PPF proposes £100m as levy estimate for 2025/26

• The PPF has proposed a £100m levy estimate for 2025/26, equalling the lowest levy ever. 
• Changes to the methodology will allow the PPF to continue spreading the cost of the levy across a broad pool of risk-based levy payers.  
• PPF continues to engage with government on legislative change which would enable levy to be reduced further, even to zero.
• The PPF is also making it simpler for schemes to get levy credit for deficit reduction contributions, reflecting stakeholder feedback.  

The Pension Protection Fund (PPF) has proposed a £100m levy estimate for 2025/26, the same as 2024/25, equalling the lowest levy ever set.  

The six-week consultation launched today (12 September) seeks stakeholders’ views on the levy estimate and proposed approach to levy collection. Maintaining the levy at this level – equivalent to less than 0.007 per cent of total DB scheme assets – is consistent with the approach consulted on last year.  

David Taylor, Executive Director and General Counsel at the PPF, said: “We’re proposing to charge a levy of £100 million, as we did for 2024/25 – this is our lowest ever levy. Meanwhile, we will continue to engage with the Government on legislative changes to enable us to reduce the levy further and even to zero. We will keep progress on this under review and not charge for longer than we need.” 

Stakeholder feedback last year underscored the importance of, firstly, ensuring the risk-based levy continues to be paid by a broad range of levy payers – rather than allowing the levy to become concentrated on a smaller group; and secondly, ensuring that the levy continues to be distributed in the most risk-reflective way possible.  

The proposed changes will alter the distribution of the levy but the impacts will be limited. The PPF expects schemes will pay broadly the same scheme-based levy as in 2024/25 and, of the c.37 per cent of schemes that pay the risk-based levy, most (63 per cent) would see a decrease whilst only 5 per cent would see an increase of more than 0.01 per cent of liabilities. By comparison with 2023/24 (when the levy was £200m overall), 95 per cent of schemes will pay a lower levy in 2025/26.  

David Taylor added: “The proposed changes to our methodology will help to maintain the pool of risk-based levy payers, thereby spreading the levy more reasonably. More than half of those who pay a risk-based levy will see it decrease and there will be a marginal impact on those schemes who will see an increase. We’ve also acted on valuable stakeholder feedback to make it simpler for schemes to certify deficit reduction payments. I encourage stakeholders to respond and we look forward to hearing views on our proposals.” 

This consultation closes at 5pm on 23rd October 2024. Read the full consultation.
 
Notes to editors  

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 accountable to Parliament through the Secretary of State for the Department for Work and Pensions. It protects close to 9 million members belonging to more than 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 over £32 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). It looks after nearly 440,000 members across PPF and FAS.    

Ends

For further press information contact:
PPF Press Office
020 8406 2107
[email protected]
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