With plenty of regulatory updates expected over the coming month. AJ Bell director of public policy, Tom Selby, and head of public policy, Rachel Vahey, share below the key things they think we should all be looking out for in June as follows:
Tom Selby, director of public policy at AJ Bell, comments:
“Too few people are taking regulated advice and instead receive only generic guidance. This often results in people having to make complex financial choices without the help they need, meaning millions of Brits aren’t making the most of their pensions and investments.
“Thankfully, significant reforms are in train which have the potential to address this financial ‘help gap’. By the end of June, the FCA is expected to publish final proposals for how targeted support can work in practice. The regulator has indicated it wants to set a framework that isn’t overly prescriptive but instead gives firms flexibility to deliver suggestions to customers based on their knowledge of those customers. This way, targeted support suggestions can be designed in a way that benefits the mass market.
“The journey on turning targeted support from a concept into a reality has so far been quick, focused, and bold, thanks to the collaborative approach adopted by the FCA which has led to speedy consultations and a highly successful policy sprint that moved discussions on from the theoretical to the practical.
“With this pace of delivery, it shouldn’t be long until millions of people are getting more personalised guidance, which in turn should help millions of people take better-informed decisions on their pensions and investments to build a more secure financial life.”
- The draft legislation the government hopes will revolutionise workplace pensions
- The DWP is expected to publish the Pension Schemes Bill in early June, setting out a raft of legislative framework it believes will bring about a pension revolution
- The framework will include:
- the consolidation of pension schemes to create ‘megafunds’,
- allowing employers to access defined benefit surpluses,
- measuring value for money schemes provide, and
- requiring schemes to offer default solutions for how people access their retirement funds
- Once the Bill has received Royal Assent, it’s expected DWP will publish regulations setting out the new rules for pension schemes in more detail
- The government wants to drive more pension scheme investment into ‘productive UK assets’, as well as releasing much-needed money back to employers to boost their businesses
- Schemes are expected to set default solutions for members accessing pension money – if workplace pension savers want to do something different, they will have to opt out of the default
Rachel Vahey, head of public policy at AJ Bell, comments:
“With the publication of the Pension Schemes Bill, the government is hoping for a pension revolution, drastically cutting the number of pension schemes by forcing more to consolidate into larger ‘megafund’ schemes. The ultimate aim is to channel pension investment into UK plc to help balance the country’s accounts.
“But bigger is not necessarily better, and obliterating smaller schemes could reduce competition in the market and may stifle incentives to deliver innovation. Even worse, megafund members may find that the investment of their hard-earned pension pots in riskier private equity could mean they end up worse off in retirement if those investments fail to perform over the longer term.
“The bill will also set out the broad terms to give employers the key to free the estimated £400 billion locked away in defined benefit pension surpluses. The government is hoping that by redirecting that money back into employers’ businesses, or back into the scheme, this will give a better outcome for pension scheme members and British companies.
“But one doesn’t have to go too far back into history to be reminded of what happens when employers pursue surplus money, and the legacy of the Maxwell scandal demonstrates that simply allowing employers to access surplus money could present a clear danger to the finances of the scheme – particularly if gilt yields shift in the wrong direction.
“There is no doubt pension scheme members need help deciding what to do with their pension pot, but whilst the FCA has gone the way of introducing targeted support to help them make these complicated decisions, the DWP has chosen to put occupational scheme members into a default solution giving them a set outcome.
“Devising one solution to fit thousands of members’ needs is always going to be impossible, and pension scheme members will still need to be alert to check whether the solution pathway they have been placed on is the right one for them, both now and as their circumstances change. If not, then they should be given the ability to opt out at any time and decide for themselves how to spend their hard-earned retirement pot.”
REGULATORY OUTLOOK: DIARY
This is a summary of key policy and regulatory developments expected this year and beyond. Dates are correct at the time of publishing but are subject to change according to updates issued by regulators, government departments and other relevant bodies.
| What | When | Who | AJ Bell View |
| Summer 2025 | |||
| Government Spending Review – possibly including details of new terms for Winter Fuel Payment for pensioners | 11 June 2025 | DWP | Pension credit claims soar as government weighs winter fuel payment reversal |
| DWP to publish Pension Schemes Bill (including legislative framework for pension megafunds, accessing DB surplus, value for money and guided retirement). | June 2025 | DWP | Government sets £25 billion minimum for ‘megafunds’ and threatens mandatory investment targe5ts in latest pensions growth drive |
| FCA to publish feedback on consultation on Targeted Support on pensions, and consultation paper on Targeted Support on retail investment products (such as ISAs) | June 2025 | FCA | ‘Targeted Support’ reforms could spark UK investment revolution |
| Bank of England’s consultation closes on increasing FSCS deposit protection limit to £110,000 | 30 June 2025 | Bank of England | |
| Treasury Committee publish the findings of its enquiry into whether the Lifetime ISA remains an appropriate product | Summer 2025 | AJ Bell calls for Lifetime ISA rules changes alongside package of ISA reforms to boost investment | |
| Treasury could publish statement or consultation on outcome of review of ISAs to ensure better balance between cash and equities | Summer 2025 | HMT | Rachel Reeves sets the scene for ISA reform – here’s how she can radically simplify the system and boost UK plc at almost zero cost |
| HMRC to publish response to IHT on Pensions consultation, and possibly to publish draft legislation (possibly part of ‘L-Day’) | Summer/Autumn 2025 | AJ Bell calls on chancellor to consider alternatives to IHT on pensions | |
| Other publications expected in 2025 | |||
| FCA to provide further update on its review of FCA requirements following the introduction of the Consumer Duty | September 2025 | FCA | |
| Autumn Budget | Possibly October/November 2025 | HMT | |
| FCA to publish Policy Statement setting out final rules for FCA-regulated DC workplace schemes | 2025 | FCA | |
| FCA to publish Policy Statement on Consumer Composite Investments (CCI) disclosure framework | 2025 | HMT | FCA urged to stick with principles-based regulation on investment disclosure |
| Treasury to publish outcome on ban on cold calling for consumer financial services and products | 2025 | HMT | Government sets out plans to ban cold-calling for all financial products |
| DWP publish Terms of Reference for Phase 2 of the Pensions Review | 2025 | DWP | Government ‘kicks pensions adequacy review into the long grass’ after Budget employer tax hit |
| DWP publish updated transfer regulations changing terms for red and amber flags | 2025 | DWP | |
| Independent Review of planned State Pension Age increases | 2025 – 2026 | DWP | Why economic woes may force state pension review |
| 2026 | |||
| Business Asset Disposal Relief (BADR) for capital gains tax to rise to 18% | 6 April 2026 | HMRC | Capital gains tax raid will hit small shareholders where it hurts |
| New IHT rules including combined agricultural and business property £1 million limit for 100% relief from IHT, and 50% relief thereafter | 6 April 2026 | HMRC | IHT reforms spark death tax raid on small businesses and landowners |
| SPA to start to increase to 67 | Between 6 April 2026 – 5 April 28 | DWP | |
| Final connection deadline for pensions dashboards | 31 October 2026 | DWP | FCA confirms commercial Pensions Dashboards rules but firms in the dark on timescale for delivery AJ Bell launches free pension finding tool to track down the UK’s £26bn lost retirement savings |
| Later on | |||
| Unused pensions to be included in the estate for IHT | 6 April 2027 | HMT | |
| Income tax thresholds for rest of UK to remain frozen until | 5 April 2028 | HMT | How much frozen income tax bands are costing us as OBR reveals another huge increase in tax take |
| NMPA rises to 57 (unless protected) | 6 April 2028 | HMRC | |
| The final Child Trust Funds mature | 2 Jan 2029 | HMRC | |
| ISA annual subscription to remain frozen at £20,000 until | 5 April 2030 | HMRC | |
| IHT nil rate band and residence nil rate band to remain frozen until | 5 April 2030 | HMRC |
