7 Days is a weekly round up of developments in pensions, normally published on Monday mornings. We collate this information from key industry sources, such as the DWP, HMRC and TPR.

In this 7 Days

DWP publishes updated workplace pensions roadmap

On 13 July 2026, the DWP published an updated workplace pensions roadmap setting out “overarching aims for reform”. It contains more detail on some of the expected steps to develop the various policies as well as a revised timeline.

Key changes include:

  • VFM – a phased approach to implementing the VFM framework, with smaller schemes not required to complete full assessments until 2029 (see our Alert for details)
  • guided retirement – implementation of the guided retirement framework has been pushed back to better align with the introduction of retirement CDC. The guided retirement rules will apply to master trusts and in-scope FCA-regulated schemes by the third quarter of 2029 rather than 2027, with the deadline for single-employer schemes and schemes using retirement CDC defaults pushed back to the third quarter of 2030 rather than 2028. Consideration is also being given to introducing a “targeted and time-limited extension” to schemes who are committed to pursuing retirement CDC as a default pension option, to allow the retirement CDC scheme to become operational before beginning to default members into it. This is expected to be consulted on in the autumn
  • surplus – the new DB surplus flexibilities will come into force on 6 April 2027 (earlier than anticipated), as expected following the DWP’s recent consultation, and
  • superfunds – the DWP is allowing more time before consulting on the draft regulations for the DB superfunds regime. The consultation is expected to be published in early 2027, although the full regime is still scheduled to come into force in 2028.

The Government is continuing to work through the interaction between the scale requirements, VFM and the “contractual override” allowing pension providers to transfer pension pots to another scheme without the relevant member’s consent. As such, the plans set out in the roadmap are a “best estimate”.

Alongside these reforms, other developments include a consultation on guidance on trustees’ fiduciary duties related to investment decision-making, which is expected in summer 2026. The DWP is also considering feedback received to its December 2025 consultation on trustees and governance, although no timing is given for the response to be published.

HMRC consults on legislation to introduce new authorised member surplus payments

Building on the DWP’s June consultation on new conditions for releasing surplus from an ongoing DB scheme, HMRC has published draft legislation (together with a policy paper) designed to introduce new “authorised member surplus payments”.

The Government’s original surplus flexibility proposals considered the possibility of allowing trustees to make one-off lump sum payments to members without baking in long-term liabilities. However, such payments are currently unauthorised under the pensions tax rules. The draft legislation would enable direct surplus payments to members to be treated as authorised where certain conditions are met, with the payments treated as pension income in the hands of the recipient and taxed accordingly.

The deadline for providing feedback on the draft legislation is 7 September 2026, with the final legislation expected to come into force on 6 April 2027. See our Alert for details.

Joint consultation on detailed VFM proposals published

Setting out a “detailed proposed approach” to VFM, the DWP published a consultation on 13 July 2026, along with draft regulations and draft FCA rules. This is the latest step in joint work by the FCA, the DWP and TPR towards the new market-wide VFM framework (the “Framework”).

The consultation provides responses to the joint consultation held earlier this year. It seeks views on the policy in respect of FCA-regulated schemes, and sets out and seeks views on the policy in respect of TPR-regulated schemes. The Framework will be implemented in phases, with all in-scope schemes having to submit data in 2028, but only master trusts, larger single employer schemes (50,000 or more members) and multi-employer contract-based default arrangements being required to undertake a full assessment and ratings in that year.

The deadline for responses is 1 September 2026, and final regulations and FCA rules are promised in early 2027. See our Alert for details.

DWP consults on changes to the general levy

On 14 July 2026, the DWP published a consultation on proposed changes to the structure and rates of the general levy on occupational and personal pension schemes for the period April 2027 to March 2030. The general levy funds TPO, the core activities of TPR, and part of the functions of MaPS, with the levy rates set out in regulations and subject to review by the DWP.

The consultation follows the 2026 review of the levy which identified a “structural funding gap” with “persistent annual deficits” likely to increase as reforms under the PSA26 add to the scale and complexity of what the system needs to deliver. The proposed changes include gradually equalising DC, master trust and personal pension scheme rates towards the higher rates paid by DB and hybrid schemes. This aims to help ensure the levy “remains fair, sustainable, and aligned with the changing pensions landscape”.

The consultation closes on 8 September 2026. Possible wider structural reform of the levy will be considered separately, in consultation with the industry.

DWP publishes discussion paper on key elements of the new scale requirements

On 13 July 2026, the DWP published a discussion paper on key elements of the DC default arrangements scale policy.

The scale threshold is set to be introduced in April 2030 and will require authorised master trusts and GPPs which are used by employers to meet their AE obligations to have assets of at least £25 billion in a single main scale default arrangement (“MSDA”). The requirement will apply at arrangement level since “this is where strategic decisions on investments are made”, and how assets are held matters in “delivering the key benefits” of scale, such as investment sophistication and lower costs for members.

A scheme with an MSDA of £10 billion may be approved to be on the transition pathway if it is on track to meet the £25 billion requirement by 2035. An alternative pathway for new entrants to the market meeting certain requirements aims to help promote competition and innovation. A scheme that is not on one of these pathways or approved as having an MSDA of £25 billion will no longer be able to be used to receive new AE contributions.

The assets that make up a scheme’s MSDA must be managed under a common investment strategy (“CIS”), allowing for variance by age to accommodate lifestyling and target date fund strategies. This aims to ensure that the assets will be invested in a sufficiently common way to drive the benefits of scale. Connected schemes will be able to “share” an MSDA in certain circumstances where the assets held within it are managed under the same CIS.

The discussion paper seeks views on various aspects of how these key elements of scale will be structured. In particular, the DWP is interested in the operation of default arrangements and investment strategies in multi-employer DC schemes and the connections between schemes that exist within a provider’s corporate group.

The discussion paper runs for 8 weeks, ending on 7 September 2026. Responses will help inform the DWP’s development of detailed regulations, which are expected to be consulted on in 2027.

DWP publishes principles for guided retirement

On 13 July 2026, the DWP published a policy paper setting out principles for default pensions under the new guided retirement requirements, a “central part” of the Government’s reform agenda. The paper outlines the outcomes default pensions should achieve, including:

  • no requirement for complex decision-making by the member
  • protection against longevity risk
  • freedom of choice, so that members can choose alternative options if they wish
  • consent, with members needing to agree to start receiving payment via the default pension which the Government sees as “an opportune time to maximise engagement to fully explain” the default and alternative options.

The principles will help shape the detailed framework for guided retirement, including regulations, guidance and industry engagement. The FCA is required to introduce rules which so far as possible achieve the same outcomes, and so the principles are intended to apply across the whole of the market.

TPR publishes corporate strategy and plan and pensions reform roadmap

On 14 July 2026, TPR published its new five-year corporate strategy, detailed corporate plan and roadmap supporting the implementation of the Government’s pensions reform agenda. The corporate strategy focuses on a “clear vision” that people have a “sustainable income in retirement, supported by a pensions system that provides security and value for all”. To achieve this, TPR has identified three focus areas: raising governance standards, driving value for money, and improving sustainable outcomes at retirement.

The new pensions reform roadmap outlines “when industry will need to engage, comply and deliver for members” and dovetails with the Government’s updated roadmap (see above).

HMRC publishes VAT Notice 700/17

Following updates to its VAT Manual in June 2026 (see our Hot Topic for details), HMRC has revised its guidance about how and when employers and trustees can claim input tax in relation to funded DB pension schemes in VAT Notice 700/17. It sets out the types of services for which input tax could be recovered and the evidence needed.

Asset allocation data published

TPR has published analysis examining asset allocation across DC master trust main default funds during the accumulation phase, as at 31 December 2025. This covers 25 master trusts and £207.7 billion of assets across 38 default arrangements. Findings include that equities and bonds make up 88% of default assets, with the allocation shifting from equities to bonds as members approach retirement. Around 60% of master trusts have some unlisted private market exposure, with around 20% having at least 5%.

The FCA has also published asset allocation data collected from a similar survey covering a significant proportion of the contracted-based workplace DC default arrangement market. This survey helped inform the latest VFM consultation by “testing a simplified version of the proposed asset allocation reporting requirements”. Responses highlighted practical issues that could affect the consistency and comparability of reporting across providers, which the consultation aims to address through asset class definitions.

Information sharing regulations for IHT changes made

Following a short technical consultation, the information sharing regulations to facilitate the pension IHT changes have been made. As a result of feedback received, some amendments have been made to “ensure the requirements are clear, proportionate and deliverable alongside existing processes used by scheme administrators and insurance companies”. In particular, the requirement for pension scheme administrators to report all death in service payments to HMRC has been removed. Instead, personal representatives are only required to report this information in cases where an IHT account is due. The regulations will come into force on 6 April 2027, at the same time as the tax changes take effect.