Government's Spring Statement 2026: Continue as Planned!
The 2026 Spring Statement saw the Government reiterate its messaging from the Autumn budget and provide an update on the economic forecast. As expected, the Statement did not introduce any new changes for UK pensions.
Given the volume of changes in the last few years, no news is welcome at this stage. As a reminder of the main pension changes on the horizon from the Autumn Budget and beyond:
- A reduction in pension contribution salary sacrifice savings
A £2,000 annual cap is being introduced on National Insurance exempt salary sacrifice pension contributions from April 2029. This is expected to affect a significant number of individuals, leading to most likely increased costs for employers and lower pensions for individuals. - Pension Scheme Bill
The Pension Scheme Bill is expected to become law in the next few months and will
- Introduce framework to allow consolidation of small defined contribution pension pots.
- Introduce value-for-money framework for defined contribution schemes.
- Ensure defined contribution providers offer ‘Guided retirement’ options for turning pension pots into retirement income
- Provide power to the government to encourage pension funds to invest in UK productive assets.
- Expansion of Collective Defined Contribution (“CDC”) Schemes
The Government is due to introduce legislation later this year permitting multi-employer CDC schemes to be set-up following the recent set-up of the Royal Mail CDC Scheme.
PPF introduce pre-1997 pension increases
From January 2027, reserves within the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) will be used for those that are in these schemes to start receiving a pension increase on pension accrued prior to 6 April 1997 in line with the Consumer Prices Index capped at 2.5% from April 2027. This change will only apply where the original scheme provided an inflationary benefit on this pension originally.