SIPP And SSAS Update October 2025

In this Update we take a look at recent legal developments affecting SIPPs and SSASs. These include provisions in the Pension Schemes Bill such as the introduction of a new small pots regime, and provision to allow contractual terms governing workplace personal pension schemes to be overridden where this is judged to be in members' best interests. We consider recent Pensions Ombudsman decisions on the duties of scheme providers and trustees when a member wants to invest in a high risk non-standard investment. We also look at recent court cases in which a member's creditors have sought to enforce judgment debts against the member's pension fund.

Addleshaw Goddard launches Tax Disputes and Investigations practice with strategic team hire

Addleshaw Goddard (AG) has strengthened its disputes and tax offering with the arrival of partner Steven Porter and a four-strong specialist team from Pinsent Masons (more information here). Steven, and legal director, Sam Wardleworth, have wide-ranging experience working with trustees, from compliance to investigations and disputes and they are well-placed to advise SIPP and SSAS trustees on a variety of tax issues. With a broad experience, the team can assist on most issues including unauthorised payments, VAT issues with HMRC and/or in contractual relationships (e.g. with recent developments around the FS exemption), compliance with HMRC rules on member transfers and international tax challenges, including cross-border members and transfers to non-UK schemes. They also have experience navigating investment restrictions including borrowing rules, related party transactions, VAT compliance on investments and resolving issues around in-specie contributions. Their expertise ensures trustees can confidently manage compliance, mitigate risks, and address disputes effectively. A few recent examples include:-

1. An appeal against unauthorised payments made to around 500 members. Steven and Sam assisted the trustees through HMRC's investigation, the Tribunal appeal process and a successful application to the FCF. Their advice encompassed both the technical tax position as well as the mass management of the appeal both alongside the trustee and with HMRC. This matter extended to advising trustees navigating tax issues arising from the transfer of members into a pension liberation scheme;
2. Handling investigations by HMRC on behalf of a handful of separate pension providers who allowed their SIPP customers to make 'in specie' contributions to their pension schemes. The cases were stayed behind the decision in Sippchoice and following the UT's decision the team negotiated settlements with HMRC mitigating the loss of the pension providers by ensuring HMRC were held to a strict application of the decision and their ability to enforce against taxpayers; and
3. Representing one of the UK's leading pension and investment platforms on its contractual position in relation to VAT associated with a provider of financial and account management services. The supplier sought to change the VAT position of services provided under the agreement associated with the financial services exemption and recover historic VAT from the provider. The team's ability to advise on both the technical tax position and the management of the contract dispute makes them well suited to scenarios like this one.
4. Advising pension fund trustees and SIPP managers on the VAT liability of self-storage supplies. The pension schemes had purchased long-term leases of storage pods from Store First and entered a leaseback arrangement, with Store First's subsidiary acting as managing agent. The issue was whether the trustees supplied land to Store First (VAT-exempt) or self-storage facilities to individuals (standard-rated VAT). Some leaseback arrangements are unclear, complicating liability. Similar schemes were marketed as not requiring VAT registration but often exceeded the VAT threshold. The team secured HMRC rulings confirming no VAT liability for the schemes, however careful analysis of the facts is required.

Action required now

Minimum size for group personal pension schemes used for auto-enrolment

At the end of May the Government published its Pension Investment Review Final Report alongside the response to its consultation "Unlocking the UK pensions market for growth". The Government confirmed that it would legislate via the Pension Schemes Bill to require that master trusts and personal pension schemes used for auto-enrolment must have at least one main default arrangement with at least £25 billion in assets under management (AUM) by 2030. The Government plans to engage with industry to refine the definition of default arrangement for this purpose. The minimum size requirement will not apply to single employer trusts, collective defined contribution (CDC) schemes, schemes that are only available to a closed group of employers related to their industry or profession, or to default arrangements that serve a "protected characteristic" such as religion.

There will be a "transition pathway" to allow additional time for schemes to reach the required scale if a provider or master trust can demonstrate that it has at least £10 billion in AUM by 2030 and a credible plan to have £25 billion in AUM by 2035. The Government will legislate to prevent new default arrangements being created except with regulatory approval.

The Pension Schemes Bill includes a "reserve power" to allow the Government to set targets to invest in a broader range of private assets, including in the UK. The Government says that it does not anticipate exercising this power unless it considers that the industry has not delivered the change on its own.

Our thoughts

SIPP providers that offer products used for auto-enrolment will need to consider whether their product is likely to meet the minimum size requirements once they come into force and, if not, how that issue will be managed.

Pensions Dashboards Programme (PDP) publications

In March the PDP published its standards, ie the technical rules which will govern the operation of pensions dashboards, and a blog post on what schemes need to do to connect to the pensions dashboards ecosystem. The key actions for schemes identified by the PDP are to:

• confirm their "connect by" date as set out in the DWP's guidance;
• confirm their route to connection (eg via the scheme administrator);
• consult the PDP's pensions dashboards standards;
• prepare their data;
• decide their data matching approach; and
• visit the PDP's website to stay up to date and access its guidance.

The PDP's standards include data standards, technical standards (relevant to IT specialists dealing with connection), a code of connection, and reporting standards.

PASA Dashboards Working Group publishes toolkit on use of warnings and unavailable codes

The PASA Dashboards Working Group has published a toolkit on the use of "Warning" and "Unavailable" codes. These codes are intended for use where value data can't be immediately updated to reflect a change in a saver's circumstances. The toolkit is intended to ensure consistency in how these codes are used.

FCA webpage on connecting to pensions dashboards

In January 2025 the FCA published a webpage flagging the need for pension providers to connect to the pensions dashboards by 31 October 2026 at the latest and be ready to comply fully with the requirements of COBS 19.11 regarding receiving find requests from individuals and returning the required information about their scheme benefits.

HMRC Pensions Newsletter outlines bulk reporting process for SIPP pension scheme returns

In March 2025 HMRC published its Newsletter 168. The newsletter contains details of the process for submitting a SIPP scheme return. It also contains a link to HMRC's drawdown tables for use from 1 September 2025, flags updates to the QROPS list in May 2025 (to reflect changes to the rules for recognised overseas pension schemes established in the EEA), and flags that applications for fixed protection 2016 and individual protection 2016 cannot be made after 5 April 2025.

Pensions Regulator alert highlights risk of impersonation fraud

The Pensions Regulator has issued an industry alert highlighting the risk of impersonation fraud. Action Fraud has received numerous reports of criminals seeking to exploit security vulnerabilities to gain access to members' pension accounts. Methods include:

• hacking members' e-mail accounts to obtain information which enables hackers to impersonate the member, change the member's bank details and withdraw funds;
• accessing members' account information to set up fake pension accounts in the member's name and move funds to the fake account;
• individuals known to the member accessing the member's account where it has poor security credentials; and
• deceased members' pension funds being diverted to an alternative bank account without the next of kin's knowledge.

The Regulator recommends that scheme administrators should:

• educate members on the importance of online security, encouraging them to ensure their pension account details are up-to-date and to turn on two step verification;
• signpost members to City of London police identity fraud guidance and the Government's "Stop! Think Fraud" guidance;
• review existing security measures and read the PASA "Protecting Identities During High Risk Events" guidance; and
• report fraud or cybercrime to Action Fraud.

Action required in next 12 months

Draft legislation on inheritance tax changes

In July the Government published draft legislation and other documentation related to its plan to bring unused pension funds and pension scheme death benefits within scope of inheritance tax (IHT) from 6 April 2027. A key change from the original proposals is that it will be the deceased's personal representatives (PRs), not scheme administrators, who will have prime responsibility for paying IHT on pension funds. However, the draft legislation makes provision for scheme beneficiaries to require scheme administrators to make IHT payments in some circumstances. For more detail, click here.

Mandatory director identity verification from 18 November 2025

The Economic Crime and Corporate Transparency Act 2023 is introducing new requirements for company directors to verify their identity with Companies House. Since 8 April 2025 it has been possible for company directors to complete their identity verification on a voluntary basis. From 18 November 2025:

• it will be compulsory for any new directors to verify their identity in order to be appointed; and
• existing directors will need to confirm they have verified their identity at the same time as they file their next annual confirmation statement;
• identity verification requirements will start to apply to a "person with significant control" (PSC) with the specific deadline depending on whether the PSC is also a director and, if that is not the case, on the individual's birth month.

UK Finance guidance on failure to prevent fraud offence

On 11 February 2025, UK Finance (UKF) published supplementary guidance to aid financial services firms and their legal advisors in understanding and applying the failure to prevent fraud offence. Developed with UK Finance members, this guidance complements the Home Office's guidance issued under section 204 of the Economic Crime and Corporate Transparency Act 2023, deferring to the statutory guidance in case of conflict. It includes a decision tree, examples of reasonable prevention procedures, aligned with FCA expectations, and scenarios where it's deemed unreasonable for firms to have prevention procedures. Additionally, it clarifies third-party relationships that do not constitute "associated persons" of a firm, offering 20 illustrations to exemplify various aspects of the offence. UKF emphasised that firms are not mandated to specifically consider its guidance when formulating their strategies to combat the offence.

Action required by non-UK pension scheme administrators

From 6 April 2026 all scheme administrators of a UK registered pension scheme will be required to be UK resident. HMRC's Pension Schemes Newsletter 170 set out the action which any non-UK resident persons currently registered as pension scheme administrators are required to take.

Data (Use and Access) Act 2025 receives Royal Assent

The Data (Use and Access) Act 2025 received Royal Assent on 19 June 2025. The Act will introduce a new requirement for data controllers to have a complaints procedure. It is not yet known when this requirement will come into force, though anecdotally we have heard suggestions that this may be Summer 2026.

The Act confirms that a data controller is only required to conduct a "reasonable and proportionate" search in response to a data subject access request (DSAR), putting the ICO's guidance on this issue on a statutory footing. The Act is also due to confirm that where a data controller reasonably requests more information regarding what a DSAR relates to, this "stops the clock" for the relevant time limits until the data subject provides the information. This provision is not yet in force, but based on oral comments from the Department for Science, Innovation and Technology, we expect it to come into force around December 2025/January 2026.

Other significant developments

Small pots consolidation provisions included in Pension Schemes Bill

The Pension Schemes Bill published on 5 June 2025 provides the legal framework to ensure that small dormant pension pots held by auto-enrolment schemes are transferred into "consolidator schemes". A "small" pot will broadly be a pot with a value of £1000 or less (subject to a power for the government to alter the figure following consultation). For more detail click here.

Contractual override provisions in Pension Schemes Bill

The Pension Schemes Bill contains provisions which will allow the provider of an automatic enrolment or workplace personal pension scheme to make unilateral changes to the pension scheme in certain circumstances where the contractual terms governing the scheme would not allow this. The power to make such amendments will be subject to a "best interests test", meaning that the provider concludes that the change will achieve a better outcome for the directly affected members (taken as a whole) and no worse an outcome for other members of the scheme (taken as a whole). Before a change can be made by virtue of the contractual override, it must be certified as meeting the best interests test by an independent person whose expertise meets requirements which are to be specified in FCA rules. The Government expects the contractual override provisions to take effect early in 2028.

The introduction of the contractual override test recognises that providers may sometimes recognise that scheme members would be better off in a different scheme or arrangement, but the contractual terms of the scheme may mean that the provider has no power to make the necessary changes without obtaining consent from all affected members.

Ombudsman finds professional SSAS trustee in breach of duty in multiple cases

In a previous Update we reported that the Pensions Ombudsman had upheld a complaint against a professional SSAS trustee that agreed to an investment in Cape Verde hotel accommodation without taking investment advice or considering whether the investment was appropriate. Although the investment had been made at the request of the member trustee, and the usual starting point would be that all trustees are jointly and severally liable for a breach of their investment duty, the Ombudsman ordered that liability should be apportioned 80% to the professional trustee. The Ombudsman has since decided three other cases involving the same professional trustee and very similar facts. In each case almost the whole of the member's fund was invested in a high risk investment which subsequently turned out to be worthless. In each case the Ombudsman upheld the complaint by the member and apportioned liability 80%/20% between the independent trustee and member trustee respectively.

A notable feature of the decisions was that each effectively served as a "lead case" with the Ombudsman directing that his decision applied equally to a number of other cases with very similar facts listed in a schedule to the determination (PO-28733,CAS-45541-T0B3 and CAS-78433-Y1Y8).

Our thoughts

These determinations show that in a case where the Ombudsman finds that trustees of a SSAS have breached their investment duties, the Ombudsman is prepared to apportion liability in such a way that most of the liability falls on the professional trustee. These were all extreme cases in that they involved almost all of the member's fund being invested in a single high risk investment which proved to be worthless. In a less extreme case of breach of investment duties by a trustee board comprised of member and professional trustees, it may be that the Ombudsman would hold that the member trustee should be jointly liable or bear a greater than 20% share of the liability.

Ombudsman dismisses complaints alleging inadequate due diligence by SIPP operator

The Pensions Ombudsman has dismissed two separate complaints against the same SIPP provider where the members had lost money after investing in loan notes (Ms R CAS-58612-P1X1 and Mr Y CAS-57893-P0C6). In both cases the members alleged that the SIPP provider did not carry out sufficient due diligence before allowing the loan note investments to go ahead. For more detail, click here.

Scheme's newly registered status did not mean transferring scheme should have blocked transfer

The Deputy Pensions Ombudsman (DPO) has not upheld a complaint by a member who claimed that the trustee of a transferring scheme carried out insufficient due diligence before transferring his pension fund to a SSAS which subsequently turned out to be involved in fraudulent activity (Mr N CAS-31532-G2M0).

The SSAS was established in April 2013 and the transfer was made in July 2013. The DPO found that the fact that the receiving scheme was newly established was a risk factor of which the trustee ought to have been aware. However, she did not consider that this risk factor in isolation would have been justification for blocking the transfer. The DPO noted that at the time of the transfer the member was aged over 55. This was significant because the Pensions Regulator's primary focus at the time, as set out in its "Scorpion" leaflet was members seeking to access funds at an age when this could not be done without giving rise to an unauthorised payment. The member had a statutory right to the transfer, meaning that the trustee could not have blocked it.

Our thoughts

This is one of many Pensions Ombudsman determinations illustrating that the Ombudsman will consider transfer values by reference to the standards prevailing at the time of the transfer. Where the transferring trustee was under a legal obligation to pay a transfer value, the Ombudsman will attach considerable weight to this.

Ombudsman finds trustee's due diligence on QROPS transfer in line with standards at the time

The Ombudsman has not upheld a complaint by a member against the trustee of a transferring scheme (Mr N CAS-39456-K5F1). The member had fallen victim to fraud in connection with taking a transfer to a qualifying recognised overseas pension scheme (QROPS), but the Ombudsman found that the trustee's due diligence had been in line with standards at the time (June 2014).

The trustee had received confirmation that the receiving scheme was a registered QROPS. It had recommended that Mr N seek financial advice before deciding to transfer his benefits and provided details of the Pensions Regulator (TPR), the Pensions Advisory Service (TPAS) and the FCA and two websites relating to pension transfers. It was not entirely clear whether the trustee had provided a copy of TPR's "Scorpion" warning leaflet direct to Mr N (as opposed to sending a copy solely to his financial adviser), but Mr N had signed a declaration confirming that he had read the leaflet. Mr N had a statutory right to a transfer value, meaning that the trustee had no legal basis on which to block it.

Mr N said in his Ombudsman complaint that he had been cold called about making the transfer (one of the warning signs listed in the Scorpion leaflet) but the Ombudsman found that there had been nothing to alert the trustee that any of the warning signs were present. The company initiating the transfer on Mr N's behalf had a notice issued about it on the FCA register saying that the company might be providing financial services or products in the UK without the FCA's permission. The Ombudsman's Adjudicator concluded that the unauthorised company had "cloned" the number of a genuinely authorised company and cited a very similar name to the genuine company in order to appear regulated. Had the trustee identified this, it would have raised serious concerns about the legitimacy of the transfer. However, at the time there was no requirement for the member to seek financial advice before a transfer, nor for a transferring scheme to undertake due diligence on a supposedly regulated company.

Our thoughts

This determination illustrates that when considering whether a transferring scheme is at fault for having made a transfer, the Pensions Ombudsman will take care to apply the standards prevailing at the time rather than viewing the matter through the lens of today's standards.

Civil partner's inheritance from deceased's estate was a relevant factor for death benefit decision

The Pensions Ombudsman has held that a surviving civil partner's inheritance from the deceased member's estate was a relevant factor to consider when making a decision as to who should receive a lump sum death benefit held on discretionary trusts (Mr T CAS-64304-R5R1). For more detail, see our briefing.

No duty for scheme manager to protect member from tax charges due to change in tax residency

In the case of Mr S (CAS-90949-P2D1) the Deputy Pensions Ombudsman (DPO) has held that a pension scheme manager's scope of duty does not include protecting a member from taxes incurred because of a change in tax residency.

Mr S was due to become tax resident in Spain from 1 January 2022. He requested his existing pension provider to make transfers to a SIPP. Mr S intended to draw a tax free lump sum from his SIPP before becoming tax resident in Spain. If he received the lump sum after that point, it would be subject to a 45% tax charge. Despite Mr S starting the transfer process months in advance of 1 January 2022, Mr S's pension provider failed to make the transfers in time for Mr S to draw a lump sum before then. At the point of making his Ombudsman complaint, Mr S had not drawn a lump sum, but said that any money he drew down in the future would be subject to Spanish tax.

The Deputy Pensions Ombudsman (DPO) held that the scope of a pension manager's duty did not include protecting a member from charges incurred because of a change in tax residency. This was the case even though Mr S had made his pension provider aware of the potential tax issues in advance and the pension provider had acknowledged that there had been delays in paying the transfer values. The DPO did award Mr S £500 for distress and inconvenience caused by the pension provider's delays and poor service.

Receiving scheme trustees liable for failure to provide information needed to progress transfer

The Deputy Pensions Ombudsman (DPO) has found the trustees of a receiving scheme liable for their failure to provide the information required by the transferring scheme in order to pay the transfer value (Mr Y CAS-59303-Y0Z8).

There is no statutory duty on trustees to accept transfer values, and scheme rules usually give the trustees discretion over whether to accept them. The DPO found that the trustees of the receiving scheme initially had no duty to the member. However, she found that once the trustees agreed to accept the transfer value and provide the information requested by the transferring scheme, they came under a duty to the member to carry out the necessary administrative steps to implement the agreed inward transfer with due skill and care and without delay.

Our thoughts

This is a significant determination, as it establishes the principle that, although trustees are generally under no legal obligation to accept a transfer, the Pensions Ombudsman will regard them as assuming a duty of care to the member if they agree to do so. That means that the receiving scheme can be liable to the member for any loss suffered if the transfer is delayed due to the receiving scheme trustees failing to carry out the necessary steps in a timely manner. In the case before the Ombudsman, there was a delay of over a year in providing the routine information requested by the transferring scheme. It remains to be seen whether the Ombudsman will order receiving scheme trustees to pay compensation in cases of less extreme delay.

Ombudsman orders trustees to correct underpayment

The Pensions Ombudsman has ordered the remaining Member Trustees of a SSAS to authorise a payment correcting a shortfall in respect of a transfer value taken by another member of the SSAS (Mr N CAS-49148-R5W6).

Mr N took a transfer from his SSAS to another scheme. Following payment of the transfer value, it emerged that the Independent Trustee of the SSAS had incorrectly calculated the fund split between the members, and that Mr N's transfer value should have been approximately £25,000 higher. The Independent Trustee asked the remaining Member trustees of the SSAS to authorise payment of the shortfall to Mr N's new scheme, but they refused to do so, believing that the Independent Trustee should itself fund the shortfall payment.

Following a complaint from Mr N, the Pensions Ombudsman ordered the Member Trustees and the Independent Trustee to authorise payment of the shortfall to Mr N's new pension arrangement.

Our thoughts

The Ombudsman's decision in this case is unsurprising. It reflects the principle that an incorrect statement will not normally result in members acquiring a right to the incorrectly stated benefit.

Trustee ordered to pay over £50,000 following lump sum death benefit delay

A failure to pay a lump sum death benefit within two years of notification of the member's death has resulted in a trustee being ordered to pay over £50,000 to the nominated beneficiary who lost out as a result (Mrs L CAS-66581-S4T8). For more detail, click here.

Member awarded £1000 for administrator's failings re provision of annual allowance statement

A member has been awarded £1000 for distress and inconvenience relating the scheme administrator's failings relating to provision of pensions saving statements for annual allowance purposes (Dr S CAS-60994-H2H2). The Ombudsman found that the scheme administrator's failure to provide information in accordance with a commitment given to members amounted to maladministration notwithstanding that there was not actually a legal obligation to provide the information. For more detail, see our briefing.

Scheme not in breach of duty re tax consequences of UFPLS

The Ombudsman has not upheld a member's complaint where the member regretted his decision to take the whole of his pension fund as an UFPLS and wished to reverse his decision (Dr D, CAS-70911-G6X6). The member had not appreciated that after age 75 he could continue to invest his pension fund without withdrawing it, and that taking the whole of his fund as a lump sum would result in tax being levied on it at the highest rate. The member argued that his pension provider should have telephoned him and made sure he was aware of what he was doing and been more proactive in warning him about the lump sum being taxed at the highest tax rate. The Ombudsman did not uphold this aspect of the member's complaint.

The Ombudsman noted that the form signed by the member contained numerous warnings. It specifically stated, "this option has no cancellation rights – once we've made the payment to you it can't be reversed and paid back to us". The form recommended that members seek advice from a financial adviser if they weren't sure that they were picking the right option. It specifically warned that the tax paid on a lump sum might take the member into a higher tax bracket.

Our thoughts

This case illustrates the importance of clear and specific warnings to members about the tax consequences of taking an UFPLS and the fact that they cannot reverse their decision once the lump sum has been paid.

Court holds FSCS entitled not to reopen compensation awards

In the case of R (Chong and others) v Financial Services Compensation Scheme Ltd the High Court has rejected a legal challenge to the FSCS's policy of not reopening compensation claims where it had already paid compensation based on its understanding of the law before the Court of Appeal's decision in Adams v Options UK Personal Pensions LLP.

The claimants were SIPP members who asserted that they had been wrongly advised to invest their funds in high risk investments. The value of the investments was subsequently found to be so uncertain that the FSCS considered that no value at all should be attributed to them. In February 2021 the FSCS paid compensation to the claimants on a "monies in, monies out" basis so that the original investments were refunded together with any fees incurred.

On 1 April 2021 the Court of Appeal handed down judgment in Adams v Options UK Personal Pensions LLP. A consequence of that decision was that the SIPP provider (and so ultimately the FSCS) might be liable not just on a monies in, monies out basis but also for any loss caused by transferring out of the funds in which the pension funds had originally been invested. On 15 April 2021 the claimants lodged appeals against their compensation awards. However, the FSCS adopted the position that it would not reassess claims which had already been assessed before 1 April 2021. Nor would it assess appeals lodged after 1 April 2021 which related to the matters covered in the Adams judgment.

The High Court rejected the claimants' application for judicial review. The judge rejected arguments that the FSCS's conduct following the Adams judgment had created a "legitimate expectation" that it would reopen compensation cases decided before 1 April 2021.

Upper Tribunal dismisses appeal where scheme administrator failed to question valuation

In August 2024 we reported on the First-Tier Tribunal's decision in Morgan Lloyd Trustees Limited v HMRC in which the First-Tier Tribunal (FTT) dismissed a scheme administrator's appeal against a scheme sanction charge. The FTT found that the scheme administrator had failed to apply "commercial common sense" to the question of whether valuations of property used to secure loans by the pension scheme were realistic. In March 2025 the Upper Tribunal (UT) dismissed an appeal in the case on almost all grounds. The UT agreed with the FTT that a reasonable administrator would apply commercial common sense to any valuations received. (The only grounds on which the appeal succeeded related to two specific contracts where the UT found that the FTT had reached an overly narrow interpretation of the property that was the subject of the contract and remitted the cases back to the FTT for further consideration.)

Court makes order to allow enforcement of judgment debt against member's personal pension scheme

In Century Property (Leeds) Ltd v Eville & Jones (Group) Ltd the High Court has made an order against a SIPP member requiring a member to take a lump sum from his SIPP on reaching his 55th birthday to enable enforcement of a judgment debt against the member's pension fund. The order was also made against the professional trustee of the SIPP, which had not taken part in the proceedings. For more detail, click here.

Court rules on procedure for enforcing judgment debt against personal pension scheme

In the case of Zubarev v Singh the High Court has handed down an important judgment regarding the circumstances in which a "third party debt order" (TPDO) can be made to require a pension provider to pay benefits to a member's creditors. Broadly, a TPDO is a type of order that can be made to assist a creditor to enforce a judgment debt. Under a TPDO the court can require a third party who owes money to the debtor to instead pay that money directly to a creditor of the debtor.

The judge held that a TPDO should not be made unless there is actually a debt owing from the third party to the debtor at the point the order is made. The court should not make a TPDO in anticipation of a debt becoming due at some point in the future (even if the court is itself making an order which will give rise to a future debt, eg by ordering a scheme member to draw his pension benefits).

Our thoughts

In the context of a pension scheme, this means that a court should not make a TPDO against a pension provider at a point where the provider is holding non-cash assets and decisions will need to be made about realisation of those non-cash assets in order for the funds to be paid from the scheme. Nor should a court make a TPDO in a case where the pension provider has a discretion over whether to pay funds to a member, rather than the member being entitled to them as of right.

The court's power to make a TPDO against a pension provider should not be confused with the court's power to make an order requiring a member to draw benefits from the member's SIPP.

Parties bringing data protection claims not required to show misuse

The Court of Appeal has held that it is not essential for a party bringing a data protection claim to show that the data was misused (Farley and others v Paymaster (1836) Ltd).

The Court was hearing an appeal against a High Court judgment which struck out more than 400 claims made by police officers for breaches of data protection law. The claims related to an incident in August 2019, in which about 450 annual pension benefit statements containing the personal details of current and former police officers were sent to their out-of-date addresses by the defendant, the administrator of the relevant police force's pension scheme.

14 of the claimants could show an arguable case that the envelope containing their statement had been opened and the statement read. The High Court had struck out the claims of the other 432 claimants, who had not produced evidence that their statement had been opened and read by a third party.

The Court of Appeal allowed the appeal and remitted the case to the High Court for each claimant's claim to be assessed on a case-by-case basis. It held that it was not necessary for the claimants to show that anyone actually read the statements sent to the wrong addresses, nor was it essential for the claimants to prove distress in order to bring a successful claim.

While this decision is a victory for the appellants, it does not change the key principle about class actions: each claimant's loss must be assessed on a case-by-case basis. A class action cannot claim the same amount for each member of the class. This means that (as in this case), the costs of bringing the claim are likely to exceed the modest amount of damages that may be awarded.

Tribunal holds SIPP withdrawals exempt under UK-Portugal Double Tax Convention

The First-tier Tribunal (Tax Chamber) (FTT) has ruled that withdrawals from a UK SIPP by a member who had become resident in Portugal were exempt from UK taxation by virtue of the UK-Portugal Double Tax Convention (Masters v HMRC). In 2016 the scheme member had taken a cash equivalent transfer value (CETV) from his defined benefit scheme to a SIPP. The member's benefits in the defined benefit scheme had accrued over several decades of employment with a large supermarket chain. In 2019 the member became resident in Portugal and qualified for its non-habitual resident scheme which at that time exempted foreign source pension income from Portuguese taxation.

The key issue before the FTT was whether the SIPP withdrawals were "paid in consideration of past employment" under the Convention, which would mean they were taxable only in Portugal as the member's state of residence. The FTT found that the SIPP withdrawals were "paid in consideration of past employment" because there was sufficient causal connection between the withdrawals and the member's employment with the supermarket chain. The FTT found that the transfer to the SIPP did not break the causal connection. It took into account that the CETV was the only contribution to the SIPP and that the funds had only been in the SIPP for four years before the withdrawals were made.

Upper Tribunal upholds use of discovery assessment powers

The Upper Tribunal has dismissed an appeal in Trachtenberg v HMRC, confirming that HMRC has the power to use its discovery assessment powers under section 29 of the Taxes Management Act 1970 (TMA) in relation to unauthorised payments charges and surcharges under sections 208 and 209 of the Finance Act 2004. The appellant had raised technical legal arguments as to why HMRC could not use its discovery assessment powers in such circumstance, but the Upper Tribunal rejected the arguments, noting that accepting the appellant's arguments would render the legislation unworkable.

Government announces "Leeds Reforms"

On 15 July 2025 the Government announced the "Leeds Reforms", a package of measures aimed at boosting the financial services sector. For our thoughts on what the measures mean for SIPP operators, see our e-bulletin.

FCA targeted support consultation

On 30 June 2025, the FCA published a consultation paper (CP25/17) on proposals for a new form of support, referred to as targeted support, for consumers' pensions and retail investment decisions. The FCA is progressing its proposals for targeted support for pensions and investments, initially consulted on in CP24/27. These proposals, part of the wider Advice Guidance Boundary Review (AGBR), aim to assist groups of consumers with shared characteristics in making key decisions. Targeted support would be more bespoke than current guidance-based services but more general than advice provided on an individual basis The proposed model would see people receive suggestions developed for a group of similar consumers rather than based on the individual's detailed circumstances (as would be the case with holistic advice). The aim of this proposal is to help close the advice gap and boost access to financial support across the UK. The consultation closed on 29 August 2025.

On 26 September 2025 the FCA published consultation paper CP25/26 on proposed changes to the FCA Handbook to ensure that its targeted support proposals work effectively with existing requirements. The proposed changes include clarifying that relevant pension scheme operators must signpost targeted support in their annual statements, and include charges in relation to targeted support in the written statement accompanying costs and charges information. The consultation closes on 17 October 2025.

The FCA plans to publish a policy statement and final rules in December when it will respond to feedback from both CP25/17 and CP24/25.

FCA consults on rule change to clarify FOS jurisdiction

The FCA has consulted on proposed changes to its Handbook rules dealing with who is eligible to make a complaint to the Financial Ombudsman Service. For an individual to be an eligible complainant, the complaint must arise in relation to a relationship with the respondent that is of a type listed in the Handbook rules. These include that the complainant is a beneficiary of or has a beneficial interest in a personal pension scheme (or stakeholder scheme). The proposed new rule will spell out that this includes a complaint where the complainant has an indirect relationship with the respondent, for example where the complaint arises from the respondent's obligations to the trustee or operator of the scheme and the performance of those obligations impacts on the rights or situation of the complainant as a scheme beneficiary. An example of such an indirect relationship would be where the respondent is a platform provider providing services a SIPP operator and a scheme beneficiary wishes to make a complaint directly against the platform operator.

FCA review of treatment of customers in vulnerable circumstances

In March the FCA published a web page setting out the findings of its review of how firms are supporting customers in vulnerable circumstances. The FCA found many examples of positive actions, with the Consumer Duty leading to a renewed focus in this area. It identified the following as areas for improvement:

• outcomes monitoring;
• failure to give appropriate support, including supporting staff in identifying customers in vulnerable circumstances;
• failure to communicate clearly to meet the needs of customers in vulnerable circumstances, and a lack of testing of consumer understanding; and
• lack of tailored training and embedding consumers' needs into product and service design.

Removal of requirement to appoint Consumer Duty board champion

In February the FCA announced that with effect from 27 February 2025 it would no longer expect firms to have a "Consumer Duty board champion", instead leaving it up to individual boards whether to have this role.

FCA and PRA abandon diversity and inclusion proposals

In March 2025 the FCA and the PRA announced that they were no longer planning to publish new rules on diversity and inclusion. The FCA and PRA had published a joint consultation in 2023 aimed at boosting diversity in financial services.

FCA review of life insurers' pension transfer process

In August the FCA published the findings from its review of life insurers' pension transfer processes. The review focused on life insurers' pension schemes regulated by the FCA, including SIPPs operated by life insurers, but did not include trust-based occupational schemes or SIPPs operated by parties other than life insurers. The FCA's expectations of firms are that:

• they avoid causing foreseeable harm from poor or slow service;
• they should consider whether they need to build "positive friction" into their processes to protect consumers from harm such as scams;
• they should regularly review the information they use to decide when additional checks are required on a transfer;
• they should be able to evidence how their practices are working to deliver good customer outcomes; and
• they should have sufficient resources to be able to respond to foreseeable spikes in demand.

FCA findings re digital design in customers' online journeys

The FCA has published its findings on "the design of digital acquisition journeys and customer outcomes". The findings of its review relate to consumer credit providers only, but the FCA highlights good and poor practice which might be of interest more broadly to firms with a digital presence.

Examples of good practice include:

• designing "digital journeys" to meet the needs of different customer groups within the firm's target market; and
• including frontline agents in the design of digital journeys and support, allowing them to provide feedback based on customer interaction.

Areas for improvement include:

• bias in layouts, eg by having pre-selected defaults that nudge customers in a particular direction; and
• prioritising speed in a way which may lead customers to act against their own interests.

ICO guidance on anonymisation of data

In March 2025 the ICO published guidance on anonymisation of data. The ICO makes a key distinction between "anonymised" data and "pseudonymised" data. Data protection law doesn't apply to anonymised data, but the bar for data to be classed as anonymised is high. The ICO says that data controllers should apply a "motivated intruder" test when considering whether data is anonymised, ie could a competent, motivated person who gets hold of the data work out which individuals it relates to? If the "motivated intruder" could link that data back to an individual then the data is not anonymised for the purposes of data protection law.

The guidance does not contain any pensions-specific examples, but applying the principles in a pensions context, just blanking out names in a table of scheme member details will not be sufficient for that data to be classed as anonymised if there's sufficient other data available that a "motivated intruder" could link the data back to the member. In applying this test, it is necessary consider all the different resources that would be available to the motivated intruder, eg social media, HM Land Registry searches, the electoral roll etc.

The guidance says that people often refer to data being "anonymised" when it is "pseudonymised", ie presented in a way that you would need additional information to link the data back to the individual (eg a data set refers to individuals by reference numbers rather than names, and the list of reference numbers is stored separately). The ICO guidance recognises that pseudonymisation can be a valuable tool in protecting member data. However, it makes clear that data protection law still applies to "pseudonymised" data.

PTM amendment clarifies drawdown rules

In March 2025 HMRC amended its Pensions Tax Manual (PTM062701) to say that in order for a member to designate sums and assets as available for drawdown, the scheme must be capable of making a payment of income withdrawal to the member. A payment of income withdrawal does not have to be made, but it must be possible.

HMRC and FCA warning: PCLS tax consequences cannot be undone

HMRC and the FCA have simultaneously issued publications warning that the tax consequences of taking a lump sum cannot be reversed by repaying the lump sum to the scheme. Confusion has arisen because FCA rules allow consumers to cancel certain types of pension contract, namely a contract to join a personal pension scheme or to transfer a pension fund. If a transaction is cancelled in circumstances where mandatory cancellation rights apply, the tax consequences can be reversed. However, FCA rules do not require pension providers to allow a member to cancel a pension commencement lump sum or uncrystallised funds pension lump sum (UFPLS). Therefore once such a lump sum is paid, the associated tax consequences (including use of the individual's lump sum allowance and lump sum death benefit allowance) cannot be undone even if the lump sum is returned to the scheme.

PASA Guidance on Identity Management and Assurance

PASA (the Pensions Administration Standards Association) has published new guidance on Identity Management and Assurance. "Identity management" refers to the, processes used to ensure that only the right people are granted access to services and resources. "Identity assurance" refers to the process of being sure individuals are who they say they are. The guidance focuses on the interactions likely to pose the most risk of fraud in relation to members' pension pots, and highlights identity and assurance practices to counter those risks. The guidance highlights the payment of transfer values, the point at which a member starts to take benefits, and the death of a member as points at which there is a particularly high risk of fraud.

ABI calls on Government to back private sector dashboards

In June the ABI published a report calling on the Government to urgently reaffirm its commitment to enabling a private sector pensions dashboards market. The ABI describes the Government-backed MoneyHelper dashboard as a "welcome step" but argues that relying on a single state-owned dashboard will fall short of the predicted impact.

Ban on upwards-only rent reviews

The English Devolution and Community Empowerment Bill contains a ban on upwards-only rent review provisions in new commercial leases, though the changes aren't expected to take effect until 2027. For more detail, see our briefing.

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