Watch out – 2026 will be a busy year for new regulations

We might only be just one month into the new year, but it is already shaping up to be a busy year for new regulations and legislation.

It’s a full-time job keeping up with the changes from Westminster and the FCA, but it’s important to keep a watchful eye out. These developments can directly affect your clients, so it’s important to know what changes are on the horizon.

Here are four regulatory changes to look out for in 2026.

Finalising how inheritance tax on pensions will work

Since the shock announcement that pensions are to be included in inheritance tax calculations from April 2027, there has been a flurry of activity on how to mitigate the effects on clients, centring on how to rearrange their financial retirement plans.

This year we will find out more about how IHT will be applied to pensions, and what advisers can do to help clients’ families. Many people pick family members as their personal representatives, but they often have little or no knowledge about how to wind up an estate. Pile onto that the need to understand pension schemes, and it’s easy to see how clients and their families are going to need advisers’ support.

Next steps:

• Watch out for further rules from HMRC in the middle of the year.
• Get to know how this will work in practice so you can help clients.
• Help your clients get ready for the change: for example, they may want to consolidate pensions to reduce the number of pension schemes involved in working out IHT due

Design of a new ISA regime

The Government is keen to turn the UK into a nation of investors. It thinks one way to achieve this is to cut the maximum subscription into a cash ISA to £12,000 for those aged under 65.

But this is far from a simple change. To stop people from deliberately circumventing this rule, HMRC anticipates having to make changes to stocks & shares ISAs as well – such as banning transfers to cash ISAs for the under 65s, paying a charge on interest earned on cash in stocks & shares ISAs, and limiting ‘cash like’ investments.

But HMRC needs to proceed very carefully to cause the least amount of disruption to the current ISA regime and maintain the simplicity of ISAs as much as possible.

Next steps:

• HMRC is currently working on the new rules for ISAs.
• Once known, consider how these affect your clients and whether any action is needed before April 2027.
• Keep an eye out for the consultation on the new house-buying ISA, and how the transition from the lifetime ISA to the new ISA will work in practice.

State pension age set to rise again from April

The state pension age will start to gradually rise from 66 to 67 from April 2026, meaning those born between 6 April 1960 and 5 March 1961 will have a state pension of 66 plus a few months. This could be later than they anticipated.

The Government is committed to periodically reviewing the state pension age, and later this year it will receive some reports to help it. Depending on its final decision, the rise in state pension age from 67 to 68 may be brought forward from its planned date of mid-2040s.

Next steps:

• Make sure your clients know what their state pension age is, especially those who were born between 6 April 1960 and 5 March 1961.
• Include their state pension age in their retirement income planning.
• Monitor the Government’s decision about when to raise the stage pension age from 67 to 68 for future generations.

The Pensions Dashboard takes a step closer to launch

All pension schemes are legally required to connect to the Pensions Dashboard by 31 October 2026. MaPS (Money and Pensions Service) is currently carrying out user testing on how the dashboard will work. Once the DWP is satisfied that most people’s pensions can be found on the dashboard, and that it’s providing an excellent customer service, it will announce the launch date for the first dashboard offered through MoneyHelper.

Once launched, most clients will be able to see all their pension schemes in one place, including the current value and the projected income they could receive on retirement.

Next steps:

• Watch out for the DWP’s announcement of a launch date.
• Get ready to help your clients track down lost or forgotten pension plans.
• Figure out how to build the dashboard into your new client processes to help them establish what pensions they have, and whether they need to consolidate them.