The Pension Schemes Act 2026

DB and DC: Phase two of the government's pensions review and review of the state pension age

The government launched phase two of its pensions review and announced a third review of the state pension age on 21 July 2025.

Phase two of the pensions review is considering the long-term future of the pensions system, including pensions adequacy, and could lead to future reforms. It is being conducted by a (revived) Pensions Commission which delivered its interim report on 19 May 2026 and will deliver its final report in 2027.

Consultation on improving standards of trusteeship

The government launched a consultation on improving standards of trusteeship, governance and administration on 15 December 2025.

The Pensions Regulator also intends to release a strategy for improving standards.

Start to prepare for the DC 'main scale default arrangement' requirement

The main scale default requirement is expected to apply to DC master trusts and group contract-based schemes used for automatic enrolment from 2030. 

The government has set out the steps it expects the trustees and providers of these schemes to take in the run up to 2030.

However, this change is also relevant to trustees and employers who are considering a move to a DC master trust or group contract-based scheme. 

Changes to existing CDC legislation

New regulations amending existing CDC scheme legislation took effect on 4 December 2025.

Deadline for meeting the LGPS asset pooling requirements

The provisions in the Pension Schemes Act relating to LGPS pools and governance will come into force on a date to be set by regulations.

The government has, however, confirmed a March 2026 deadline to meet the asset pooling requirements.

Goodbye to the administration levy

Section 126 of the Pension Schemes Act 2026 abolished the PPF administration levy with effect from 1 April 2026.

Royal Assent and Virgin Media-related provisions

The Pension Schemes Act 2026 received Royal Assent on 29 April 2026. 

As a result, the part of the Act intended to help schemes to address issues arising from the Court of Appeal's decision in the Virgin Media case is in force.

Royal Assent and a change affecting PPF and FAS members

The Pension Schemes Act 2026 received Royal Assent on 29 April 2026.

As a result, section 124 of the Act is in force, paving the way for members of the PPF and FAS to be able to access information about their compensation entitlements through pensions dashboards. 

Royal Assent and new information requirement

The Pension Schemes Act 2026 received Royal Assent on 29 April 2026. 

As a result, section 125 of the Act (which contains a new power to make regulations requiring employers to give information to scheme trustees, managers or providers about "jobholders" and "workers") is in force.

Removal of the need to apply to the county court

The Pension Schemes Act 2026 received Royal Assent on 29 April 2026. 

Section 121, which will remove the need to apply to the County Court after receiving a Pensions Ombudsman decision, will take effect two months after the date of Royal Assent.
 

Changes to PPF and FAS benefits

The Pension Schemes Act 2026 received Royal Assent on 29 April 2026. 

Section 122, which will permit the earlier payment of specific PPF and FAS benefits to terminally ill members, will take effect two months after the date of Royal Assent.
 

Next steps for CDC master trusts

From summer 2026, the Pensions Regulator may be able to consider applications for authorisation to operate an "unconnected multiple employer" (UME) CDC scheme (a CDC master trust or master trust section).

Next steps for retirement-only CDC

The government hopes to launch a consultation on draft regulations to allow retirement-only CDC sections in around mid-2026.

From early 2028, the Pensions Regulator may be able to accept applications for authorisation to operate a retirement-only CDC section.

Changes to give the PPF greater levy flexibility

The Pension Schemes Act 2026 received Royal Assent on 29 April 2026.

Section 123, which will give the PPF greater flexibility in setting levies, will come into force on a date to be set by regulations.
 

Next steps for new rules on extracting surplus from ongoing DB schemes

The government is expected to consult on draft regulations to support the DB surplus provisions in the Pension Schemes Act in 2026. Among other things, the regulations will confirm the funding threshold for extraction of surplus.

The government hopes that the new legislative framework for the payment of surplus, and new Pensions Regulator guidance for trustees, will be in force by the end of 2027.

Next steps for commercial DB superfunds

The government is expected to consult on draft regulations to support the commercial DB superfunds provisions in the Pension Schemes Act in 2026.

The government hopes that the full legislative framework for commercial DB superfunds, together with any updates to the Pensions Regulator's superfunds guidance (or a new superfunds code), will come into force in 2028.
 

PPF and FAS – indexation of pre-April 1997 benefits

January 2027 may be the first time that inflation increases on pre-6 April 1997 pensions are paid to eligible PPF and FAS members.

Next steps for the DC "value for money" framework

The government is expected to follow the regulation-making process for the regulations needed to support the "value for money" provisions in the Pensions Schemes Act in 2026-27.

The government hopes that the first VfM data will need to be published, and the first VfM assessments be completed, in 2028.

Next steps for the DC guided retirement duty

For trust-based schemes, the government plans to follow the regulation-making process for the regulations needed to support the "guided retirement" provisions in the Pension Schemes Act in 2026-27. (The Financial Conduct Authority will also follow its rule-making process for contract-based schemes.)

The government hopes that the guided retirement duty will apply to DC master trusts from late 2027, and to other trust-based pension schemes and to group personal pension plans from 2028.

Next steps for the consolidation of small DC pots

The government hopes to follow the regulation-making process for the regulations needed to support the small pots provisions in the Pension Schemes Act in 2027-28.

It hopes that providers will be able to apply for approval to act as a consolidator scheme in 2028, that small pots consolidators will be selected in 2029, and that the small pots transfer duties will come into force in 2030.

Introduction of contractual override

The government hopes that the contractual override will be available from 2028.

This override will help the providers of DC group contract-based schemes to consolidate default arrangements in preparation for the main scale default arrangement requirement. It will also help them to make changes to improve value for members.