Ill-health benefits

Ill-health benefits

Ill-health early retirement

Ill-health may prevent a person from working until their normal retirement date. The trust deed and rules of occupational pension schemes usually contain provisions allowing scheme members to claim their pension benefits early in such circumstances regardless of the member's age, although this is usually subject to the production of medical evidence.

In defined benefit schemes, an early retirement pension granted on grounds of ill-health may be calculated on a basis that is more favourable than for members who retire early on other grounds. For example, while it is common for an early retirement pension to be reduced on account of the fact that the pension is to be paid early and therefore for longer, such a reduction will often not be applied where the early

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Latest Pensions News

Upper Tribunal confirms HMRC’s power to issue assessments under TMA 1970 regarding pension scheme unauthorised payments (Trachtenberg v Revenue and Customs Commissioners)

Pensions analysis: Mr Trachtenburg (‘A’) appealed against the decision of the FTT, upholding HMRC’s assessments under section 29 of the Taxes Management Act 1970 (TMA 1970), charging him to income tax under sections 208 and 209 of the Finance Act 2004 (FA 2004). The sole issue was whether HMRC have power to issue assessments under TMA 1970, s 29. A contended: First, that the pension provisions in FA 2004 were comprehensive, the TMA 1970 does not enable HMRC to assess in the in the absence of any express application by FA 2004, s 255 or regulations issued under it, put beyond doubt by section 255(3)(b), which states that regulations under section 255 ‘may…provide for the application of any provision of the Tax Acts (with or without modification)’, unnecessary words otherwise; and Parliament had left it to HMRC to implement the necessary regulations, but they had failed to do so. Second, that TMA 1970, s 29 did not apply to income tax under FA 2004, ss 208 and 209, which did not charge income tax ‘for a year of assessment’. The Upper Tribunal (UT) rejected these arguments and dismissed the appeal. Written by Rebecca Murray, barrister at Devereux Chambers.

Scope of new Pensions Commission faces early criticism from industry

Law360: The government launched a once-in-a-generation review of retirement savings on 21 July 2025, but experts warned that the new Pensions Commission is a missed opportunity to take a no-holds-barred approach to tackle the savings crisis.

Pensions Adequacy Review: Pensions Commission formally relaunched to address retirement crisis, coinciding with launch of Third State Pension Age Review

The government has relaunched a new Pensions Commission on 21 July 2025, headed by Baroness Jeannie Drake, Sir Ian Cheshire, and Professor Nick Pearce. The Pensions Commission is set to examine the barriers preventing adequate retirement savings and resulting in poor retirement outcomes by assessing the overall pension system, while building on the findings of the Pensions Investment Review published in May 2025 and the measures outlined in the Pension Schemes Bill that aim to boost investment and stimulate economic growth. The initiative also builds on the success of the original Pensions Commission (2002–2006), which led to the introduction of Auto-Enrolment and improved pension saving participation from 55% in 2012 to 88% in 2025.

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