On Feb. 3, UK GVT set 2025 pension protection fund levy in new order.
UK GVT issued The Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) Order 2025 (StIn 2025/103), specifying the earnings percentage used to calculate the levy ceiling and the amount of the levy ceiling for use in relation to the Pension Protection Fund (PPF) in the financial year beginning on Apr. 1, 2025.
On Feb. 2024 UK GVT set 2024 pension protection fund levy, see #200099.
Purpose
PPF provides compensation to pension scheme members whose employer becomes insolvent, and whose scheme cannot secure its liabilities at least at compensation levels paid by the PPF; it is funded partly by levy from pension schemes.
PPF Board is established by Pensions Act 2004, S. 107 to provide compensation for members of certain occupational pension schemes under-funded at a certain level.
This Order increases levy ceiling amount which can be collected in 2025/26 financial year by PPF Board; levy ceiling is increased annually in line with any increase in the general level of earnings obtaining in Great Britain during the review period.
Section 175 of Pensions Act 2004 requires the Board impose pension protection levies for each financial year; and section 177(2) of the act provides that the amount of levies for a financial year must not exceed the levy ceiling for that financial year.
Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) Order 2024 (StIn 2024/101) specified levy ceiling for financial year starting Apr. 1, 2024 was £1,349,215,811; general level of earnings rise for Aug. 1, 2023 to Jul. 31, 2024 is 4%.
This Order specifies levy ceiling for financial year Apr. 1, 2025 is £1,403,184,443.44.
The 2024 levy ceiling order is revoked by this 2025 order.
Effectiveness
Articles 1, 2, 3 come into force on Mar. 14, 2025; article 4 in force Mar. 31, 2025.
Article 5 in force on Apr. 1, 2025; this order extends to England, Wales and Scotland.
