Master trusts will face a new tax registration process aimed at boosting savers' protection and aligning it with the incoming authorisation process.
The move was announced in today's Spring Budget documents and builds on additional protections being put together for master trusts in the upcoming Pension Schemes Bill.
It will mean a master trust's tax status will be dependent on their authorisation status with The Pensions Regulator (TPR).
The Budget document said: "The government will amend the tax registration process for master trust pension schemes to align with The Pensions Regulator's new authorisation and supervision regime. This will help to boost consumer protection and improve compliance."
It is unclear when the policy change will come into effect.
The People's Pension director of policy and market engagement Darren Philp welcomed the change but called for it to be implemented across the sector.
"We welcome the news in the budget that the government will amend the tax registration process for master trusts to align with The Pensions Regulator's new authorisation process," he said. "Anything which helps protect consumers is good news, and the move makes total sense.
"Perhaps HMRC should look to tighten the pension tax registration process more widely to protect savers and make it more difficult for scammers to operate, as safeguards here are still seriously lacking."
Xafinity head of proposition development Paul Darlow added the move was in everyone's interests.
"It was good to see that the government has looked at master trust registrations and decided to amend the tax registration process to align with TPR's new authorisation and supervision regime," he said.
"It is in everyone's interests that only well run, bona fide pension schemes be established - anything that can be done to further that aim should be welcomed. It will help to boost consumer confidence and protection, which can only be a good thing."
The measure was announced alongside a 25% charge on transfers to qualified recognised overseas pension schemes (QROPS), which will take effect tomorrow, and confirmation that the money purchase annual allowance (MPAA) will reduce to £4,000.
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