Total spend on DB pensions down 70% in three years, says WTW report
WTW provides analysis of the pension disclosures made by FTSE 350 companies with 31 December 2025 year-ends.
WTW's 15th annual review of FTSE 350 pension disclosures (of companies reporting at 31 December 2025) shows that defined benefit (DB) funding remains robust. The report covers 79 companies with more than £300bn of DB pension liabilities at the end of 2025.
Surpluses are widespread, accounting positions are stable, employer pensions costs have continued to fall and risk transfer activity remains high. However, the first half of 2026 has seen elevated uncertainty and opportunity – bringing renewed focus on market volatility but also greater scope to consider how surplus assets can be used to benefit sponsors and members.
The key headlines are for the surveyed companies are:
- In 2025, almost three-quarters of pension contributions went to defined contribution (DC) plans. As recently as 2022, that proportion was only 40%, with DB contributions still dominating. Overall, employers' spending on pension contributions has fallen by a third in three years
- The aggregate DB funding position for companies with 31 December year-ends showed a surplus (now at £33bn) for the fifth year in a row. 70% of companies disclosed that assets in their pension schemes exceeded liabilities as measured under the IAS19 accounting standard (representing a total surplus of £36bn). Over the year, the aggregate funding level increased marginally, from 110% to 111%
- For the first time since 2013, disclosed life expectancies increased for both men and women
- 63% of companies report to have insurance-based assets (annuities or longevity swaps), up from 38% in 2018. The median proportion of assets held for the schemes that have undertaken such transactions has also increased, from 9% in 2018 to 33% in 2025
- The proportion of schemes open to accrual barely fell in 2025 (from 24% to 23%) but is less than half the level in 2017
Download the report to find out more.
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