data-sharing, TPR has launched automated submission of scheme returns and has started identifying activities that may burden schemes without adding value for savers. It will address these by March 2026 and will also provide proposals for appropriate data collection.
• In respect of encouraging consolidation and consideration of investment in productive assets, TPR is working with the government to consult on reforms to the value for money (VFM) framework in December 2025 and publish guidance to support the consolidation of smaller DC schemes in early 2026. TPR will ask for master trusts’ asset allocation data as of December 31,  2025 to better understand investment performance and prepare for the launch of the VFM framework.

Read the update.

TPR: Results of DB scheme survey

TPR has published results from a March 2025 survey of 200 trust-based occupational defined benefit (DB) pension schemes. Key findings include:

• 93% of schemes had a long-term objective (LTO), with the most common being to buy out liabilities with an insurance company (58%) or run on with low dependency on the employer (31%). Only 6% aimed to run on and generate a surplus and just 1% to enter a commercial consolidator vehicle, although 27% described consolidation as an attractive option.
• Among those with a funding surplus, 8% had used some of this surplus in the previous year. None of these had released it to the employer, but had typically used it to increase member benefits. When asked about government proposals to lift restrictions on releasing surplus funds, 53% said that their trustee board would have concerns about this, while 38% had no concerns and 9% did not know.
• Almost all schemes (95%) had a cyber security incident response plan. In most cases, they relied on a third-party’s plan, such as the employer or administrator (67%), rather than having a scheme-specific plan (28%). Around two-thirds of schemes had reviewed their cyber risk (68%) and controls (67%) in the previous 12 months. 64% received training/updates on scheme-specific cyber risk at least annually.
• 60% had increased the amount spent on managing/improving their data over the previous two years, and 46% expected this to increase in the next two years.
• Only 17% rated ESG as a high priority relative to other scheme responsibilities (though the proportion was higher in larger schemes); 36% described it as a low priority.

Read the report.

DWP to consult on issues around DB transfer advice

The Department for Work and Pensions (DWP) has confirmed that it intends to consult in the coming months on issues around transfer advice, potentially including the cost and availability of independent financial advice and the GBP30,000 threshold that triggers a requirement for independent advice on a DB transfer.

The statement comes in response to a written Parliamentary question about whether the secretary of state for work and pensions has considered adjusting in line with inflation the GBP30,000 threshold over which advice must be sought. The DWP response flags concern that raising the threshold could increase the risk of transfers being made without sufficient understanding of valuable guarantees about income in retirement. However, a 2023 review of the regulations noted industry concerns regarding the potentially disproportionate cost and limited availability of independent financial advice. Following work with the Financial Conduct Authority, the pensions industry, and HM Treasury, the DWP intends to consult on these issues in the coming months.

Read the Parliamentary Question and Answer.