Ministers have set the Pension Protection Fund levy ceiling for the financial year starting 1 April 2026 at £1,473,343,665.61 (around £1.473bn) following confirmation of a 5% rise in general earnings over the review period. The Order was made on 30 January 2026, laid before Parliament on 2 February, and commences in stages during March and April.
Under the Pensions Act 2004, the Secretary of State must specify a levy ceiling before each levy year and uprate it in line with earnings. The Board of the Pension Protection Fund must then set levies so that the amount raised does not exceed that ceiling for the year in question. (legislation.gov.uk)
For this cycle, the review period runs across 1 August 2024 to 31 July 2025 as prescribed in regulations. The 5% earnings figure aligns with official data showing nominal average weekly earnings growth around 4.7%–5.0% across mid‑2025. (legislation.gov.uk)
Last year’s ceiling-set by the 2025 Order-was £1,403,184,443.44. A 5% uprating lifts the limit by £70,159,222.17 to this year’s £1,473,343,665.61, continuing the statutory earnings‑link applied annually. (legislation.gov.uk)
The levy ceiling is a legal cap, not the bill that schemes will pay. For 2025/26, the PPF announced that the conventional levy would be recalculated to zero, saving about £45m across roughly 5,000 DB schemes, after government confirmed plans to give the Fund greater flexibility over levy-setting. (ppf.co.uk)
Looking ahead, the PPF has consulted on setting a zero conventional levy again for 2026/27 (subject to the Pension Schemes Bill’s progress) while retaining a separate levy for alternative covenant schemes. Final rules must be determined before the new levy year begins. (ppf.co.uk)
Commencement is staged: articles 1–3 on 14 March 2026, the ceiling figure on 31 March 2026, and the revocation of the 2025 Order on 1 April 2026. The instrument applies in England, Wales and Scotland.
For finance directors and trustees, the immediate cash‑flow signal remains benign for conventional DB schemes given the PPF’s stated intention; nevertheless, keep insolvency risk data and scheme submissions accurate in case the PPF needs to rely on fallback rules, and monitor for the final determination by 31 March 2026. (ppf.co.uk)