Good news for UK pensions: the Pension Protection Fund (PPF) has confirmed that it won’t be charging its usual levy this year. That decision will free up around £45 million across 5,000

Defined Benefit (DB) pension schemes.

Instead of paying into the levy, schemes can now use that money to strengthen pension pots or invest back into the economy—delivering benefits for savers and businesses alike.

This move has been made possible by changes in the Government’s Pension Schemes Bill, which is focused on removing unnecessary barriers and encouraging growth.

Minister for Pensions, Torsten Bell said:

“Rigid rules currently leave pension schemes paying millions into the Pensions Protection Fund even when extra funding is not required.

The Pension Schemes Bill will sweep away those constraints. This will support better funded pension schemes and greater investment by firms”.

The PPF levy exists to protect members’ pensions if their employer goes bust. But with the PPF sitting on a healthy £14 billion surplus, the Government has introduced reforms to make the system more flexible—allowing the levy to be reduced to zero when times are good, while keeping the option to reinstate it if needed in future.

Kate Jones, PPF Chair said:

“I’m pleased that we’re able to save DB schemes £45m this year. The legislative changes we’ve needed to further reduce the levy have made good progress, giving us the confidence to act decisively for this year’s levy.

As we reach this significant milestone on our journey to financial self-sufficiency, we recognise the invaluable contribution levy payers have made over the past 20 years. We couldn’t have delivered the protection and peace of mind to members without them”.

The reforms go beyond the levy. The Pension Schemes Bill also tackles the problem of small, stranded pension pots—rolling them into larger funds. The Government estimates this could boost the average worker’s retirement savings by £29,000, while helping create stronger, more efficient pension schemes.

Overall, the changes are designed to ease costs for employers, strengthen pension security for members, and channel more investment into the UK economy—a central part of the Government’s “Plan for Change.”