Jurisdiction(s):
United Kingdom

UK pensions weekly: Budget 2025 NIC cap, DB surplus, CMP reforms; Pension Schemes Bill; PASA data quality/digital guidance; LGPS pooling consultation; diary dates and trackers

Published on: 27 November 2025

Published by a LexisNexis Pensions expert

Legal News

Article summary

In this issue:

Budget 2025—key Pensions announcements
Pension Schemes Bill
Scheme governance
Public sector pensions
Dates for your diary
Trackers

Budget 2025—key Pensions announcements

In the 2025 Budget, delivered on 26 November 2025, the Chancellor of the Exchequer, Rt Hon Rachel Reeves MP, set out: (i) from April 2029, a £2,000 yearly ceiling on salary sacrifice pension inputs qualifying for National Insurance contribution relief; (ii) from April 2027, looser defined benefit (DB) surplus rules enabling well-funded schemes to pay incentivised surplus amounts straight to members; and (iii) CPI-linked inflation protection (capped at 2.5%) for pre-1997 PPF and FAS pensions where legacy schemes had provided such increases.

The Chancellor also outlined measures to reduce administrative burdens on personal representatives dealing with Inheritance Tax on unused pension funds, permitting them to direct scheme administrators to withhold 50% of taxable benefits for up to 15 months and conferring discharge from liability once HMRC clearance is achieved, effective from April 2027. Finally, the government will widen the framework for Collective Money Purchase (CMP) schemes by enabling unconnected multiple-employer arrangements to register with HMRC and by empowering HMRC to decline or withdraw registration, underpinned by new regulation-making powers to simplify future CMP legislation...

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