Our consultation setting out our plans for the 2021/22 levy rules closed on 24 November. We’re confirming key decisions before we publish the formal levy rules in January.
There was strong support for our proposed measures in response to the COVID-19 pandemic. We’re now confirming the levy rules and policy statement will:
- implement the small scheme adjustment, which halves levies for schemes with less than £20 million in liabilities and tapers levies for schemes with between £20 million and £50 million of liabilities
- implement the reduction in the risk-based levy cap to 0.25 per cent of liabilities from 0.5 per cent
- continue to measure insolvency risk on the basis in use since April, using credit ratings and the PPF specific insolvency risk model operated by Dun & Bradstreet (D&B)
We’ll also confirm the levy estimate of £520 million for 2021/22 and that the levy scaling factor of 0.48 will be retained.
We’ll keep monitoring the impacts of COVID-19 on schemes and sponsors, and respond flexibly to any issues that arise.
What this means for levy payers
This advance confirmation of our plans should help you plan any risk reduction measures ahead of the deadlines at the end of March.
We’ll publish the final, binding, levy rules for 2021/22 in January. We’ll also publish a policy statement summarising the responses we received, and our conclusions.
You can find out more about the proposals we’ll be implementing by reading the consultation.