Committee publication · Estimate memoranda · 29 April 2026
Main Estimates Memoranda 2026-27 - Civil Superannuation
From: Public Administration and Constitutional Affairs Committee
Summary
The Cabinet Office's Civil Superannuation estimate seeks £9,926 million in resource funding and £1,448.4 million in net cash for 2026-27 to cover civil service pension schemes including the Principal Civil Service Pension Scheme and Alpha. Resource funding covers the shortfall between employer/employee contributions and pension liabilities. Net cash requirement increased 13.2% due to higher benefits payable, while resource AME rose 1.8% following higher interest costs on scheme liabilities.
Key findings
- Resource AME sought of £9,926.0m, an increase of £176.0m (1.8%) compared to 2025-26; net cash requirement £1,448.4m, up £169.2m (13.2%)
- Current service cost decreased £401.5m (6.2%) due to increase in real discount rate from 2.40% to 2.95% and decrease in earnings growth assumption
- Interest cost on scheme liability increased £600m (5.5%) due to nominal discount rate rising from 5.15% to 5.60%, offset partly by expected increase in contribution income
- Net cash requirement increase driven by higher pension benefits payable from the scheme; scheme liabilities valued at £197.0 billion at 31 March 2025 with 1.7 million members
- Administration costs for 2025-26 approximately £59.5 million; expenditure classified as Annually Managed Expenditure (AME) rather than fixed spending limit due to factors outside scheme administrators' control
Tone
FactualTopics
Key actors
Cabinet Office, Civil Service Pension Schemes (CSPS), Principal Civil Service Pension Scheme, Civil Servants and Others Pension Schemes (Alpha), Catherine Little (Accounting Officer)
Notable line
“There is a net cash requirement because the cash contributions receivable from employers and employees in the year will not fully cover the actual payment of pension bene fi ts.”
Key Quotes
“Expenditure covered by this vote is not subject to pre-set Departmental Expenditure Limit control totals but is classi fi ed as resource Annually Managed Expenditure (AME) so that it can be revised to re fl ect changes in circumstance.”
“The current service cost has decreased following a increase in the discount rate net of CPI in fl ation from 2.40% p.a. as at 31 March 2025 to 2.95% p.a. as at 31 March”
“The latest accounting valuation of all scheme liabilities was £197.0 billion at 31 March 2025 (31 March 2024: £189.0 billion). At that time there were 1.7 million CSPS members.”
Source · parliament.uk record ↗