PPF Board look to January for levy decision

Following positive engagement with stakeholders as part of their consultation on the 2025/26 levy rules the PPF will conclude its decision making in January.
 
Legislative change is needed to provide the PPF with greater flexibility and ultimately enable it to set a zero levy. Pending legislative change, the PPF consulted this autumn on maintaining the levy at £100m next year. 

Following the consultation the PPF Board has been carefully considering all options, including reducing the levy further before any legislative change. As part of this the PPF has been working closely with DWP. 

Kate Jones, PPF Chair, said: “The Board is grateful to those who responded to our consultation and for the chance to openly engage with other key stakeholders. We need to balance the needs of all our stakeholders with our financial responsibilities and have been actively considering a wide range of options. To allow more time for this work, including engagement with colleagues at DWP, the Board will conclude its decision on next year’s levy in January.”

“We recognise the need to minimise uncertainty for levy payers but trust taking the time to get this right will be viewed positively. Ultimately, we don’t want to charge the levy for any longer than is needed and are working towards this goal.” 

The PPF will now look to finalise and publish its levy determination and rules for 2025/26 by end January. 

Kate Jones, PPF Chair, continued “We recognise the vital importance of balancing both levy payer and member interests, and further government consideration of PPF and FAS indexation rules would be welcomed. We will continue to work constructively with DWP in the interests of all our stakeholders.”    

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Notes to editors
- The PPF’s founding legislation – the Pensions Act 2004 – places a legal limit of 25 per cent on the extent to which the levy can be increased from year to year. 
- This was intended at the time to protect levy payers from sharp increases in the levy. 
- However, it now effectively constrains the PPF’s ability to reestablish a material levy in a reasonable timeframe should a funding crisis arise. 
- As stands, legislative constraints mean if the PPF reduced the levy to zero it couldn’t start it again and, the lower the levy falls, the longer it would take to raise it to a material level. 
- The PPF has, since 2022, signalled that legislative changes are needed to provide it with greater flexibility on setting levy. 

About the PPF 
The Pension Protection Fund (PPF) is a public corporation, set up by the Pensions Act 2004, and has been protecting members of eligible defined benefit (DB) pension schemes across the UK since 2005. The PPF is run by an independent Board and is accountable to Parliament through the Secretary of State for the Department for Work and Pensions. It protects close to 9 million members belonging to around 5,000 pension schemes. If an employer collapses and its DB pension scheme cannot pay members what they were promised, the PPF pays compensation for their lost pensions. The PPF is funded by a levy charged to eligible schemes, the return on its investments, assets from pension schemes transferred into the PPF, and recoveries from insolvent employers. 

The PPF is one of the UK’s largest asset owners with £32.1 billion of assets under management. Separate and additionally to the PPF, it also administers the Fraud Compensation Fund (FCF) and the government’s Financial Assistance Scheme (FAS). The PPF looks after over 430,000 members across the PPF and FAS.