Current Issues April 2026

TPR issues Virgin Media case guidance

TPR has issued guidance on the remediation provisions in the Pension Schemes Bill, aimed at schemes affected by the Virgin Media case. The guidance outlines trustees’ responsibilities, including obtaining legal, actuarial and administrative advice, and explains how the remediation process is expected to operate. Key points include ensuring relevant records are retained, preparing responses to member queries, and noting that remediation actions do not need to be reported to the Regulator. Historic issues resolved through remediation are unlikely to be considered materially significant.

TPR models future of DB scheme

TPR’s modelling suggests the improving funding position of DB schemes is bringing end-game options into reach for many. As at March 2025 there were around 4,700 private sector DB schemes with £1.1 trillion of assets, with 52% already in surplus on a buy-out basis, compared with just 2% in 2016. TPR estimates that more than 75% of schemes could afford buy-out by 2035. Smaller schemes are expected to form a large part of this group, with buy-out seen as more likely than long-term run-on strategies.  Despite the increase in demand, TPR believes the insurance market should remain able to absorb transactions, with around £40-£50bn of bulk annuity demand expected annually. TPR – Evolution of DB schemes

New Pensions SORP

A revised Pensions Statement of Recommended Practice (SORP) is expected to be finalised in early 2026 and will apply to scheme years beginning on or after 1 January 2026. The update aligns pension scheme reporting with changes to FRS 102 and reflects wider industry developments. Key changes include revised fair value wording (retaining bid pricing), removal of annuity provider valuations, enhanced investment and risk disclosures (including liquidity risk), additional surplus disclosures and updated going concern guidance.

Finance Act introduces IHT changes

The Finance Act 2026 introduces inheritance tax (IHT) on most unused pension funds and certain death benefits from 6 April 2027.  While most pension funds will fall within an individual’s estate, key exclusions include death-in-service benefits, dependants’ scheme pensions and charity lump sum death benefits. Spouse and civil partner exemptions remain in place. Personal representatives will be responsible for reporting and paying IHT, with pension schemes facing increased information requirements. The Government estimates around 8% of estates will be affected. The Act also extends the deadline for further changes linked to the abolition of the lifetime allowance to 30 June 2026.

Salary sacrifice legislation to change

The National Insurance Contributions (Employer Pensions Contributions) Bill completed its Parliamentary stages in March. Royal Assent is expected shortly after the Easter recess.  It will allow regulations to introduce employer and employee National Insurance contributions (NICs) where employer pension contributions above £2,000 per annum are made via salary sacrifice. The changes are due to apply from the 2029/30 tax year, with regulations expected in due course.