Note D: What the BBC spends on its people
The BBC employs a significant number of people. It also provides pension benefits to both current and past employees. This section has two main parts; the first details employee numbers (excluding freelancers and agency staff), staff costs and transactions with members of the BBC Board and BBC Executive Committee who served during the year. The second presents the key information relating to the BBC Group’s pension plans.
The analysis provided in the pension notes is based on the IAS 19 Employee Benefits estimate of the scheme’s assets and liabilities as at 31 March 2026. This accounting valuation provides a snapshot of the scheme at the year-end date and is therefore sensitive to short-term fluctuations within markets.
To ensure the scheme is adequately funded to meet its liabilities, a statutory triennial actuarial valuation is also performed as an appraisal of the fund’s assets versus liabilities. This will often differ to the IAS 19 accounting valuation due to the difference in discount rates used to determine the liability. Whilst the actuarial valuation uses discount rates based on gilts, the accounting valuation uses discount rates based on high credit corporate bonds. Generally therefore, the accounting valuation presents a more favourable funding position than that required on an actuarial basis.
Risk – Defined benefit pension scheme
Changes in the assumptions used to calculate the IAS 19 valuation of the BBC’s defined benefit pension scheme can result in large swings in the final numbers disclosed. The BBC therefore carries a risk of a material misstatement arising on this highly judgemental area if the assumptions used are not appropriate.
Sensitivity analysis on these assumptions (discount, inflation and mortality rates) is presented in Note D7.5 to reflect the impact of this risk.
The defined benefit pension scheme exposes the BBC to the following risks:
- Investment risk - Actual returns may differ from expected returns. Investments are diversified, across and within asset classes, to avoid over-exposure to any one asset class or market.
- Currency risk - Scheme assets are subject to currency risk because some of the Scheme’s investments are held in overseas markets, either as segregated investments or via pooled investment vehicles (PIV). The Trustees limit overseas currency exposure through a currency hedging policy which seeks to partially hedge the major currency exposures (euro and US dollar).
- Counterparty risk - A counterparty may default whilst owing money to the scheme. Collateral is posted by the counterparty for long-term transactions when the valuation of the transaction is favourable to the scheme.
- Interest rate risk - A fall in interest rates would cause the present value of liabilities to rise. To mitigate this risk, the scheme’s Trustees invest in bonds, derivatives and other investments with predictable long-term cash flows that will tend to rise in price if interest rates fall.
- Longevity risk - Longer life expectancy would increase the Scheme’s liabilities. The Scheme’s Trustees regularly assess the possibility and value of hedging the Scheme’s longevity risk. The scheme has also implemented longevity swaps to hedge most of the Scheme’s current pensioner longevity risk.
- Inflation risk - An increase in expected inflation will cause the present value of liabilities to rise if it is not accompanied by a rise in interest rates. To mitigate this risk, the scheme’s Trustees invest in index-linked bonds, derivatives and other assets where value is likely to increase if inflation rises.
- Liquidity risk - The scheme may not have sufficient liquid assets to allow it to meet its liabilities and other obligations as they fall due. The amount of cash held to pay benefits is assessed well in advance to minimise unforeseen sales and transaction costs and the large majority of the scheme’s assets are invested in highly liquid assets.
Significant estimate – Defined benefit pension scheme
Judgement is required when determining the assumptions used in calculating the pension costs and obligations of the BBC’s defined benefit schemes. These include the discount rate, inflation rate and mortality.
The BBC mitigates this risk by using assumptions recommended by independent actuarial specialists, which are reviewed and approved by BBC senior management (see Audit and Risk Committee report).
D1 Persons employed
The average full-time equivalent number of persons employed in the year was:
2026
| Average | Staff excluding apprentices | Apprentices* | Total number |
|---|---|---|---|
PSB Group | 16,863 | 454 | 17,317 |
Commercial Group | 3,992 | 67 | 4,059 |
Group total | 20,855 | 521 | 21,376 |
* Includes Early Careers and FJAA apprentices
2025
| Average | Staff excluding apprentices | Apprentices* | Total number |
|---|---|---|---|
PSB Group | 17,103 | 428 | 17,531 |
Commercial Group | 4,178 | 64 | 4,242 |
Group total | 21,281 | 492 | 21,773 |
* Includes Early Careers and FJAA apprentices
Within the averages above 2,594 (2025: 2,363) part-time employees have been included at their full-time equivalent of 1,507 (2025: 1,588).
In addition to the above, the BBC employed an average full-time equivalent of 1,527 (2025: 1,518) persons on a casual contract.
The full-time equivalent number of persons employed at 31 March was:
2026
| At March 31 | Staff excluding apprentices | Apprentices* | Total number |
|---|---|---|---|
PSB Group | 16,784 | 426 | 17,210 |
Commercial Group | 3,923 | 49 | 3,972 |
Group total | 20,707 | 475 | 21,182 |
2025
| At March 31 | Staff excluding apprentices | Apprentices* | Total number |
|---|---|---|---|
PSB Group | 16,815 | 385 | 17,200 |
Commercial Group | 4,249 | 59 | 4,308 |
Group total | 21,064 | 444 | 21,508 |
* Includes Early Careers and FJAA apprentices.
D2 Employee remuneration
Other short- and long-term employee benefits, including holiday pay and long service leave, are recognised as an expense over the period in which they accrue.
Termination benefits (redundancy costs) are recognised when the BBC has a present obligation as a result of a past event and it is probable that it will result in a payment. This is typically the earlier of when the BBC can no longer withdraw or recognises costs for a restructure.
| Note | 2026 £m | 2025 £m | |
|---|---|---|---|
Salaries and wages |
| 1,323 | 1,316 |
Social security costs |
| 191 | 162 |
Pension costs |
|
|
|
Main scheme (defined benefit) | 67 | 74 | |
Other schemes | 123 | 110 | |
Total |
| 1,704 | 1,662 |
Employee pension contributions made via salary sacrifice are included within pension costs, with a corresponding reduction in salaries and wages.
D3 Remuneration of the BBC Board and BBC Executive Committee
The total emoluments of the members of the BBC Board and BBC Executive Committee are disclosed in the Remuneration report.
D4 Key management personnel compensation
Key management personnel are those people who have authority and responsibility for planning, directing and controlling the activities of the BBC. This includes members of the BBC Board and BBC Executive Committee, including the non-executive directors (see the BBC Remuneration report).
At 31 March 2026, 23 individuals were classified as key management personnel (2025: 22).
Information about the BBC’s structure, senior staff salaries and expenses are published on the BBC’s website. Key management personnel compensation during the year was as follows:
| 2026 £m | 2025 £m | |
|---|---|---|
Short-term employee benefits | 6.8 | 6.0 |
Pension benefits | 0.3 | 0.1 |
Compensation for loss of office | 0.2 | - |
Total | 7.3 | 6.1 |
D5 Related party transactions with key management personnel
The disclosures included in this note comprise only those transactions that meet the definition of a related party under IAS 24 Related Party Disclosures. During the year, the BBC reassessed its related party relationships and disclosures against IAS 24 and, following this reassessment, includes only those disclosures required by the standard.
Juniper Communications Limited (“Juniper”) was formerly co‑owned by BBC Chair Samir Shah (70%) and his wife, Belkis Shah (20%), until the disposal of their interests on 4 August 2024. Accordingly, Juniper was not a related party of the BBC during the financial year ended 31 March 2026.
The BBC continued to transact with Juniper during the year in respect of pre‑existing commissioning arrangements. These transactions were conducted in the ordinary course of business and on an arm’s length basis.
D6 Group pension plans
The BBC Group’s defined contribution pension plans do not give rise to balance sheet pension assets/(liabilities) as there is no ongoing liability for the employer from these plans once the contributions due for the year have been settled.
The amounts charged as expenditure for the defined contribution plans represent the contributions payable by the BBC for the accounting period.
The BBC Group has two defined benefit pension schemes, the BBC Pension Scheme and the Unfunded Scheme.
The BBC Pension Scheme is accounted for within its own financial statements but gives rise to net liabilities which are included on the BBC Group balance sheet as the BBC bears the risks of investment returns, life expectancies and inflation, which impact the future pension payment amounts. The net position consists of two parts:
- Scheme liabilities: the present value of the future pension payments the BBC is required to pay in respect of employee service performed up to the balance sheet date; and
- Scheme assets: the assets held by the pension fund, into which the BBC pays annual contributions. These assets are used to fund the payments to retired members and to generate returns to fund future pension payments.
The Pension Scheme, of which a significant minority of staff are members, provides benefits based on pensionable pay. The assets of the BBC’s Pension Scheme are held separately from those of the BBC.
The Unfunded Scheme gives rise to net liabilities, representing the present value of liabilities expected to be paid to remaining members, and is reported collectively with the BBC Pension Scheme above in the balance sheet.
Pension scheme assets are measured at fair value. Pension scheme liabilities are measured using the projected unit credit method. The present value of scheme liabilities is calculated by discounting estimated future cash outflows at the current rate of return on a high-quality corporate bond of equivalent term and currency to the liabilities.
Should the pension scheme be in a net asset position, under the Pension Scheme rules, the BBC considers that they are entitled to any surplus on the pension scheme in the event that it is wound up. It is the actuarial valuation, as opposed to the IAS 19 estimate, which would be used to determine the amount due if the scheme was wound up.
Remeasurement comprising gains and losses and the return on scheme assets (excluding interest) are recognised immediately in the balance sheet with a charge or credit to the consolidated statement of comprehensive expenditure in the period in which they occur.
Remeasurement recorded in the consolidated statement of comprehensive expenditure is not recycled through the expenditure statement. When the benefits of a plan are changed the resulting change in benefit that relates to past service is then recognised immediately in the consolidated expenditure statement. Net interest is calculated by applying a discount rate to the net defined benefit liability or asset. Defined benefit costs are split into three categories:
- current service cost, past service cost and gains and losses on settlements and curtailments;
- net interest expense or income; and
- remeasurement.
The current service cost and past service cost are included within operating costs in the consolidated expenditure statement. Curtailments gains and losses are accounted for as past service cost. Net interest expense or income relating to the funded defined benefit pension plans is included within ‘finance income’ or ‘finance costs’, as relevant, in the consolidated expenditure statement.
Administration costs directly related to the management of plan assets are deducted from the return on plan assets, which are recorded as remeasurements in the consolidated expenditure statement. Other administrative scheme expenses associated with running the scheme are recorded within operating expenses when incurred.
The retirement benefit obligation recognised in the consolidated balance sheet represents the deficit or surplus in the BBC’s defined benefit schemes. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the schemes or reductions in future contributions to the schemes.
The pension scheme is valued under two bases:
- Funding valuation basis: This measure is used by the scheme trustees as part of the mandatory three-yearly scheme valuation. The assumptions tend to carry a higher level of caution as the measurement is done on the basis of being able to pay out full scheme benefits. This measurement also provides the basis for any deficit recovery contribution required.
- IAS 19 Accounting basis: This valuation is performed at each year-end date to disclose the value of the defined benefit pension scheme within the Annual Report & Accounts. The measurement details are prescribed by IAS 19 to provide a consistent measurement of accounting across different companies.
D6.1 Group pension plans
2026
| BBC Pension Scheme £m | Unfunded Scheme £m | Total £m | |
|---|---|---|---|
Surplus/(deficit) in scheme at the start of the year | 874 | (6) | 868 |
Movement in the year: |
|
|
|
Current service cost | (65) | – | (65) |
Contributions (from employer) | 63 | – | 63 |
Past service costs | (2) | – | (2) |
Administration costs incurred | (8) | – | (8) |
Net finance income/(expenditure) | 52 | – | 52 |
Remeasurement (losses)/gains | (420) | 2 | (418) |
Surplus/(deficit) in scheme at the end of the year | 494 | (4) | 490 |
2025
| BBC Pension Scheme £m | Unfunded Scheme £m | Total £m | |
|---|---|---|---|
Surplus/(deficit) in scheme at the start of the year | (114) | (7) | (121) |
Movement in the year: |
|
|
|
Current service cost | (74) | – | (74) |
Contributions (from employer) | 116 | – | 116 |
Past service costs | – | – | – |
Administration costs incurred | (9) | – | (9) |
Net finance income/(expenditure) | (3) | – | (3) |
Remeasurement (losses)/gains | 958 | 1 | 959 |
Surplus/(deficit) in scheme at the end of the year | 874 | (6) | 868 |
- Current service cost is the underlying cost to the BBC of pension rights earned by employees during the year.
- Net finance income is the net of the expected return on assets and the interest charged on liabilities.
- Remeasurement gains and losses arise when the actual performance of the scheme is different from that predicted. This typically occurs through changes in the underlying assumptions, specifically discount factors.
The assumptions for pension scheme liabilities of the Unfunded Scheme are the same as the main scheme. As the scheme is unfunded there are no assets.
D6.2 BBC Pension Scheme financial position
| IAS 19 valuation | Note | 2026 £m | 2025 £m |
|---|---|---|---|
Scheme assets | 12,445 | 12,558 | |
Scheme liabilities | (11,951) | (11,684) | |
Surplus |
| 494 | 874 |
Percentage by which scheme assets cover liabilities |
| 104% | 107% |
The IAS 19 Pensions valuation takes assets at their market value and discounts the accrued liabilities by reference to the discount rate of an AA-rated corporate bond
A deferred tax asset or liability in relation to the scheme does not arise for the BBC because most of the BBC’s PSB Group activity is not subject to taxation.
D6.3 Pension charges in the consolidated expenditure statement
2026
| Note | BBC Pension Scheme (Defined benefit scheme) £m | Unfunded Scheme (Defined benefit scheme) £m | Defined contribution scheme £m | All schemes £m | |
|---|---|---|---|---|---|
Current service cost | (65) | – | (123) | (188) | |
Past service costs |
| (2) | – | – | (2) |
Administration costs |
| (8) | – | – | (8) |
Total operating charge |
| (75) | – | (123) | (198) |
Net finance income | 52 | – | – | 52 | |
Net cost in consolidated expenditure statement |
| (23) | – | (123) | (146) |
2025
| Note | BBC Pension Scheme (Defined benefit scheme) £m | Unfunded Scheme (Defined benefit scheme) £m | Defined contribution scheme £m | All schemes £m | |
|---|---|---|---|---|---|
Current service cost | (74) | – | (110) | (184) | |
Administration costs |
| (9) | – | – | (9) |
Total operating charge |
| (83) | – | (110) | (193) |
Net finance expenditure | (3) | – | – | (3) | |
Net cost in consolidated expenditure statement |
| (86) | – | (110) | (196) |
D6.4 BBC Pension Scheme gains/(losses) in the consolidated statement of comprehensive (expenditure)/income
| IAS 19 valuation | 2026 £m | 2025 £m |
|---|---|---|
Return on plan assets (excluding amounts included within interest) | (259) | (1,389) |
Remeasurement (losses)/gains arising from: |
|
|
- Experience adjustments | (70) | 574 |
- Changes in demographic assumptions | (131) | 13 |
- Changes in financial assumptions | 40 | 1,760 |
Net (loss)/gain recognised in the consolidated statement of comprehensive (expenditure)/income | (420) | 958 |
Remeasurement gains/(losses) arise from actual performance being different from that predicted.
Only defined benefit schemes give rise to gains and losses in the consolidated statement of comprehensive expenditure.
D7 BBC Pension Scheme
The BBC Pension Scheme is closed to new entrants. It provides pensionable salary-related benefits on a defined benefit basis.
The Pension Scheme is administered by a fund that is legally separated from the BBC Group. The Trustees of the pension fund are required by law to act in the interest of the fund and of all relevant stakeholders of the scheme. The Pension Scheme Trustees manage the plan in the short, medium and long term. They make funding decisions based on valuations which take a longer-term view of the assets required to fund the scheme’s liabilities.
D7.1 Funding the BBC Pension Scheme
Accounting valuations of the scheme are performed by PricewaterhouseCoopers LLP, consulting actuaries. Formal actuarial valuations are performed by Willis Towers Watson and are undertaken at least every three years. The most recent triennial actuarial valuation was performed a year early than previously reported, as at 1 April 2024, and showed a funding surplus of £296 million on an actuarial basis. The pension Trustees agreed the next formal valuation will be performed no later than as at 1 April 2026.
The BBC maintained a contribution rate of 18.3% in accordance with the Scheme’s Statement of Contributions dated 13 December 2024 for the period from 1 April 2025 to 30 September 2025. A new Statement of Contributions was agreed between the Trustee and the BBC on 30 September 2025, under which the rate of employer contributions in respect of future service accrual for the period from 1 October 2025 to 31 March 2026 was set at 11.5%. It has also been agreed that the rate of BBC contributions for the period from 1 April 2026 will be 15.9%.
The next actuarial valuation has an effective date of 1 April 2026. If that valuation does not result in a revised schedule of contributions that removes the requirement for the payment, a deficit contribution of £125 million will become payable on 1 July 2027. This arrangement is designed to help protect the Scheme against the risk of reversal of the recent improvement in the funding position (on an actuarial basis) and a contingent liability has been recognised accordingly (see note H4).
| Contribution rates | 2027 % | 2026 % | 2025 % |
|---|---|---|---|
Employer | 15.9 | 18.3/11.5 | 30.0/18.3 |
Employee (Old and New Benefits) | 7.5 | 7.5 | 7.5 |
Employee (Career Average Benefits 2006) | 4.0 | 4.0 | 4.0 |
Employee (Career Average Benefits 2011) | 6.0 | 6.0 | 6.0 |
The member contributions to the scheme are mainly paid via a salary sacrifice arrangement. These have been treated as employer contributions.
On the basis of the pension assumptions above, contributions totalling £65 million are expected to be paid in 2026/27.
Below are the cash flows that have occurred through the BBC Pension Scheme itself. These are recognised in the BBC Pension Scheme’s own financial statements as opposed to the BBC’s.
| 2026 £m | 2025 £m | |
|---|---|---|
Contributions including additional voluntary (employer and employee) | 66 | 118 |
Investment income | 317 | 329 |
Cash inflows | 383 | 447 |
Payments of pensions and transfers out | (637) | (599) |
Expenses | (37) | (27) |
Net cash outflow | (291) | (179) |
As the scheme is closed to new entrants, the level of contribution from employees will decrease (as members retire, there are no new entrants to replace the reduction in employee contributions).
D7.2 Changes in the fair value of plan liabilities
The key items which affect the movement on plan liabilities are the additional year of pension benefits earned, any gains or losses relating to participants leaving the pension scheme, changes in assumptions made and benefits paid out during the year.
| Note | 2026 £m | 2025* £m | |
|---|---|---|---|
Opening present value of plan liabilities |
| 11,684 | 13,890 |
Current service cost |
| 65 | 74 |
Past service cost |
| 2 | – |
Interest on pension plan liabilities |
| 660 | 653 |
Remeasurement losses/(gains): |
|
|
|
- Experience adjustments |
| 70 | (574) |
- Changes in financial assumptions |
| (40) | (1,760) |
- Changes in demographic assumptions |
| 131 | (13) |
Contributions by plan participants |
| 3 | 2 |
Benefits paid |
| (624) | (588) |
Closing present value of plan liabilities | 11,951 | 11,684 |
*Although there has been no change how the BBC recognises pension plan assets/liabilities, the comparatives have been restated to better reflect administration expenses. These had been netted down within plan assets and grossed out of benefits paid within plan liabilities historically.
- Experience adjustments reflect the financial differences that occur between previous actuarial expectations and what actually occurred during the year. These will include impacts from salary changes, changes in the number of scheme members and mortality rates.
- Changes in demographic and financial assumptions change the estimates used to value the future pension asset/liability.
- Demographic assumptions include mortality rates, staff turnover and early retirement.
- Financial assumptions encompass items such as discount rate and future salary levels.
D7.3 Plan liabilities principal actuarial assumptions made
The calculation of the scheme liabilities requires a number of financial and demographic assumptions to be made. The principal assumptions used by the actuaries at the balance sheet date were:
| Principal financial assumptions | 2026 % | 2025 % |
|---|---|---|
Rate of increase in salaries: |
|
|
Old, New and Career Average Benefits (2006)* | 1.0 | 1.0 |
Career Average Benefits (2011)* | 3.0 | 2.9 |
Rate of increase in pension payments: |
|
|
Old Benefits* | 3.6 | 3.4 |
New Benefits* | 3.5 | 3.3 |
Career Average Benefits (2006)* | 2.3 | 2.3 |
Career Average Benefits (2011)* | 3.0 | 2.9 |
Inflation assumption (RPI)^ | 3.6 | 3.4 |
Inflation assumption (CPI)^ | 3.4 | 3.2 |
Discount rate | 6.0 | 5.8 |
* For more information on the different pension arrangements, please refer to the Remuneration Report.
^ RPI and CPI are long-term assumptions.
The discount rate for the IAS 19 Pensions valuation has been derived with reference to market yields at the end of the reporting period on AA-rated sterling-denominated corporate bonds with maturities consistent with the estimated term of the post-employment benefit obligations.
Certain types of bonds are excluded from the calculating model, either because they have unusual features, are relatively small or potential outliers, in order to remove the distortion that might otherwise occur from including unusual, less liquid or potentially misrated bonds. Extrapolation is performed when the profile of the scheme’s expected benefit outflow is longer than the cash flows of the available bonds.
The average life expectancy assumptions for members, after retiring at 60 years of age, are as follows:
| Principal demographic assumptions | 2026 Number of years | 2025 Number of years |
|---|---|---|
Retiring today: |
|
|
Male | 27 | 27 |
Female | 29 | 29 |
Retiring in 20 years: |
|
|
Male | 29 | 28 |
Female | 31 | 30 |
The mortality assumptions have been selected to reflect the characteristics and experience of the membership of the scheme and are based on those in line with the preliminary funding valuation as at 1 April 2024. The standard ‘S4’ series of tables, published by the Continuous Mortality Investigation (CMI), reflect recent research into mortality experience in the UK.
A subset of these tables have been used for males and females, with a multiplier of 101% for male members and dependents and 102% for female members and dependents. For the allowance for future improvements, the CMI 2023 core projection has been adopted with an ‘initial addition’ of 0.5% and a long-term trend of 1.25% for both males and females.
D7.4 Scheme membership analysis and maturity profile
| Principal demographic assumptions | 2026 Number | 2025 Number |
|---|---|---|
Contributors | 5,678 | 5,678 |
Pensioners | 27,867 | 23,453 |
Dependants | 4,483 | 4,414 |
Deferred pensioners | 23,951 | 23,951 |
The maturity of a scheme provides an indication of the cash requirements of the scheme and the likely attitude of the Trustees to risk within their investment policy.
The more mature a scheme, the more likely that the Trustees will favour low-risk investments.
As the scheme is now closed to new entrants, the number of contributors will decrease whilst the number of pensioners increase over time.
The total number of scheme beneficiaries as at 31 March 2026 was 43,485 (2025: 44,097).
Membership numbers in the table above are higher as members can hold more than one record. For example, contributing members who have transferred to the Career Average Benefits 2011 section from another section of the scheme may have a deferred pensioner record for their benefits built up in the Old Benefits, New Benefits or Career Average Benefits 2006 sections and a contributing record for their Career Average Benefits 2011 benefits.
The average duration of the benefit obligation at the end of the reporting period is 12.5 years (2025: 13 years). This number can be subdivided into the duration related to:
- Contributors: 19 years (2025: 19 years)
- Pensioners: 9.5 years (2025: 9 years)
- Deferred pensioners: 17 years (2025: 18 years)
D7.5 Plan liabilities assumption sensitivities
The sensitivities of the schemes’ liabilities to changes in the principal assumptions are set out below:
| 2026 | Assumption used | Movement | Impact on scheme liabilities % | (Increase)/decrease on scheme liabilities £m |
|---|---|---|---|---|
Discount rate | 6.0% | decrease 0.1% | 1.2% | (141) |
| 6.0% | increase 0.1% | 1.2% | 138 |
Retail price inflation rate | 3.6% | decrease 0.1% | 1.1% | 128 |
| 3.6% | increase 0.1% | 1.1% | (129) |
Mortality rate | See Note D7.3 | decrease 1 year | 3.9% | 464 |
| See Note D7.3 | increase 1 year | 3.8% | (453) |
| 2025 | Assumption used | Movement | Impact on scheme liabilities % | (Increase)/decrease on scheme liabilities £m |
|---|---|---|---|---|
Discount rate | 5.8% | decrease 0.1% | 1.2% | (138) |
| 5.8% | increase 0.1% | 1.2% | 136 |
Retail price inflation rate | 3.4% | decrease 0.1% | 1.2% | 136 |
| 3.4% | increase 0.1% | 1.0% | (117) |
Mortality rate | See Note D7.3 | decrease 1 year | 3.8% | 446 |
| See Note D7.3 | increase 1 year | 4.0% | (463) |
The discount rate for the IAS 19 Pensions valuation has been derived with reference to market yields at the end of the reporting period on AA-rated sterling-denominated corporate bonds with maturities consistent with the estimated term of the post-employment benefit obligations.
Certain types of bonds are excluded from the calculating model, either because they have unusual features, are relatively small or potential outliers, in order to remove the distortion that might otherwise occur from including unusual, less liquid or potentially misrated bonds. Extrapolation is performed when the profile of the scheme’s expected benefit outflow is longer than the cash flows of the available bonds.
The sensitivity analysis presented may not be representative of the actual change in the defined benefit obligation due to the likelihood of some linkage between assumptions.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
D7.6 Changes in the fair value of plan assets
The key items which affect the movement on plan assets are the additional year of contributions made, changes in the value of the pension plan assets (including the investment return) and benefits paid during the year.
The employee contributions to the scheme by members are mainly paid through a salary sacrifice arrangement. These have been treated as employer contributions.
| Note | 2026 £m | 2025* £m | |
|---|---|---|---|
Opening fair value of plan assets |
| 12,558 | 13,776 |
Interest income on assets |
| 712 | 650 |
Remeasurements on plan assets |
| (259) | (1,389) |
Contributions by employer |
| 63 | 116 |
Contributions by plan participants |
| 3 | 2 |
Administration expenses |
| (8) | (9) |
Benefits paid |
| (624) | (588) |
Closing fair value of plan assets | 12,445 | 12,558 |
*Although there has been no change how the BBC recognises pension plan assets/liabilities, the comparatives have been restated to better reflect administration expenses. These had been netted down within plan assets and grossed out of benefits paid within plan liabilities historically.
Remeasurements on plan assets represent the amount by which the assets held by the scheme (such as equities, bonds and property) have performed better or worse than the prior year value.
D7.7 Plan assets
The allocation of assets by the pension fund Trustees is governed by the need to manage risk against the desire for high returns and liquidity needs.
| Type of asset | 2026 £m | 2026 % | 2025 £m | 2025 % |
|---|---|---|---|---|
Held at quoted market prices: |
|
|
|
|
Equities | 414 | 3 | 394 | 3 |
Pooled vehicles | 70 | 1 | 70 | 1 |
Repurchase agreements | (2,552) | (21) | (2,192) | (17) |
Fixed interest bonds | 4,071 | 33 | 3,630 | 29 |
Index-linked bonds | 4,693 | 38 | 4,311 | 33 |
Derivatives | (205) | (2) | (24) | – |
Other assets: |
|
|
|
|
Property |
|
|
|
|
- UK | 989 | 8 | 977 | 8 |
- Pooled investment vehicles | 366 | 3 | 389 | 3 |
Alternatives* | 4,495 | 36 | 4,940 | 39 |
Cash and other current assets | 104 | 1 | 63 | 1 |
Total assets | 12,445 | 100 | 12,558 | 100 |
Actual return on pension plan assets** | 454 |
| (739) |
|
* Alternatives are investments in asset classes other than the traditional quoted equities, bonds, property and cash. They include investments in private equity, private credit, hedge funds, infrastructure and renewable energy investments. They are generally illiquid investments as some may require sufficient time to find buyers willing to pay full market value. They are useful for managing risk as they enhance portfolio diversification and potentially reduce risk as their cash flows can be well suited to meeting the scheme’s liabilities.
** This constitutes realised losses from the receipt of investment income (e.g. dividends and rent), transactions where assets are sold and unrealised fair value changes.
A long-term plan of achieving full funding, based on the actuarial valuation, on a discount rate equal to the yield on liability matching gilts plus 0.5% per annum has been agreed. The scheme’s strategic asset allocation is based on the scheme’s funding ratio, with the intention of not taking more risk than necessary to return to full funding over the horizon of the plan. Indirect currency risk exposure exists through pooled investment vehicles held in foreign currencies, valued at £2,890 million (2025: £3,129 million).
