Bulletin 284

Other news and updates

Budget 2026

On 28 October, John Healey, Chancellor of the Exchequer, delivered the Budget 2026 – Breathing Space for today, Fresh hope for the future.

Key announcements for pensions include:

Removal of the two-year rule for the taxation of lump sum death benefits – recipients will no longer be taxed solely because lump sum death benefits are paid after the two-year period. The change applies to payments made on or after 28 October 2026. See HMRC’s policy paper on removing the pensions tax two-year rule for more detail.

A change to HMRC’s definition of terminal illness for pensions access – the Government will make changes to the definition of terminal illness to make it easier for terminally ill individuals to access their pensions savings and allow for overseas registered medical practitioners to provide medical evidence.

Earlier this month, DWP confirmed the change will see a shift from a requirement for medical evidence that an individual is expected to live for less than one year, to the slightly more flexible test that death can reasonably be expected within 12 months.

In the LGPS, a serious ill health lump sum (SIHLS) can only be paid to members who left active membership before 1 April 2008 (England & Wales) or 1 April 2015 (Scotland). MHCLG and SPPA will need to consider whether they wish to amend the LGPS regulations to reflect this change.

See HMRC’s policy paper on the definition of terminal illness for pensions for more information.

A new Pension Tax Allowance to protect low-income pensioners – this is intended to ensure that pensioners with income at or below the full new State Pension are not brought into paying income tax simply because of increases to the State Pension. It will come into effect from 6 April 2027. See HMRC’s policy paper on Income tax reduction for eligible pensioners.

Stamp Duty Land Tax Relief for the LGPS – a relief will be introduced for the pooling of LGPS debt assets, situated in England and Northern Ireland, to support LGPS reforms, applying to transactions from 28 October 2026 and before 1 April 2032. See HMRC’s policy paper on Stamp duty land tax – LGPS relief for more information.

Technical changes to Inheritance tax on pensions – the changes include allowing a prospective personal representative to direct pension scheme administrators to pay the inheritance tax (IHT) due directly to HMRC when certain conditions are met. We are currently working on an IHT guide for administrators and will ensure if reflects these changes.

These changes will be introduced through the Finance Bill 2026-27.

September 2026 CPI rate announced

On 21 October 2026, the Office for National Statistics announced the annual rate of increase in the Consumer Prices Index (CPI) for September 2026 as 3.5 per cent.

Government policy in recent years has been to base increases under the Pensions (Increase) Act 1971 and revaluation of pension accounts under section 9 of the Public Service Pensions Act 2013 on the annual rate of increase in CPI in September of the previous year. We await confirmation from Government that the revaluation and pensions increase that will apply to LGPS active pension accounts, deferred pensions and pensions in payment in April 2027 will be 3.5 per cent.

Updated GAD factors

MHCLG and GAD have informed us that some members have contacted them about delays in the processing of their benefits after being advised that administering authorities are waiting for updated factors.

All updated factors have now been published. Administering authorities in England, Wales and Scotland therefore have the factors required to calculate and process member benefits.

Club transfer factors for members over CRA

Paragraph 3.31 of the relevant actuarial guidance for England and Wales and Scotland explains how to calculate a transfer value where a member is over their critical retirement age (CRA). In these circumstances, that element of the transfer value should be calculated using the immediate pension factors in the Club tables.

As reported in Bulletin 283, updated Club factors issued by the Cabinet Office took effect from 1 October 2026 and are available in a separate worksheet on the GAD website.

The immediate pension factors are in Club table 101, ‘Central Factors for NPA of age 55’, and Club table 102, ‘Central Factors for NPA of age 60’. Both tables contain the same factors from age 60 onwards.

Legal opinions on survivor benefits and death grants

We have published two legal opinions prepared by Burges Salmon:

Backdated payments relating to survivor equalisation and death grants – considers the legal issues involved in making backdated payments to an estate or beneficiary following the Access and Fairness changes that equalised survivor benefits from April 2026.
Cohabiting partner pensions – covers assessing entitlement to a cohabiting partner’s pension where the member or their partner spent an extended period in a care home or hospital during the two years before the member’s death.

How are members using AI and free AI tool

Local Pensions Partnership Administration and Burges Salmon have published the results of a joint survey exploring how members are using and responding to artificial intelligence (AI). The survey received 1,690 responses.

Only nine per cent of respondents had used AI to research pensions. Of those, six per cent had changed their pension as a result and 52 per cent would consider doing so. Only two per cent would currently be comfortable with AI making pension-related decisions without human review, with greater acceptance where human oversight was included.

The findings highlight a role for member communications: 39 per cent of respondents were unaware that information entered into public AI tools may be stored and used for training, while nearly 81 per cent would welcome guidance from their administrator on using AI safely.

To help organisations take the first steps in developing effective AI governance, Burges Salmon have produced a free ‘Pensions AI Tool’.

Pensions UK publishes AI guide

Pensions UK has published 2030 Ready: A pathway for AI adoption in pensions, which explores how AI is changing how people make financial decisions and what these developments mean for the pensions sector. They highlight that whilst AI provides a major opportunity to improve outcomes, lower costs and make pensions more accessible, its adoption also poses strategic risks.

Employment tribunal dismisses LGPS age discrimination claims

An Employment Tribunal has dismissed age discrimination claims brought by Lee Henley against Thurrock Council after his employment was terminated through redundancy just two days before his 55th birthday.

The timing was significant because, had Mr Henley been made redundant after reaching age 55, he would have been entitled to the immediate payment of his accrued LGPS pension without reduction.

Mr Henley argued that decisions concerning the redundancy timetable amounted to direct or indirect age discrimination. His complaints included the timing and length of the consultation and notice periods and the decision not to extend the consultation period during his sickness absence.

The Tribunal found that none of his complaints were well founded and dismissed the claims.

The case is of particular interest to LGPS employers and administering authorities because it demonstrates the significant pension consequences that can arise where an employee is made redundant shortly before reaching the minimum age for immediate payment of unreduced benefits.

Pensions dashboards

Help shape the MoneyHelper Pensions Dashboard

The MoneyHelper Pensions Dashboard (MHPD) is moving through consumer testing, and MoneyHelper is giving people the opportunity to get involved in research to help shape the service.

Consumer testing is an important part of its development. The testing uses real users and is intended to identify what works well, uncover usability issues and help ensure that the service meets users’ needs. The findings will be used to inform further development of the dashboard and support wider learning across the pensions industry.

MoneyHelper is inviting people to join its research panel and help improve the pensions dashboard through user research.

Administering authorities may wish to make members aware of the opportunity to take part.

TPR: connection deadline

The Pensions Regulator (TPR) reminds pension schemes that they must be fully connected by 31 October 2026, unless they have no relevant members on that date. Failure to connect by this deadline is a breach of legal duties which could result in regulatory action, including financial penalties.

If an administering authority is not fully connected by 31 October 2026, they should report this breach to TPR via their reporting breaches of the law page on or as soon as reasonably practicable after 31 October 2026. More information about reporting breaches can be found in TPR’s code of practice.

Authorities should also prepare for increased member engagement, communications and retirement support. Dashboards provide a real test of data quality, governance and operational capability. TPR’s guidance and checklist can help authorities prepare for the launch of the MHPD.

PDP publishes draft version 2.3 of reporting standards

On 2 October 2026, the Pensions Dashboards Programme (PDP) published draft version 2.3 of the reporting standards. This is supported by a blog explaining what this means for users published on 16 October.

This latest draft sets out the requirements on pension providers and schemes for generating and recording operational information and reporting it to the Money and Pensions Service (MaPS) on a daily basis. PDP makes clear that this latest draft does not change what data must be generated, recorded and reported, only how the data is to be reported to MaPS.

Meanwhile, pension providers and schemes must ensure this data is available to MaPS on request. More information about what data must be made available to MaPS can be found in part 6 of TPR’s Pensions dashboards guidance.

PASA publishes possible match guidance

On 20 October 2026, the Pensions Administration Standards Association published new guidance on resolving possible matches.

A possible match occurs where dashboard information may match a pension record, but further checks are needed to confirm that the record belongs to the user.

The guidance covers areas including contact methods, identity checks, communicating outcomes, unresolved cases, data protection and monitoring. It also highlights how resolving possible matches can help improve pension scheme data.

Training

2026 training programme – new dates added

Due to high demand, we have added extra dates to our 2026 training programme.

Bookings are now open for additional sessions taking place between January and March 2027. Additional dates are available for aggregations, employer role, retirements, transfers in (half day) and transfers out.

The previous understanding tax allowances training course has been split into two half day courses for 2027:

Annual allowance, and
Lump sum allowances and inheritance tax

We have also launched a new Welsh date for our popular Insight Residential course.

Bookings are processed on a first come, first served basis. To ensure fairness, each topic is limited to five delegates per organisation.

If you are unable to secure a place on a course or require more than five places, please email [email protected] with details of the course(s) you wish to attend, including the number of places you require and your preferred format – online or in person. We will maintain a waiting list and consider running additional sessions if demand is sufficiently high.

We will release our full 2027 training programme with dates from April to December 2027 during December 2026.

More information on all our courses and their content is available on the Training and Development pages.

Aggregation – England and Wales

Transfers – England and Wales

If you have any further enquiries, please contact us at [email protected].

Fundamentals training

Our Fundamentals training is now underway with day one already complete. There is still availability to attend days two and three online.

Bookings can be made through the LGA events website or the individual event links below:

Please review the course programme for further details – note the timings apply to the in-person sessions only.

Each online session will be run over two days. Booking one day will automatically book you on both half days. Please note, it is not possible to book for one half day. The online sessions will be delivered using Zoom.

LGPS Governance Conference 2027

The LGPS Governance Conference brings together officers, pension committee and local pension board members, including trade union and employer representatives for two days of expert speakers, discussion and practical insights into current LGPS governance issues. It also provides an opportunity to exchange ideas and experiences with colleagues from across the Scheme.

The 2027 conference will be held in Harrogate on Thursday 28 and Friday 29 January 2027. Delegates can attend in person or online.

View the full programme to find out more.

Please note that in person places with accommodation are sold out. There are a limited number of in person places without accommodation. Online places are unlimited.

To secure your place, book now to attend the LGPS Governance Conference 2027.

LGPS England & Wales Scheme Advisory Board (SAB)

Second LGPS Annual Assembly

The SAB held its second Annual Assembly on 22 October 2026, attended by pension committee and local pension board chairs representing 39 LGPS funds. The programme included updates and discussions on governance, administration, investment oversight and funding, with opportunities for chairs to share experiences.

Read the SAB website article for more information.

Independent Governance Review workshop

On 1 October 2026, SAB hosted a workshop for LGPS officers to discuss practical approaches to Independent Governance Reviews (IGRs). Following feedback, SAB is exploring supporting material with the LGPS Frameworks Team to help funds develop their IGR specifications.

Read the SAB website article for more information and the workshop briefing note.

Pensions Administration Strategy working group update

Following SAB’s invitation for volunteers in Bulletin 281, the pension administration strategy (PAS) working group has now met twice.

The group brings together LGPS officers, technical colleagues from the LGPC and SAB secretariat, and MHCLG officials to help shape practical and proportionate statutory guidance for administering authorities.

Discussions have focused on the purpose and content of a PAS, including employer responsibilities, performance standards, compliance and accountability. The group has also considered how the guidance can support greater consistency across the LGPS while retaining local flexibility, how a PAS interacts with other fund policies and governance arrangements, and whether issues such as cyber resilience and risk management should be included.

Thank you to everyone who has contributed to the group so far. Draft guidance is expected towards the end of the year, with further updates to follow as the work progresses.

Peer Support FAQs

The SAB is developing a new peer support offer to provide funds with a supportive, sector-led approach to improvement.

Drawing on learning from approaches such as the LGA’s corporate peer challenge, it will help funds reflect on current practice, recognise achievements and identify areas where further development could be beneficial.

The Board has published frequently asked questions on the Peer Support page of their website to explain the approach and respond to common queries and feedback received so far.

For more information about peer support or the pilot events currently being planned, please contact [email protected].

Board and committee membership

The SAB publishes membership vacancies on the ‘Work with us’ page of its website. Members of the Board, the committees, the Responsible Investment Advisory Group (RIAG) and its working groups are able to contribute their knowledge and expertise to support the Board’s outputs. Information on any vacant seats on these groups can be found on the mentioned page and we invite fund officers to review the current vacancies.

New investment working groups

The SAB’s new working groups on pool oversight, local investment and reporting met for the first time during the week commencing 28 September 2026.

Members discussed the challenges emerging as the Scheme’s investment reforms are implemented and considered where the Board could provide further support.

An overview of the discussions was presented to the Investment Committee on 19 October 2026 as part of the committee workplan.

The next steps include considering links with other Board and wider LGPS groups and broadening membership to ensure a good range of views is represented. The secretariat will initially approach partner funds and pools that are currently underrepresented.

Reminder – submit your fund annual report for 2025/26

The SAB publishes fund annual reports on the SAB website and uses the data contained in the reports to pull together the Scheme Annual Report. The Scheme Annual Report provides a single source of information about the status of the LGPS for its members, employers and other stakeholders. When fund annual reports for 2025/26 are published, please send them to [email protected] – these can be draft or final reports. The deadline for this is 1 December 2026.

Meeting with the Minister

The Board is awaiting possible dates for the Board Chair, Cllr Roger Phillips, to meet Local Government Minister Jim McMahon MP.

The main purpose of the meeting will be to discuss the UK Government’s evolving position on sanctions and what support may be available to LGPS administering authorities facing ongoing pressure in relation to investments in conflict zones, including questions raised about the application of international law.

All administering authorities

LGPS England & Wales

News articles published in October 2026