Retirement-only collective defined contribution (R-CDC) schemes and the introduction of guided retirement are set to be legislated for in the Finance Bill 2027/28, the government’s Autumn Budget papers have confirmed.

According to the documents, the government will make changes to enable the consolidation of defined contribution (DC) pension schemes, alongside the introduction of the guided retirement framework and R-CDC pension schemes.

The changes will include expanding the circumstances in which members can retain certain protections following a pension transfer, while allowing members to transfer from an R-CDC pension into a drawdown arrangement within a specified timeframe.

Separately, the Budget papers confirmed that the government plans to remove the two-year rule for the taxation of pension and lump sum death benefits.

Under the proposed changes, beneficiaries will no longer be subject to tax solely because tax-free pension and lump sum death benefits are paid more than two years after the member’s death.

The change will apply to payments made on or after today (28 October 2026) and will be introduced through the Finance Bill 2026/27.

The news follows Chancellor, John Healey’s, Autumn Budget today, which saw the announcement of a new Pension Tax Allowance to protect low-income pensioners from paying income tax on their state pension and confirmation that "every penny" of the Mineworkers' Pension Scheme (MPS) surplus will go to former miners.

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