UK pension transfer rules expand to CDC schemes

If you saw this as a dry pensions regulation, you would not be wrong. But you would miss the point. The Department for Work and Pensions has made a small amendment to the 1991 preservation rules, effective from 31 July 2026, that widens when some workplace pension rights can be moved without the saver signing a consent form. Those 1991 rules sit in the part of pensions law dealing with short service benefit, which an earlier DWP explanatory memorandum describes as the preserved benefit for someone who leaves a scheme before retirement and does not start drawing a pension straight away. (gov.uk) The new text is only one sentence long. It inserts paragraph 7A into regulation 12 and says a transfer without consent is allowed where the receiving scheme or section is authorised under Part 1 of the Pension Schemes Act 2021. The official explanatory note says this applies to members' relevant money purchase rights. (gov.uk)

If the phrase collective money purchase makes you want to shut the tab, stay with us. In everyday use, these schemes are usually called collective defined contribution, or CDC. The Pension Schemes Act 2021 says the benefits in these schemes must be variable so the amount paid can be adjusted to match the money available and the projected cost of paying benefits. In other words, there is no fixed promise and no employer guarantee of a deficit. (legislation.gov.uk) That is why CDC is best understood as a pooled retirement income model rather than a traditional pension promise. The 2021 Act says qualifying schemes must be occupational pension schemes set up under trust and must provide a pension income in retirement, while The Pensions Regulator uses CDC as the everyday label for the same legal idea. (legislation.gov.uk)

The next bit of jargon matters just as much. Relevant money purchase rights are, in legal terms, money purchase benefits where the assets behind them do not include a guarantee or promise about the amount of the benefit or the amount available to provide it. If you want the classroom version, think of rights linked to a pension pot without a built-in guarantee. (legislation.gov.uk) Since 2018, the law has already allowed these rights to be bulk transferred without consent in three main situations: when the receiving scheme is an authorised master trust, when the schemes sit under connected employers, or when trustees take written advice from an independent qualified adviser. The 2026 amendment keeps all of that in place and adds one more route: an authorised CDC scheme or section. (legislation.gov.uk)

There is a reason ministers chose authorised CDC schemes, not just any scheme with CDC in the brochure. In its consultation, the Department for Work and Pensions said the point of the rule is that the receiving scheme has passed a robust authorisation process and remains under regulatory supervision. That is the same policy logic already used for authorised master trusts. (gov.uk) The Pension Schemes Act 2021 sets out what that authorisation means. The Pensions Regulator must be satisfied about the people running the scheme, the soundness of its design, its financial sustainability, its communications, its systems and processes, and its continuity strategy if there is a triggering event. So the law is not saying consent no longer matters. It is saying that, in a tightly defined setting, authorisation can stand in for one layer of individual sign-off. (legislation.gov.uk)

What this means for you depends on where you are in the pensions system. If you are in an ordinary workplace pension, this does not suddenly mean your trustees can move your savings wherever they like. The rule only covers occupational schemes, only covers relevant money purchase rights, and only works where the receiving scheme or section meets the legal conditions. Trustees' best-interests duties still sit in the background, as DWP explained when it redesigned the no-consent transfer rules in 2018. (gov.uk) But the policy goal is bigger than this one line of law. In its 2025 retirement CDC consultation, DWP said further legislation and this amendment would help authorised retirement CDC schemes partner with defined contribution schemes and receive transfers at retirement, mainly through default retirement plans. That suggests this regulation is part of the plumbing needed if CDC is going to become a real option at retirement, rather than a niche idea on paper. (gov.uk)

For now, though, the market is still small. The Pensions Regulator's published list of authorised CDC schemes currently names one scheme: the Royal Mail Collective Pension Plan. So this looks less like an overnight shift for millions of savers and more like a rule change designed to make room for future authorised schemes. That final comparison is our reading of the official list and the new regulation, not a direct government quote. (thepensionsregulator.gov.uk) The government's explanatory note also says no full impact assessment was produced because no significant impact on the private, voluntary or public sectors is expected. Sometimes that kind of sentence makes a regulation sound unimportant. Here, it is better to read it as a reminder that the legal change is narrow, while the lesson is wider: pension systems often change one quiet rule at a time. (gov.uk)