The 2026 Budget contained a number of pensions-related announcements. Key points include:
HMRC has published a newsletter with more detail on the announcements. The Budget also announced that the Pensions Commission will publish its final report in February 2027.
Action Trustees and administrators should review their death benefit processes and member communications in light of the removal of the two-year rule, and factor the extension of the IHT direct payment option to prospective personal representatives into their preparations for 6 April 2027.
They should also monitor the progress of the changes to serious ill-health lump sums and the taxation of death benefits that exceed the member’s lump sum and death benefit allowance.
The Pensions Regulator (TPR) has published guidance encouraging trustees to explore how artificial intelligence (AI) could deliver better member outcomes, while understanding and managing the associated risks. The guidance sets out seven key principles for trustees:
For more information, please see our Legal Update, The Pensions Regulator Sets Out Seven Principles for Trustees’ Use of AI.
In addition, Pensions UK has published a report on how the pensions industry can embrace AI responsibly while maintaining clear accountability and robust governance.
Action Trustees should review the guidance and consider whether any changes are required to their scheme’s arrangements around the use of AI.
TPR has published guidance to help trustees identify and manage potential hidden AI-related investment exposure. It sets out steps for trustees to take to ensure they understand their scheme’s aggregate exposure, and to test whether diversification will remain effective under stressed market conditions. TPR expects trustees to:
Action Trustees should discuss the guidance with their investment advisers and consider whether any action is needed in relation to their scheme’s investments.
The National Cyber Security Centre has published guidance for organisations on mitigating the impact of the PHP security issue. PHP is a programming language in which a security flaw was recently identified which may allow hackers to execute commands on any web server running PHP. The guidance sets out a list of priority actions that organisations should take.
Action Trustees and administrators should seek confirmation from their administrators and other service providers that they have considered the guidance and taken any necessary steps.
The Pensions Dashboards Programme (PDP) has published a further updated draft of its new reporting standards (version 2.3). The new version makes minor clarifications to the previous draft (version 2.2). The new standards are awaiting approval from the Secretary of State for Work and Pensions before they become legally binding. In the meantime, the previously approved version (version 2.0) remains legally binding.
The PDP has also published a blog post on the updated draft standards.
In addition, the Pensions Administration Standards Association has published guidance on resolving “possible” dashboard matches. A possible match occurs where the information supplied through a dashboard indicates the user may be a scheme member, but further checks are needed to confirm this.
The guidance covers contact routes, identity checks, communicating outcomes, handling unresolved cases, data protection, and monitoring. It also notes opportunities to improve underlying data quality through the resolution…
