UK Pensions: Joint DB And DC Trustee Agenda—August 2026

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UK pension trustees face significant regulatory changes in 2026-2027, from inheritance tax requirements and VAT guidance updates to new dashboards reporting obligations and Value for Money frameworks. How will these reforms reshape scheme administration, funding strategies, and compliance priorities for defined benefit and hybrid pension schemes?

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Welcome to our monthly update on current legal issues for trustees of DB and hybrid pension schemes, designed to help you stay up to date with key developments between trustee meetings and to support the legal update item on your next trustee agenda. We also have a separate DC-only briefing.

HMRC: details on IHT changes

HMRC has published a technical note giving more details on the application of inheritance tax (IHT) to pensions. Regulations on the exchange of information between personal representatives and pension schemes have been finalised. Further guidance and tools will be provided by spring 2027. Our briefing provides an overview of the changes.

Action: Start preparing for significant changes needed to comply with the new IHT requirements.

Pension Schemes Act—Royal Assent plus details of proposals and timing

The Pension Schemes Act 2026 has received Royal Assent, laying the groundwork for a range of significant changes to the UK pensions landscape. A revised roadmap setting out timelines for the implementation of the changes has been published, alongside various related documents:

A policy paper and draft legislation to allow direct surplus payments to members to be treated as authorised for tax purposes (see below)
A consultation on the Value for Money framework (see below)
A DC scale requirements discussion paper
Principles for guided retirement

The Pensions Regulator (TPR) has published a new web page summarising the changes introduced by the Act and how to prepare.

Action: Most areas require a watching brief for now, pending further regulations.

Updated VAT guidance

HMRC has made significant updates to VAT Notice 700/17 (its guidance note for employers and trustees on recovering input tax on the costs involved in running DB occupational pension schemes). The updates follow a policy change in June 2025 and updates to its VAT input tax manual.

Action: Review the guidance and, if appropriate, take tax advice on current arrangements.

TPR: latest Annual Funding Statement

TPR’s latest Annual Funding Statement (AFS) focuses on endgame planning and current risks and provides guidance on employer covenant, supportable risk and low dependency.

Action: Review the AFS and note further clarifications about TPR’s assessment of current risks and uncertainties and clarifications of its expectations on scheme funding.

New guide for DC wake-up packs

The Money and Pensions Service (MaPS) has published a redesigned guide to be included in “wake-up” packs for DC members.

Action: Include the new guide in wake-up packs

TPR: dashboards updates

TPR has updated its dashboards guidance to answer common questions, highlight best practice, and to add two checklists to help schemes prepare. The Pensions Dashboards Programme (PDP) has confirmed a revised timetable for new daily dashboards reporting requirements.

Action: Consider the guidance as part of dashboards compliance projects and ensure preparations are being made for daily reporting.

Company accounts reforms

The government has announced that accounts reforms will come into effect from April 2028.

Action: Corporate trustees should review whether they are impacted by the changes.

TPR publishes AI plan

TPR has published an AI plan, outlining expectations for the adoption and governance of AI. TPR expects trustees and administrators to establish robust governance and accountability for the use of AI systems and technologies, to understand how AI models use and process data, and to seek advice when required.

Action: Consider the implications of the plan for your scheme. More detailed guidance is to follow.

Have your say

A consultation on draft regulations setting out new conditions for the payment of DB scheme surpluses to employers closes on September 2, 2026. A separate consultation on allowing direct surplus payments to members to be treated as authorised for tax purposes closes on September 7, 2026.
A consultation on draft Value for Money regulations has been launched, including phased implementation and more lead-in time. The consultation closes on September 7, 2026.
A consultation on changes to the General Levy has been launched, closing at midday on September 8, 2026.
HMT is consulting on reforms to the ring-fencing regime, including a proposal allowing ring-fenced banks’ DB schemes to share surplus. This consultation closes on September 8, 2026.

Watch this space

The government intends to consult in the coming months on issues around transfer advice.
The government is developing guidance for trustees on their fiduciary duties.
The Pensions Minister recently announced that the government intends to review the legislation around Flexible Apportionment Arrangements (FAAs) “in due course”.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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