PATHways 171

HMRC newsletter

HM Revenue & Customs (HMRC) published Pensions schemes newsletter 169 on 24 April 2025.  It includes:

• Information on migration to the Managing pension schemes (MPS) service and completion of the Pension scheme return.
• Lifetime allowance protections and enhancements:
  • confirmation that the deadline for applications for fixed and individual protection 2016, as well as international and pension credit enhancements, has now passed.
  • information on the move from the current protection look-up service to MPS in late 2025.  The updated service will allow administrators to check whether the protection or enhancement the member is relying on is valid.
  • the service available to members to enable them to check the validity of their protection through their personal tax account has been renamed ‘Check your pension protections’.  HMRC plan to introduce enhancements to this service in late 2025.
• A reminder that HMRC has asked managers of qualifying recognised overseas pension schemes (QROPS) established in the European Economic Area, to confirm whether they meet the revised conditions from 6 April 2025.  Schemes that do not confirm they meet these conditions by 7 May 2025 will cease to be a QROPS.
• A request for volunteers to provide feedback at user research sessions on the Lifetime allowance protection look up service, the APSS262 overseas transfer form and the Pension scheme return, that will all be on MPS.
   

DWP – combining small pension pots

The Department for Work and Pensions (DWP) announced on 24 April 2025 plans to bring eligible small pension pots together under reforms to be included in the Pension Schemes Bill, as part of the Government’s Plan for Change.  It follows the findings of the work conducted by the Small Pots Delivery Group aimed at supporting the design and implementation of the new small pots multiple consolidator scheme approach,  The aim of the initiative is to:

• automatically combine the number of eligible small pots of £1000 or less into one pension scheme that is certified as delivering good value to savers.  Individuals will retain the right to choose their own consolidator scheme or opt out;
• help workers keep track of their pensions and get a better rate of return on these retirement savings by reducing the number of flat rate charges paid from their multiple small funds; and
• save businesses millions in unnecessary costs involved with administering an increasing number of small funds, as a result of Automatic Enrolment. 

TPR updates

TPR oversight of professional trustee firms

The Pensions Regulator (TPR) has announced that it will introduce a framework for the oversight of professional trustee (PT) firms, with the overarching aim of protecting savers.

"The professional trustee industry has experienced significant growth over the last few years, with more than half of UK schemes using a professional or sole trustee. Between them, just 10 firms govern more than a trillion pounds of savers’ retirement income. As part of our new risk-based and outcome-focused approach to regulation, we are extending our engagement with these firms to identify and mitigate any risks to pension savers."

TPR’s market oversight report informs of some of the areas where risks could arise, including the PT firm’s relationships with employers, their profit and remuneration model and the use of wider ‘back office’ support functions.

It is expected that ongoing supervisory relationships with PT firms will begin in the summer, with all PT firms engaged by the end of the year.

New AI tool for pension scam website detection

TPR announced that, together with Pension Scams Action Group (PSAG), it has developed a new AI tool using algorithms to detect scam websites.  So far PSAG has reviewed 830 websites, taken down 29 high-risk sites and made 94 referrals to partner agencies.

Small DC schemes – improve or consolidate

TPR has published a report outlining the climate change risks most relevant to UK schemes, as well as the steps it has taken to raise standards of investment governance and systemic risk management.  The report shows that there are too many small DC schemes where trustees have limited knowledge of the scale of financial risks posed by climate change. TPR is calling on those trustees to upskill or consider consolidating.  TPR also suggests that small DC schemes which do not take appropriate action to protect savers' retirements from climate risk should consider leaving the market.

TPR films - preparation for dashboards

TPR has published a series of short films as part of its campaign to get the pensions industry “dashboard ready”.  The films are being shared on TPR’s social media channels and with industry stakeholders to maintain momentum as schemes prepare to connect.  The first group of schemes connected to the dashboards ecosystem in April 2025, with all in-scope schemes needing to connect by the statutory deadline of 31 October 2026.