Pensions beginners' guides

This subtopic provides a series of beginners’ guides for trainees, newly qualified lawyers and other persons who are new to or unfamiliar with

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Latest Pensions News

National Insurance Contributions (Employer Pensions Contributions) Bill: Lords warn of pension saving impact as Bill advances to Grand Committee Stage

The House of Lords gave the National Insurance Contributions (Employer Pensions Contributions) Bill a Second Reading on 4 February 2026, with debate focused on Clause 1, which would introduce a £2,000 annual cap on pension contributions made through salary sacrifice, that are currently exempt from employer and employee national insurance contributions (NICs), applying NICs above the cap from the tax year 2029–30. Lord Livermore, for the government, said the reform was necessary to address the projected growth in the cost of pension salary sacrifice to £8bn a year, which he said was driven largely by higher and additional rate taxpayers, while many lower earners and the self-employed could not access the relief. He said the cap would protect ordinary workers, give employers over three years to prepare, and preserve income tax relief on all pension contributions, with the Office for Budget Responsibility not expecting a material impact on overall pension saving. No amendments were moved during the Second Reading debate , the Bill was read a second time and committed to the Grand Committee, where peers indicated that detailed operational and behavioural issues would be examined further. The Grand Committee is currently scheduled to examine the Bill on 24 and 26 February 2026.

Pension Schemes Bill: government holds firm amid Lord’s challenges, including on investment mandation

The House of Lords Grand Committee (Grand Committee) completed its sixth day of scrutiny of the Pension Schemes Bill on 3 February 2026, agreeing Clauses 40 to 96 without amendment. All opposition and non-government amendments were either withdrawn or not moved, and the government suffered no defeats, including on the most controversial provision, Clause 40, which introduces reserve powers allowing ministers to mandate minimum asset allocations in defined contribution default funds. Further stages of the Grand Committee are scheduled for 5 and 23 February and 3 March 2026.

FRC confirms no change to DC projections as it reaffirms AS TM1 assumptions following review

The Financial Reporting Council (FRC) has confirmed that the actuarial assumptions in Actuarial Standard Technical Memorandum 1 (AS TM1) will remain unchanged following its annual review and consultation. Version 5.2 of AS TM1 introduces only minor wording changes relating to fund volatility calculation dates, intended to clarify the FRC's policy position. The consultation, launched in November 2025, proposed no substantive amendments to the standard and received broad agreement from stakeholders. Pension providers will therefore continue to use the existing actuarial assumptions when calculating Statutory Money Purchase Illustrations for individual defined contribution (DC) pension schemes, of which more than 50 million are produced each year.

Employers likely to change pay and pensions as NICs relief on salary sacrifice is capped, OBR says

According to new detail published by the Office for Budget Responsibility (OBR), employers are likely to change how they pay staff and fund pensions in response to the government’s decision to limit National Insurance contributions (NICs) relief on salary-sacrificed pension contributions. From 6 April 2029, salary-sacrificed pension contributions above £2,000 a year will be subject to both employee and employer NICs. Released after requests for more explanation of the pensions salary sacrifice policy announced at Budget 2025, the report shows that the OBR expects employers to react rather than absorb the extra cost, with one of the main assumptions being that employers will divert part of future pay rises into ordinary employer pension contributions, which remain exempt from NICs. Employees are also assumed to cut their own contributions so that overall pension saving stays broadly unchanged. This behaviour is assumed to start before the policy takes effect and to lower the amount of tax raised once the policy is in force.