In-depth focus
TPO determination and guidance on overpayments
TPO’s 20 June 2025 determination partially upholding the complaints of Mr and Mrs D regarding the recoupment of overpayments under the BIC UK Pension Scheme provides important guidance for trustees on how TPO will approach overpayment recovery complaints in trust based occupational pension schemes and the key matters that they should consider when dealing with overpayments. It uses TPO’s landmark April 2024 determination involving the same scheme as a lead case.
Our in-depth insight sets out the key points of the general guidance and how TPO applied this to conclude that it would only be equitable to allow the trustees to recoup a very small proportion of the overpayments from Mr and Mrs D. One of the principal reasons for this was the considerable delay between the trustees becoming aware of the overpayments and communicating these (and their intention to recover them) to the members.
Mansion House speech
The Chancellor’s annual Mansion House speech was relatively light on pensions but did reveal “the most wide-ranging package of reforms to financial services regulation in more than a decade”. As regards pensions, there was a brief mention of the Pension Schemes Bill 2025, the 14 July 2025 announced Employer Pension Pledge on value for money (VfM) and the new form of pensions and retail investment support, ‘targeted support’, that will permit FCA-authorised firms to make ready-made suggestions appropriate for pre-defined consumer groups or cohorts with similar characteristics and circumstances.
See our in-depth insight for the key points from the speech that will be of interest to those in pensions including an overview of the targeted support initiative.
Pensions adequacy review announced through ‘revival’ of Pensions Commission; State Pension Age Review launched
On 21 July 2025, the Department for Work and Pensions announced that the second phase of its Pensions Review will involve the revival of the Pensions Commission to look at “why tomorrow’s pensioners are on track to be poorer than today’s and make recommendations for change.”
The Commission will “consider the long-term future of our pensions system”, including: outcomes and risks based on ‘current trajectories’; how retirement incomes can be improved; the role of private pensions and savings in providing financial retirement security; the challenges of supporting an ageing population; and proposals for change to make sure that there is a ‘strong, fair and sustainable’ pensions system. Its final report should be published in 2027.
Analysis has revealed that 1-in-8 are not on track to meet the Pensions and Lifetime Savings Association’s (PLSA) minimum retirement living standard, 3-in-4 will not reach a moderate standard of living in retirement, and 40% (around 15m) are under saving, including 45% saving nothing (3m self-employed, just 1-in-4 low earners saving into a private pension and only 1-in-4 from a Pakistani or Bangladeshi background saving). There is also a 48% gender pensions gap and other inequalities for lower earners, carers and the self-employed.
The Pensions Commission was originally set up in 2002 to consider retirement adequacy and suggest reforms. It was chaired by Lord Adair Turner and its series of 2004-2006 reports led to the introduction of automatic enrolment in 2012 and the new state pension on 6 April 2016. Although auto-enrolment has been a resounding success in terms of saver participation rates, “we are on course for future generations of pensioners to face incomes that are too low, risks that are too high and a system that is unequal in too many ways”. The additional voluntary saving that the first Pensions Commission thought would be made to fill the identified retirement savings gap has “simply not materialised”.
The Pensions Commission’s proposals are not restricted to the current parliament, albeit the Government has ruled out an increase in employer contribution rates this Parliament.
The Government has also started the next statutorily required State Pension Age Review which will consider what the future State Pension Age should be. As part of the Review, the Government has commissioned two independent reports, one of which will look at factors that should be considered and the other will consider the proportion of adult life that should be spent in retirement.
Government will go ahead and bring inherited unused pensions into IHT from 6 April 2027 but with some easements to original proposals
HM Revenue & Customs’ 22 July 2025 consultation response confirms that, from 6 April 2027, most unused pension funds and death benefits payable from a registered pension scheme will be brought within the remit of IHT irrespective of whether the scheme has discretion over the payment of death benefits. In a shift from its initial proposals, HMRC has confirmed that death in service benefits will not be in scope of the IHT changes and that the personal representatives, rather than the scheme administrator, will have primary responsibility for reporting and paying IHT. Read our in-depth insight for more details of the changes and how the new regime will work in practice.