Ill-health benefits

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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

TPO determination clarifies trustee duties for pre-2021 statutory transfers from occupational pension schemes

The Pensions Ombudsman (TPO) has issued a press release on its determination (CAS-81940-Z2S8) regarding a complaint from a member who transferred from the British Steel Pension Scheme to a small self-administered pension scheme in 2014. Although the transfer was made in line with the member’s wishes, he later argued that the trustee failed to carry out sufficient due diligence to identify and communicate potential scam risks, resulting in a loss of retirement benefits. TPO did not uphold the member’s complaint, concluding that, at the time of the transfer, there was no general, common law or equitable duty of care requirement for the trustee to conduct due diligence beyond what was necessary to meet the statutory criteria under the Pensions Schemes Act 1993. TPO found that the trustee was not legally required to follow the due diligence guidance suggested by the member, such as that contained in the Pensions Regulator’s Action Pack and the Scorpion Leaflet, and had not assumed any responsibility or made representations that would have led the member to rely on such checks.

SPP seeks more clarity in pensions communications to aid neurodiverse adults

Law360: Improving the clarity of communication and language used for savers in the pensions sector would improve accessibility for neurodiverse adults, the Society of Pension Professionals (SPP) said.

PASA response to FCA’s targeted support consultation calls for industry collaboration on practical solutions

The Pensions Administration Standards Association (PASA) has responded to the FCA’s consultation on targeted support for pension savers, welcoming the initiative but highlighting challenges for occupational schemes. Given that occupational schemes lie outside FCA regulation it makes segmentation complex. PASA stresses the need for tailored segmentation. It urges the FCA to acknowledge scheme diversity and avoid retail-based assumptions, while continuing collaboration with the Department for Work and Pensions. PASA also stresses that schemes may not hold the same data as FCA regulated providers, limiting their ability to deliver targeted support without disproportionate effort, and recommends a flexible framework that reflects operational realities. It also cautions against the risk of misleading guidance for consumers with hybrid pension schemes where defined benefit elements are significant, as guidance that overlooks them can be misleading for savers. PASA also calls for clear boundaries between ‘guidance’, ‘regulated advice’ and any new support strand to avoid regulatory risk. While supporting the development of proportionate and accessible decision-making tools, PASA emphasises the importance of clarity, confidence and collaboration with industry bodies to co-design practical solutions that are actionable and easy to understand, particularly for savers with limited financial literacy.

Pensions weekly highlights—28 August 2025

This week’s edition of Pensions weekly highlights includes a review of key news stories, as well as dates for your diary and trackers.

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