PPF publishes PPF Levy for 2025/26 and DWP publishes levy ceiling Order

On January 30, 2025, the PPF published its levy determination and rules for the 2025/26 financial year, following a consultation in Autumn 2024 on technical changes to allow it to maintain a minimum levy of £100 million.

The PPF delayed the usual December publication of the new levy determination while it engaged with the DWP on legislative changes to permit a zero levy to reflect the PPF’s strong funding position.

The PPF has now concluded that it can reasonably accept more risk to its ability to re-establish the levy and has, therefore, reduced the levy estimate from £100 million to £45 million. The PPF has also included a provision in the levy rules that will effectively allow it to set the levy to zero if legislation is brought forward un the new Pension Schemes Bill, and sufficiently progressed, over the course of 2025/26.

The PPF is prepared to be flexible regarding the timing of levy invoicing to allow for the situation to become clear. It will provide an update on its expectations for invoicing by the end of September 2025 at the latest.

On the same day that the levy rules were published, the Government announced that it is considering proposals on changes to primary legislation to allow the PPF greater flexibility to reduce the levy. Consequently, nearly all schemes (99.7 per cent) are expected to see a levy reduction next year.

On January 30, 2025, the DWP made the annual Order setting out the PPF levy ceiling for 2025/26, which is to be just over £1.4bn. The Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) Order 2025 allows for a 4 per cent increase over the previous year following the increase in average weekly earnings in the year to July 31, 2024.

However, as outlined above, the PPF is intending to raise just £45 million in 2025/26 and possibly less.