24.11.2025
I am proud of the progress we've made in the first year of our 2025–28 strategy, 'Delivering security, supporting growth'. This was a year focused on supporting members, maintaining financial resilience and strengthening the organisation for the future, delivering the majority of our business plan objectives.
Protecting the financial futures of our members and members of DB schemes Our purpose is to protect the financial futures of our members and the millions of people throughout the UK who belong to DB pension schemes. We paid £1.2 billion in compensation to members during the year. We also completed 37 Fraud Compensation Fund cases, resulting in payments of more than £100 million to help provide restitution for the victims of pension fraud.
We manage the PPF for the long term, providing the backstop for the £1 trillion of liabilities across 4,840 DB schemes. Despite a challenging macroeconomic environment, our growth portfolio delivered a 7.1 per cent return, outperforming our five-year rolling target and adding around £1.3 billion to our future claims and risk reserves.
Our liability-driven investments helped keep our funding position stable as market conditions changed. Our investment team’s work was recognised again this year, winning DB Pension Scheme of the Year at the Pensions Age Awards 2026 and the Fixed Income category at the IPE Awards 2025.
Legislative changes benefitting members and schemes
We have achieved considerable success in acting in the interests of those we protect. Six measures were included in the Pension Schemes Act 2026 that deliver benefits for PPF and FAS members, and the UK businesses sponsoring DB schemes. Most significantly, it enables us to begin paying inflation-linked increases, up to 2.5 per cent per year, on pre-1997 benefits where members’ former scheme rules provided for it. We estimate that this change will benefit more than a quarter of a million PPF and FAS members, which would have reduced our future PPF claims and risk reserves by £1.4 billion to £13.7 billion as at 31 March 2026.For the schemes we protect, the Act gives us greater flexibility to set the PPF levy to zero. Recognising the Act’s progress and the broad support for this shift, we did not charge conventional schemes a PPF levy in 2025/26. And in February, we confirmed we will not charge a conventional levy in 2026/27, reducing costs for sponsoring employers while maintaining our ability to manage risks responsibly. This supports a more efficient DB system, in line with the government’s focus on enabling investment and growth in the UK economy.
Shaping change in the pensions industry
We continued to play an active role in helping shape change in the pensions industry, particularly in how schemes move through the PPF assessment period after sponsoring employer insolvency. We completed a review of our assessment process for overfunded schemes, identifying ways to make transactions quicker, cheaper and more predictable.
Strengthening our organisation for the future
Significant progress has been made as we adapt and evolve the PPF. We undertook a review of our funding framework and strategy, ensuring it continues to evolve considering the changed environment, including the move to a zero PPF levy and the introduction of pre-1997 inflation increases.We also continued to invest in technology to improve efficiency and outcomes. Our use of artificial intelligence (AI) is already delivering benefits, saving many hours for an initial cohort of users. We have embedded its use across the organisation: 90 per cent of colleagues now use AI daily in their work and we continue to see productivity gains. All of our AI activities are underpinned by clear governance and strong data protection.
None of this is possible without the commitment and expertise of our people. In April 2026, we completed the development of a new people strategy to support the delivery of our organisational strategy, ensuring we have the skills, leadership capability and culture needed for the future, and reflecting the changing external environment and generational shifts in the workforce. We have strengthened our leadership team with key appointments across HR, Risk and Technology.
We published our 2025–28 Diversity, Equity and Inclusion strategy, stepping up on previous years and extending our focus to include social mobility and LGBTQ+ as core priorities. This reflects our view that people do not all start from the same place or face the same barriers to opportunity, and that broadening access to skills and talent is essential to both our organisational effectiveness and the long-term health of the UK economy.
In parallel, we continue to embed sustainability into our strategy, operations and investment management, recognising our role as a long-term investor and steward of public funds, and contributing to the resilience of the pensions system and the communities we serve. I am delighted that the Board has recommitted to our zero emissions target by 2035.
Progress against our strategic priorities These achievements demonstrate tangible progress against our strategic priorities: acting in the interests of those we protect, helping to shape change in the pensions industry, adapting and evolving, and building on our strong foundations.
In the year ahead, our focus is on delivery: implementing legislative change; deepening digital capability; improving efficiency and service; and maintaining strong investment performance within our risk appetite.
View our Annual Report 2025/26
