Pensions law update: October 2025

Policy update

Pension Schemes Bill progress

The Pension Schemes Bill has now completed the Committee stage in the House of Commons. Following scrutiny by the Committee in a number of debates, an amended version of the Bill has been agreed. The updated draft Bill, published on 18 September 2025, is available here.

The amendments are quite extensive but many are technical in nature. Key substantive changes include the addition of clauses setting out the proposed s37 remedy (considered in our September article when the amendments were first tabled), changes to proposed powers in relation to pooling in the LGPS, and clarification of the level at which the new scale requirements for DC schemes will apply.

The Bill is now at the report stage, with scrutiny by the House of Lords due to begin later this month.

PPF levy – good news for DB schemes and sponsors

The Pension Protection Fund has confirmed that it will reduce the conventional PPF levy to zero for the 2025/26 levy year.

As we reported earlier this year, the PPF published its levy determination for 2025/26, setting the levy at £45m – this was the lowest figure the PPF felt able to reduce the levy to whilst the law restricts levy increases to 25% year on year. However, it did build into the levy formula the facility to reduce the levy to zero if the law was amended during 2025/26 or if, in the PPF’s view, sufficient progress towards appropriate legislative changes had been made.

The Pension Schemes Bill includes the changes the PPF has been seeking, including discretion not to charge a levy at all and for greater year on year increases. The PPF says the measures “enable to the PPF to move to zero levy whilst preserving its ability to reinstate the levy in future if it were ever needed”.

The PPF had been holding off invoicing schemes to allow maximum time for progress to be made. When the Bill completed the Committee stage, and in view of the broad support for the changes from policy makers and stakeholders”, the PPF said the time was right to make the announcement to give schemes and sponsors certainty on costs. On 23 September it therefore confirmed that the levy would be reduced to zero for 2025/26. More details in the PPF’s press release.

Budget watch 2025 – HMRC and the FCA sound a note of caution

With the rumour mill in full swing ahead of the Chancellor’s November budget, press reports in recent weeks have noted a surge in members accessing their benefits, in particular tax free cash lump sums. HMRC and the FCA have issued parallel statements, addressing the tax consequences if a member withdraws cash and later changes their mind about accessing the benefit.