Pensions Weekly Update – 30 September 2025 | Publications | Insights & Events

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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 Pension Protection Fund (PPF) has confirmed in a press release that it will not charge a conventional levy for the 2025-2026 levy year. The PPF had originally set the levy estimate at £45 million, which is the lowest amount that it had considered it would be prudent to set while legislation restricts the PPF from raising the levy by more than 25% year on year. The PPF has said that measures contained in the Pension Schemes Bill provide greater flexibility to set the levy, enabling the PPF to move to zero levy, while preserving its ability to reinstate the levy in future if it were ever needed.
HM Revenue and Customs (HMRC) has published newsletter 173. The newsletter confirms the position if a pension scheme member wants to reverse a tax-free lump sum. HMRC has clarified that the tax consequences of returning a pension commencement lump sum or uncrystallised funds pension lump sum can never be reversed. There had previously been some confusion regarding the right to cancel that arises in relation to certain types of contracts under the Financial Conduct Authority’s (FCA) rules, and whether this right to cancel could apply to tax-free lump sums. It is significant because where a contract is cancellable under FCA rules, tax consequences may be undone. HMRC has confirmed that a contract allowing a person to take a pension commencement lump sum or uncrystallised funds pension lump sum is not a cancellable item under the FCA’s Conduct of Business Sourcebook. This is the case even where a lump sum is part of a wider contract that is cancellable. Therefore, if a provider nonetheless permits cancellation of the lump sum element, the associated tax consequences (including the use of the individual’s lump sum allowance and lump sum death benefit allowance) cannot be undone, even if the payment is returned or cancellation rights are exercised. The newsletter also confirms that HMRC will be making some minor technical amendments to the legislation dealing with the abolition of the lifetime allowance. It says that the “changes are designed to clarify certain provisions, correct minor drafting inconsistencies and support smoother implementation”. The regulations are planned for early 2026 and, when introduced, will have retrospective effect from 6 April 2024.
The FCA has issued a consultation on proposed changes to its handbook rules to implement the targeted support framework. Consultation closes on 17 October 2025. Final rules and a policy statement are expected in December 2025. The FCA’s pre-application support service has opened for firms planning to apply for targeted support permissions.
Dr Marion Lean, Head of Innovation and Design Practice at The Pensions Regulator (TPR), has published a blog post on a recent innovation event attended by more than 50 industry leaders. TPR urges pensions professionals to keep checking its online pages for further events, resources and opportunities to collaborate, as well as to share ideas. A person or organisation in the early stages of developing a new pensions idea or solution can request an innovation discussion session with TPR.
The Society of Pension Professionals (SPP) has published a paper examining the case for defined benefit (DB) and Collective Defined Contribution (CDC) pension schemes in the modern pensions landscape. The paper contains thought leadership that should prove useful to policymakers, particularly in light of the review that is currently underway by the Pensions Commission.
Chris Curry, Principal of the Pensions Dashboards Programme shares his experience of user testing the MoneyHelper dashboard – a process which he found to be “both professionally satisfying and personally enlightening”.
This is a reminder that you can register for a webinar being hosted by our Labour & Employment law colleagues on 8 October, which will take a look at when the duty to make reasonable adjustments is triggered and how far employers must go.