The report: 2026 Outlook for charity DB pension funding, shows that the largest 40 charities in England & Wales that sponsor DB pensions schemes now have combined DB pensions schemes reserves worth £47bn. The analysis also shows there’s been a 5% rise in average funding level of these charity DB schemes since 2025 and a rise of 25% since 2019.
The 2026 report from the leading pensions and financial services consultancy assesses the charities’ DB pension’s exposures by looking at reserve levels, income, DB funding levels and DB pension contributions over the last 8 years. It reveals that pension schemes are entering a period of significant change, and that all schemes should be actively considering endgame options.
The report reveals that the changes charity DB schemes will be facing are driven by improved funding levels, as well as evolving regulation and increasing innovation in endgame options. There are now three broad endgame routes now available to charity DB schemes: traditional insurance solutions, run-on strategies and alternative endgame solutions. Trustees need to decide what is best for their scheme and will provide the best outcomes for members. The increase in funding levels has come from a combination of falling liabilities and relatively resilient asset values. Total charity income from fundraising and charitable activities now sits at £15bn; restricted income fell to £4bn and unrestricted remained at £11bn.
Commenting on why all charity DB schemes should be considering their endgame options, Heather Allingham, Partner and Head of DB Pensions Consulting for Charities, says: “All charity DB schemes, regardless of their funding position,, should be actively considering their endgame options. Improved funding levels mean many schemes now have more choice - buy-out is no longer the only path to achieving long-term security. Charities should focus on articulating their objectives for their schemes and their members and exploring the full range of solutions available, from traditional insurance through to run-on strategies, superfunds and other innovative models.
“Different endgame options deliver different outcomes for members and sponsors, so the key is understanding which approach best aligns with a charity’s objectives. All these options should be considered through a fresh lens and understanding how you could implement them for your scheme.
“Now is the time, when charities need to connect funding, investment, legal risk and covenant in one joined-up plan. Better funding is welcome, but it does not remove the need for careful governance. Trustees and sponsors should test whether their investment strategy still fits their long-term objective and make sure their data and benefit records are ready or a plan is in place to address them. Schemes that act early will have more flexibility, more negotiating power and a better chance of securing the best outcome for members and the charity.”
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