HL UK Pensions Law Digest 21 July 2025

Welcome to our latest update, in which we cover: 

Mansion House 2025

• Points of interest for pensions from the Chancellor's speech and accompanying documents;

Pensions dashboards: voluntary connection 

• A call for input for schemes which can connect voluntarily to the dashboards ecosystem;

De-risking jargon buster

• Help from PASA with understanding terms commonly used when de-risking;

Pensions Ombudsman: Annual Report and Accounts

• Including a couple of interesting reports from the Ombudsman's caseload last year;

Pensions Regulator: Corporate Plan and Annual Report

• Setting out TPR's areas of focus for this year;

Pensions Protection Fund: Annual Report and Accounts

• Confirming the PPF's healthy funding position and ongoing areas for discussion.

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Mansion House 2025

On 15 July 2025, the Chancellor gave her Mansion House speech and set out her Leeds Reforms, including launching the Financial Services Growth and Competitiveness Strategy.

Points of note in relation to pensions from the speech and associated documents are as follows.

Pension Schemes Bill

• The Pension Schemes Bill is expected to be signed into law in the next few months. Reforms made by the Bill to enable greater productive investment and improve saver returns are a key part of the government's strategy for growth and competitiveness.

Investment

• The Chancellor intends to futureproof the regulator regime for asset management and will publish draft legislation in early 2026.
• The government has decided not to pursue a UK Green Taxonomy. Its consultation response explains how the two objectives of channelling capital for investment and preventing greenwashing may be better met through other measures, including the adoption of UK Sustainability Reporting Standards (currently subject to consultation).

Targeted support

• HM Treasury has issued a Policy Note and draft Order to amend the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001/544 to add a new regulated activity of providing targeted support. Providing targeted support under the Order will not be treated as “advising on investments” for the purposes of financial services legislation.
• The targeted support regime is intended to permit authorised firms to provide more support with investments and pensions by making recommendations designed for groups with similar characteristics and circumstances.
• Under targeted support, authorised firms will be able (in particular) to:
  • Suggest an alternative contribution rate where a consumer may be under-saving for retirement; and
  • Suggest a course of action for accessing pensions, such as a specific drawdown product.
• Alongside the targeted support regime, the Financial Conduct Authority (FCA) intends to simplify its advice rules to create a clearer distinction between simplified and more holistic advice.
• The targeted support regime will not impact the ongoing provision of guidance by non-FCA authorised firms.

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Dashboards: voluntary connection guidance - call for input

On 17 July 2025, the Pensions Dashboards Programme (PDP) issued a call for evidence on guidance on voluntary connection to the dashboards ecosystem.

The guidance is aimed at schemes which are eligible to connect to the dashboards ecosystem but are not required to do so. A scheme will be eligible (but not required to connect) if it:

• Has between one and 100 active, deferred or pension credit members;
• Has at least two members in total (including pensioners); and
• Is a registered scheme with its main place of administration in the UK.

The call for evidence points out that schemes applying for voluntary connection must have regard to PDP guidance and that, once the application is accepted, the scheme will be subject to the legislative requirements applicable to schemes which are required to connect.

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De-risking jargon buster from PASA

The Pensions Administration Standards Association (PASA) has issued a jargon buster which:

• Explains various terms commonly used in de-risking for defined benefit (DB) schemes;
• Highlights the administrative and governance responsibilities which may arise at different stages of a de-risking process; and
• Flags other factors (such as data quality, timeline and regulatory requirements) which should be considered whichever de-risking approach is used.

PASA comments that the de-risking jargon buster is the first in a series of resources intended to support better understanding and improve outcomes.

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Pensions Ombudsman: Annual Report and Accounts 2024/25

The Pensions Ombudsman (TPO) has issued his Annual Report and Accounts 2024/25. In this period TPO closed 9,435 complaints and received 9,610 new complaints. The Report explains progress made with TPO's operating model review (please see our report of a recent TPO blog).

Interesting case reports from the year included Mr E (please see our previous article) and the following.

Referral to volunteer adviser led to swifter resolution

• A case concerning the calculation of a serious ill health lump sum (SIHLS) could not be referred to TPO because, although the member had complained, her complaint had not been made through the scheme's internal dispute resolution procedure (IDRP). However, the member was deemed to be vulnerable and her case was fast-tracked to a volunteer adviser to provide support while going through IDRP. After speaking to the adviser, the member decided to accept the compensation offered for maladministration and accepted that the revised calculation of her SIHLS was correct.

Pension sharing on divorce

• TPO turned down a complaint by a member of Teachers' Pensions (TP) about recovery of overpaid pension following the implementation of a pension sharing order (PSO) against his pension.
• TP had explained that the member's pension paid in the period between the date of the PSO and the date the PSO was implemented would be overpaid and that TP would seek repayment. Under the terms of an ancillary relief order (ARO) granted by the Court, the member had to pay £650 per month to his former spouse until the PSO was implemented (not the date the PSO was made).
• TPO concluded that TP was entitled to seek recovery of the overpayment and that the ARO was outside TPO's jurisdiction. TPO recognised that the member was caught between the ARO which required him to pay maintenance and TP's entitlement to recover overpayments for the same period. TPO pointed out that the risk of this type of situation arising had been raised in 2019 by the Pensions Advisory Group and endorsed by the President of the Family Division of the High Court.

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Pensions Regulator: Corporate Plan and Annual Report and Accounts

The Pensions Regulator (TPR) has issued its Corporate Plan 2025/26 and its Annual Report and Accounts for 2024/25.

Key areas of focus for TPR in 2025/26 include:

• Using a new enforcement strategy to make sure that employers comply with their auto-enrolment duties;
• Ensuring that schemes are well run, including through: a new strategy for raising standards of trusteeship; continuing engagement with the largest administrators; supporting dashboard preparation and compliance; and working towards common data standards;
• Improving investment governance, so that all savers benefit from diversified investments and that schemes invest in productive assets where it is in savers' interests to do so;
• Supporting reforms introduced by the Pension Schemes Bill, including small pot consolidation; value for money; provision of appropriate defined contribution (DC) decumulation pathways; and the emergence of pension “megafunds”;
• Reducing unnecessary regulatory burdens and streamlining data reporting requirements and working towards common data standards; and
• Working with the DWP to expand TPR's supervisory approach to include public sector / public service schemes.

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Pension Protection Fund: Annual Report and Accounts 2024/25

The Pension Protection Fund (PPF) has issued its Annual Report and Accounts 2024/25.

Points of interest include:

• The PPF's actuarial liabilities as at 31 March have fallen to £17bn from £19bn last year, and assets under management have fallen slightly to £31.2bn from £32.1bn in the previous year. The PPF levy collected was £104m for 2024/25, compared to £173m for 2023/24, and £45m planned for 2025/26.
• The PPF Chair, Kate Jones, reports that she has met the Pensions Minister a number of times to discuss issues of the levy and indexation of PPF compensation.
• The PPF intends to continue to work with the government and industry stakeholders to explore the potential role of a public defined benefit (DB) consolidator, administered by the PPF.
• The PPF has completed implementation of Hampshire uplifts (to increase PPF compensation to 50% of the value of accrued scheme benefits) and, following Hughes, has removed the PPF compensation cap for eligible members. The PPF has not included any allowance for additional liabilities arising from Virgin Media but continues to work with the DWP to agree its approach for implementation.

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Authored by Jill Clucas.