Policy paper

Defined benefit pension scheme surplus payments to members

This measure allows defined benefit pension schemes to make authorised surplus payments to members.

• From: HM Revenue & Customs
• Published: 13 July 2026
• Last updated: 28 October 2026 — See all updates

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Surplus payments to members in a defined benefit pension scheme

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Draft legislation

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Draft legislation (accessible version)

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Explanatory note

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Details

This measure introduces a new authorised member surplus payment from registered defined benefit occupational pension schemes. Legislation will be introduced in Finance Bill 2026-27.

It allows trustees to make discretionary payments directly to eligible members from scheme surplus. These payments will be taxed as pension income and the measure will apply to payments made on or after 6 April 2027. 

• Last updated: 28 October 2026
  Show all updates

  1. 28 October 2026

     The Exchequer impact has been updated to reflect an additional financial year, updated data and revised National Accounts methodology. The background has also been updated to clarify the changes made by the Pension Schemes Act 2026.

  2. 13 July 2026

     First published.