PPF confirms zero levy for 2026/27

• PPF confirms it won’t charge conventional DB schemes a PPF levy next year
• Proportionate risk-based ACS levy will be maintained; PPF will work with industry to evolve its methodology over the course of 2026/27 

The Pension Protection Fund (PPF) has today announced it will set a zero levy for next year (2026-27) for the c.5,000 conventional defined benefit (DB) schemes it protects. The decision marks the second consecutive year that conventional schemes will not be charged a PPF levy.  

In the 2026/27 PPF Levy consultation the PPF expressed its intent to set a zero levy for conventional DB schemes dependent on the progress of the levy measures contained in the Pension Schemes Bill. As such, the PPF Board is reassured by the consideration given to the changes needed to conclude its decision making. 

Michelle Ostermann, PPF CEO, said: “This is an important time for pensions. Not charging a levy to conventional schemes in 2026/27 reflects the evolution of risk in this sector and will reduce costs for DB schemes and employers. We’re grateful to all those who responded to our recent consultation, and more broadly for the ongoing dialogue and productive engagement with our members and levy payers throughout our 20-year history.”   

The PPF has confirmed it will maintain a proportionate ACS (Alternative Covenant Schemes) levy next year. With the framework for superfunds evolving, and with the sector’s potential for significant growth, the PPF will continue to apply an ACS levy in 2026/27.  

 The PPF is committed to working closely with our stakeholders to review the ACS levy methodology for 2027/28 to ensure it continues to be proportionate to the risks posed.  

 The PPF will publish its Policy Statement and final rules for the 2026/27 levy next month.  

 

--ENDS--

Notes to Editors  

 - ‘Conventional’ refers to those DB schemes which have a substantive sponsoring employer. Almost all the c.5,000 remaining DB schemes in the UK are ‘conventional’ schemes.  

- PPF reserves – The PPF holds reserves to cover future risks, such as potential future claims on the fund and longevity risk on our current pension liabilities. In this sense the reserves represent a contingent liability which could crystalise if these events were to occur – it is not a ‘surplus.’ Holding suitable reserves is essential to ensure the PPF can provide financial security for its current and future members and reduce risks for levy payers. The PPF’s current £14bn reserve ultimately underwrites the £1tr of liabilities in the c.5,000 remaining DB schemes in the UK.  

- The PPF Levy (including the ACS Levy) is entirely separate from the Administration Levy:  

• The PPF levy is set by the PPF, and funds PPF compensation  

• The Administration Levy is set by DWP, collected by TPR and currently funds some of the PPF’s operating costs.  
  
  The government introduced amendments to the Pension Schemes Bill which will abolish the Administration Levy and enable the PPF to cover all its operating costs from the core PPF Fund.