Pensions Weekly Update

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Here is our weekly summary of key legal and regulatory developments relevant to occupational pension schemes that you might have missed, with links for further information.

The Institute for Fiscal Studies (IFS) has issued the final report of its Pensions Review, which was launched in April 2023. The review explores the many challenges of the UK pensions system, including the “generously indexed” state pension (which has an unpredictable impact on government spending) and inadequate private pensions savings. Among the IFS proposals:

The government should set a target level for the state pension, expressed as a percentage of median full-time earnings. The state pension would increase annually at least in line with inflation. The state pension proposals would not necessitate an immediate move away from the triple lock.
The auto-enrolment regime would be extended to cover employees aged 16-74. Employers would contribute at least 3% of their employees’ earnings between £4,000 and the higher-rate income tax threshold (which is currently just over £50,000), regardless of whether the employee pays any contributions. A higher minimum default contribution would apply to those earning above the national average, to lessen the fall in income faced by many middle and higher earners when they retire.
For the self-employed, pension contributions could be linked to the self-assessment tax return system.

However, it was reported in the Financial Times that pensions minister Torsten Bell has ruled out an increase in auto-enrolment contributions during this parliament.

The IFS report comes ahead of the chancellor’s Mansion House speech on 15 July. It is expected that the chancellor’s speech will address the long-awaited review of pensions adequacy.
The Pension Schemes Bill had its second reading in the House of Commons on 7 July 2025 and was debated for over three hours. It was preceded by the publication of a briefing paper on the bill, along with new briefing papers on collective defined contribution schemes and defined benefit superfunds. A government press release issued on the same day as the second reading stated that measures in the bill could see workers’ pension pots grow by up to an estimated £29,000. This would be as a result of assuming greater investment performance through addressing underperformance and increasing diversification, reducing costs that could be passed onto savers and by investing for longer. The next stage is that the bill will be reviewed by a public committee of the House of Commons. This involves a line-by-line examination of the bill, with each clause being approved, amended or removed. The first sitting of the committee will be on 2 September, and it is expected to report back to the House of Commons by 23 October. You can submit your views on the bill in writing to the committee at any point up until it concludes its consideration of the bill, but the earlier the better.
The Pensions Regulator (TPR) has said in a press release that it will work with industry stakeholders, advisers and professional bodies to develop and test a voluntary net zero transition plan template fit for occupational pension schemes, drawing on the work of the UK Transition Plan Taskforce. This follows on from a consultation published by the Department for Energy Security and Net Zero on transition plans. The consultation is relevant to pension funds. It includes questions for pension funds around their views on how any new transition plan requirements should integrate with the existing reporting requirements for larger pension schemes in relation to climate change (which the Department for Work and Pensions (DWP) has said it will review during 2025) and to what extent schemes already produce transition plans. Consultation closes on 17 September 2025.
Paul Neville, executive director of digital, data and technology at TPR has issued a blog outlining the role of the new Pensions Data and Digital Working Group, which will be launched this autumn. Expressions of interest are invited from across the pensions industry and from other parties who can offer a fresh perspective.
In this blog post, David Whincup considers what it means in practice for an employer when considering alternative employment for a redundant employee.