The Pension Protection Fund (PPF) has opened a consultation on the 2026-27 levy, proposing to keep the charge at zero for the roughly 5,000 conventional defined benefit (DB) schemes eligible for coverage.
The proposal builds on the recent recalculation of the 2025-26 levy to zero, which followed progress on the levy measures in the Pension Schemes Bill.
The PPF confirmed in September that it planned not to charge a levy for this financial year due to its strong financial position, and it expects future financial strength to come mainly from investment returns.
The Pension Schemes Bill contains legislative changes designed to facilitate this change to become permanent. However, because the timing of the bill is uncertain, the PPF has adopted a flexible approach that allows it to delay a final decision until closer to the end of the financial year.
In its announcement today (17 November), the PPF said if there was enough certainty that the bill would become law, it would confirm a zero charge for 2026-27. If not, it will use last year’s estimate and rules as a fallback. This approach would still allow the levy to be recalculated to zero later if the legislation progresses.
The bill is currently at the report stage, but there is no date for this stage to commence, according to the UK parliament website.
The consultation also confirms that the PPF will continue to charge an alternative covenant scheme levy for applicable schemes. It is proposing several refinements for next year and plans a wider review of the methodology in the medium term.
Shalin Bhagwan, chief actuary at the PPF, said: “Our intent for next year is to not charge a PPF levy to conventional schemes. Provided the legislative changes we need continue to make good progress and we have high confidence they will become law, we’ll then confirm a zero levy for next year.”
The consultation closes on 5 January 2026.
