Retirement planning is set for a significant shift in 2026 as several key reforms under the Pension Schemes Bill and annual reviews take effect. While designed to simplify retirement for millions, these changes introduce new digital requirements for employers and significant adjustments for the self-employed.
And find out how you can be more tax efficient and adjust to these changes.
Pension changes in 2026: at a glance
- state pension rise – the maximum new state pension will rise to approximately £241.30 a week, and the basic state pension increasing to approximately £184.90 a week
- new UK pension dashboard – by Autumn, all pension schemes must be connected to a new secure dashboard, allowing you to view all your pension pots in one place
- net pay top-ups introduced – for the first time, low-earning employees in net pay schemes who don’t pay income tax will receive automatic top-up payments from HMRC
- voluntary Class 2 NICs change – for periods spent working abroad, the self-employed won’t be able to do voluntary Class 2 NICs from April 2026, meaning self-employed will need to pay more through Class 3 NICs in the future
How are pensions changing in 2026?
The 2026 reforms focus heavily on making it easier for workers to track and consolidate their savings – plus increases to the state pension as well as continuing the triple-lock guarantee.
The UK pension dashboard
By October 2026, all pension schemes must be connected to a new secure dashboard, allowing you to view all your pension pots in one place. So you won’t need to waste time tracking down old pensions.
Alongside the dashboard, there’ll be automatic small pot consolidations too. This means pension pots under £1,000 can be consolidated for free.
This new dashboard should make it easier to see the exact amount you’ve contributed to your pension and reduce the need to pay for a pension tracking service.
State pension increases
Under the triple-lock guarantee, the state pension is expected to rise by approximately 4.8 per cent in April 2026.
The maximum new state pension will rise to approximately £241.30 per week. And the basic state pension will increase to approximately £184.90 per week.
Net pay top-ups are also being introduced for the first time. This is when low-earning employees in net pay schemes who don’t pay income tax will receive automatic top-up payments from HMRC.
This makes sure they receive the same tax relief as those on regular pension schemes.
Voluntary Class 2 National Insurance Contributions scrapped
The option to pay voluntary Class 2 NICs for periods spent working abroad will be removed from April 2026. This means the only way to do NICs while working abroad will be through the Class 3 rate.
Class 2 NICs were the cheapest way for the self-employed people working abroad to still qualify for the state pension. To receive any UK State Pension, you need at least 10 qualifying years of contributions – for the full pension, you need 35 years.
The Class 2 rate worked out at £182 a year, while Class 3 was £907 a year. Because Class 3 NICs will be the new standard rate, it means self-employed will need to contribute much more a year to qualify for the state pension in the future.
So if you’re self-employed and plan to work internationally – consider the extra costs involved when you’re budgeting.
What it means for small business owners
While processes like the auto-enrolment thresholds remain unchanged for the 2026-27 tax year, employers still face new operational tasks.
With the introduction of the pension dashboard, small businesses have to make sure their pension providers are ready to link with the national pension dashboard by the October 2026 deadline.
While pension providers handle the technical link, employers need to make sure employee data is accurate to avoid mismatched records.
How to be tax efficient
With the State Pension rising, it could be worth using a self-Invested personal pension (SIPP) to remain tax-efficient if you’re self-employed. Especially as higher pension income might push some closer to the personal allowance threshold.
A SIPP allows you to lower your adjusted net income, which is the figure HMRC uses to calculate your tax bill and personal allowance eligibility.
By making a personal contribution to a SIPP, you effectively ‘spend’ your income before HMRC can tax it. For example, if your total income is £13,000, a £500 SIPP contribution could bring your taxable income back below the £12,570 threshold, eliminating your income tax liability for the year.
More small business tax guides
- A guide to income tax for the self-employed
- IR35 support and guides for contractors
- A guide to UK corporation tax for small businesses
- How does VAT affect businesses in the UK
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