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  • The PPF’s strong funding position means no need to act to raise the levy now 
  • Targeted measures mean smallest schemes will see their levy halved and no scheme will pay more than 0.25% of its liabilities, down from 0.5%  
  • Levy estimate drops to £520 million for 2021/22  

The PPF’s strong financial position at the start of the pandemic – in terms of both its balance sheet and defensive investment strategy - has meant that despite the risk of increased claims, it has been able to avoid proactively increasing the levy. This, together with an update in the way scheme underfunding is calculated and the proposals being put forward to support schemes in the coming year, means that the amount of levy the PPF expects to collect will drop to £520 million in 2021/22. This is £100 million lower than the £620 million estimate for the 2020/21 levy year.   

The PPF is proposing two developments for the 2021/22 levy year that help schemes and employers with the cost of the levy:

-  to reflect small schemes’ risk to the PPF better, the levy for schemes with less than £20 million in liabilities will be cut in half, and the reduction will be tapered so that only schemes with £50 million or more in liabilities will be charged in full; this long-term measure will benefit close to 2,000 schemes with SME employers, at very limited overall cost
-  the cap on the amount of levy paid by any individual scheme will be cut from 0.5 per cent of that scheme’s liabilities to 0.25 per cent 

David Taylor, Executive Director and General Counsel at the PPF said: “The current environment makes setting an appropriate level for the levy particularly challenging. There is significant uncertainty about how claims and risks will develop so we’ve moved away from a multi-year approach to setting the rules. This means we can respond dynamically when setting the amount of levy we collect each year. In time, we’ll need to consider what further steps to take to ensure an appropriate levy in 2022/23 and beyond, alongside our review next year of the PPF’s funding strategy. But for now, we believe the changes we’re proposing for 2021/22 will provide valuable support to the schemes and employers.

“I thank the members of the SME Forum who helped inform our thinking. I encourage all our stakeholders to take part in the consultation and look forward to hearing their views.”

The levy consultation is open from 29 September to 24 November

To read and respond to the consultation visit our Help shape our rules page.


For further press information contact:

PPF Press Office
020 8406 2107
[email protected]
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