From pooling progress to regulatory warnings and looming tax changes, it’s been another busy week in pensions.

Continuing momentum from last week, Local Government Pension Scheme (LGPS) consolidation gathered pace, with seven LGPS funds - including Cambridgeshire, East Sussex and West Sussex - confirming plans to join Border to Coast, boosting its assets under management (AUM) to £110bn.

The remaining four funds from Access have since chosen LGPS Central as their new pooling partner, following a “comprehensive” review to identify a suitable long-term option.

Support for the UK Stewardship Code also continued to grow, with the Financial Reporting Council (FRC) confirming 299 signatories in its latest update, representing £56trn in AUM.

This included 199 asset managers, 21 service providers, and 79 asset owners, two of which were new additions.

Meanwhile, The Pensions Regulator (TPR) has reiterated its warning for schemes to “stick to the rules” or face enforcement action, after uncovering governance and administration failings, including breaches of investment rules.

TPR also urged trustees to review their decumulation strategies to deliver better retirement outcomes, with interim director of pensions reform, Patrick Coyne, describing adequacy as the “biggest challenge of our time”.

Coyne pointed to recent government research highlighting the scale of the challenge facing defined contribution (DC) savers.

However, despite recent market volatility, DC retirement outcomes have continued to improve, supported by higher annuity rates and stronger investment returns.

On the defined benefit (DB) side, the aggregate surplus of DB pension schemes rose from £230.5bn to £241.1bn in July, as equity market gains pushed some global indices to all-time highs, according to the Pension Protection Fund’s (PPF) 7800 Index.

The average funding ratio also improved from 126.2 per cent in June to 127.7 per cent in July.

Meanwhile, pension funds now account for only 27 per cent of UK AUM, down from 32 per cent in 2020, although DB schemes remain well-funded, with surplus levels holding firm despite warnings over the potential impact of changing mortality trends.

On Thursday, Financial Awareness Day served as a timely reminder of persistent inequalities in pensions.

Indeed, research from Penny revealed a 63 per cent gender gap in the average pension pot sizes transferred through its platform, broadly in line with Association of British Insurers data showing a near 66 per cent gap at retirement.

Hargreaves Lansdown also found evidence of the pension literacy gap, with just 34 per cent of UK adults aware they can contribute to a partner’s pension.

Looking ahead, changes to inheritance tax (IHT) will see it applied to pension pots where the member dies before the minimum pension age from April 2027.

Pensions Age understands that there will be no link to age for the measures that will see unused pensions being subject to IHT charges.

With this in mind, later life lending platform Air has urged advisers and the regulator to address the Consumer Duty challenge posed by including unused pension funds in estates for IHT purposes, warning that clear communication will be key to helping clients plan effectively for the change.

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