HL UK Law Pensions Digest 26 February 2026

Welcome to our latest update, in which we cover: 

Pension Schemes Bill: recent debates in Parliament

• Interesting points on targeted support, fiduciary duties and climate change;

The Pensions Dashboards Programme: blog on accessibility

• The Pensions Dashboards Programme (PDP) has published a blog on how it intends to make the MoneyHelper Pensions Dashboard accessible;

The Pensions Ombudsman: Chair reflects on first six months in the role

• The Chair of the Pensions Ombudsman (TPO) has written about the challenges and successes of her first six months in the role, and sets out future priorities;

The Pensions Ombudsman: trustee is able to require two legal opinions as a precondition for a QROPS transfer

• The Pensions Ombudsman (TPO) determines that trustees can make the provision of two legal opinions, at the member's expense, a precondition for a transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS);

Unsuitable investments following pension transfers: Financial Conduct Authority (FCA) ban upheld

• The Upper Tribunal agreed that two individuals should be prohibited from acting in financial services;

Changing pensions market: consultation response

• The Investing and Savings Alliance (TISA) has responded to the FCA’s consultation on adapting to the needs of a changing pensions market.

Pension Schemes Bill: points of interest from recent debates

The Pension Schemes Bill is continuing to progress through Committee stage in the House of Lords. Interesting points made by the Minister of State (Baroness Sherlock) include the following.

Pensions Commission

• The Pensions Commission will issue an interim report this Spring, with the aim for a final report to be published in early 2027. (For more information on the Commission, please see our Digest of 29 July 2025.)

Targeted support

• Questions were raised about ensuring an appropriate balance between consumer protection and enabling practical communication to help members make informed decisions under the new targeted support regime (for more details, please see our Digest of 18 December 2025).
• The Minister referred to a joint statement published in December 2025 by the Information Commissioner’s Office (ICO) and the Financial Conduct Authority (FCA), explaining how providers will be able to communicate with members in relation to the new targeted support regime. The statement explains that financial services providers may send neutral, non-promotional and factual information about important financial matters to all members, including those who have opted out of receiving direct marketing communications. These messages may include warning an individual that they are under-saving for retirement or that they may be drawing down a pension unsustainably.
• Regulations will be brought in to enable providers to send direct marketing communications in relation to targeted support to individuals who have not opted out of direct marketing.

Climate change and environmental issues

• The DWP is currently working with the Pensions Regulator (TPR) to assess the impact on larger schemes under the Task Force on Climate-Related Financial Disclosures (TCFD) requirements. To support this work, TPR is expected to present findings this Spring on the practicalities of introducing transition plans for pension schemes.
• Future reforms to reporting are intended to provide schemes with insights into companies’ decarbonisation plans, to help them assess whether investment or divestment is appropriate.
• The government rejected an amendment which would prohibit schemes from holding certain fossil fuel-related investments. Instead, it acknowledged the voluntary steps already being taken by many schemes and intends to continue to “support and challenge” the pensions sector on climate-related issues.
• The government wants to see “more consistent and demonstrable progress” in coming years in relation to nature-related risks, in particular how issues such as deforestation and land use change are reflected in schemes’ investment and stewardship strategies. The Minister pointed out that schemes may choose to adopt the measures in the Taskforce on Nature-related Financial Disclosures (TNFD) and that some large schemes are doing so.
• The Minister (Baroness Sherlock) referred to the ongoing development of international standards, especially for the International Sustainability Standards Board, which draws on the work of the TNFD. She rejected calls to introduce a UK-specific statutory duty on nature-related risk ahead of international developments.

Fiduciary duties and forthcoming statutory guidance

• The Minister was clear that trustees’ primary duty is to invest in the best interests of members. She recognised, however, that trustees may reach different interpretations of how fiduciary duties apply in relation to factors beyond immediate financial returns. She commented that trustees should be given greater confidence in this area.
• The Pensions Minister (Torsten Bell) confirmed at a round table on 2 February 2026 that a technical working group will be established to support the work of developing statutory guidance on trustees’ duties.
• Although statutory guidance is being developed for private sector trust-based pension schemes, the government recognises the importance of consistency with guidance for FCA-regulated schemes and the Local Government Pension Scheme (LGPS).
• The government will consider including good-practice examples of how schemes can identify, assess and manage biodiversity and wider nature-related risks in the statutory guidance.
• Consultation on draft guidance is expected “later” this Spring.

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The Pensions Dashboards Programme publishes blog on making the MoneyHelper Pensions Dashboard accessible

On 18 February, the Pensions Dashboards Programme (PDP) published a blog by Adam Gifford, Senior Policy and Propositions Manager for the MoneyHelper Pensions Dashboard, in which he outlined how the MoneyHelper Pensions Dashboard (MPD) will be made accessible to as wide a variety of users as possible, including people with disabilities or low digital skills.

Key points discussed in the blog include:

• The MPD is being designed to accommodate users with visual or hearing impairments, motor difficulties, cognitive or learning disabilities and low digital skills or confidence.
• The MPD has also undertaken an Equalities and Vulnerabilities Impact Assessment; i.e. a comprehensive assessment of the service against its impact on equality and those with vulnerabilities, to ensure it is fit for purpose for all users.
• Design considerations include the introduction of clear visual elements such as "traffic light" colour schemes to help users differentiate between their initial matches and pension types.
• The identity verification process for MPD will use a government-provided tool that is already used across multiple government services, providing reassurance to users and saving time and effort.
• The user testing programme is already under way, and aims for up to 20% of testers with a range of access needs and low digital skills.

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The Chair of the Pensions Ombudsman publishes reflections on her first six months in the role and outline future priorities 

On 19 February, the Pensions Ombudsman (TPO) published an article by Deborah Evans, TPO Chair, outlining TPO's challenges and successes over her first six months in the role.

She notes that:

• TPO's casework teams have exceeded targets, ending 2025 with a closure rate 12% higher than the previous year.
• Applications increased by over 30% in December 2025, compared to December 2024.
• Meeting the "ever-increasing demand" will continue to require a strategic approach and TPO's discussions have resulted in detailed plans to scale up, re-imagine its processes, and grow the skills and knowledge of staff across its services.
• Stakeholder engagement has been a "defining feature" of her first six months, including building positive relationships within government, the industry and the regulatory sphere.
• Moving forward, TPO will focus on good governance and board effectiveness, with an external independent review covering areas such as decision making and the understanding of risk.
• Recruitment is ongoing for a new non-executive director.

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The Pensions Ombudsman determines that trustees can make receipt of legal opinions a condition for overseas transfers

In Mrs N, the Pensions Ombudsman (TPO) determined that a trustee could require a member to produce two legal opinions as a condition of it agreeing to make a transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS).

Background

In 2021, Mrs N requested a transfer from the SCA UK Pension Plan (a defined benefit scheme) to a QROPS. Mrs N was told that, before the trustee could consider whether to make the transfer, she must provide, at her own expense, two legal opinions from an independent law firm (or firms), qualified to advise on English law and the law in the receiving scheme's jurisdiction (Malta, in this case).

Mrs N did not provide the legal opinions and instead transferred her pension to a UK self-invested personal pension (SIPP), and then to her chosen QROPS.

Mrs N brought a complaint to TPO, claiming financial loss of £1,200 in relation to the SIPP transfer and £6,000 in respect of the financial advice costs and loss of potential investment growth caused by the delay.

TPO's conclusions

TPO did not uphold Mrs N's complaint:

• TPO acknowledged that Mrs N had a statutory right to transfer; and that section 95 of the Pension Schemes Act 1993 provides that a member may exercise this right by requiring the trustee to pay the transfer value to a QROPS.
• However, the trustee also needed to be satisfied, as a minimum, that it was a QROPS within the meaning of section 169 of the Finance Act 2004 and that all other conditions set out in the transfer regulations had been met. If the receiving scheme did not meet these requirements, the trustee was not under any legal obligation to pay the transfer – and making the transfer payment might not discharge its obligation to provide benefits under the scheme.
• TPO concluded that requesting two legal opinions, to be provided at Mrs N’s expense, was "permissible and reasonable as a precondition to paying the transfer" and "entirely legitimate". In particular, TPO noted that determining whether a scheme is a QROPS is "not straightforward" and involves considerations which "are not reasonably matters which are within the expertise or the responsibility" of the trustee (including, the pensions tax relief rules which apply in the overseas jurisdiction). TPO also noted that the HMRC list of potential QROPS at the time "cannot be relied on" as "HMRC may not verify that the listed schemes do in fact meet the requirements", and "may remove schemes from the list retrospectively".
• On whether the opinions should be provided at Mrs N's expense, TPO noted that there was no obligation under legislation or general law for the trustee to obtain the legal opinions at the scheme's expense. Accordingly, TPO found that the trustee could require Mrs N to pay for the opinions.
• TPO concluded that there was no basis on which the trustee could be liable to Mrs N for the cost of setting up the SIPP, the financial advice or any investment loss arising from delay. TPO noted that there had been no maladministration by the trustee in relation to any delay.

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Upper Tribunal upholds FCA ban and fines for unsuitable investments

The Upper Tribunal has upheld decisions by the Financial Conduct Authority (FCA) to ban two individuals (Mr B and Mr G) from working in financial services and directed that the FCA should impose financial penalties of £256,071 on Mr B and £47,600 on Mr G.

The FCA argued that Mr B and Mr G had created arrangements “to funnel a large proportion of the pension funds of retail clients into high risk and illiquid investments” in an offshore property development group engaged in tourist development projects in Cape Verde. The investments failed and £1.4m compensation has so far been paid to policyholders from the Financial Services Compensation Scheme (FSCS).

According to the FCA’s press release, total pension funds of over £10m had been switched into high-risk investment portfolios. Despite knowing that the portfolios were high risk, Mr B allowed policyholders to receive reports that their funds would be put in low or medium risk investments.

The Upper Tribunal concluded that both Mr B and Mr G had acted without integrity in performing their regulated functions. In addition, Mr B had knowingly acted as a director of a wealth management company without having the required FCA approval.

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Changing pensions market: TISA's response to consultation

The Investing and Saving Alliance (TISA) has responded to consultation (CP25/39) by the Financial Conduct Authority (FCA) on adapting its requirements for the changing pensions market.

The consultation proposed changes in relation to interactive pension modellers and to non-advised transfers between defined contribution (DC) arrangements. For more details, please see the entry in our Digest of 18 December 2025.

TISA’s recommendations include the following:

• Implementation of the transfer proposals should be deferred until at least 2028, when many of the government’s other pension reforms will be underway;
• Changes to pension transfers should be applied to both contract and trust-based schemes at the same time, to avoid inconsistent outcomes; and
• Assumptions used by interactive pension modellers to estimate retirement income should be consistent with those used by pensions dashboards.

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Authored by Jill Clucas and Susanne Wilkins.