Many charity pension schemes are now either in surplus or approaching full funding, with Hyman Robertson calling on trustees to focus less on deficit recovery and more on long-term strategic decisions, including endgame.
According to its annual 2026 Outlook for Charity DB Pension Funding report, the largest 40 charities in England & Wales that sponsor DB pension schemes now have combined DB pension scheme reserves worth £47bn. The average funding level of these schemes has risen by 5 per cent since 2025 and by 25 per cent since 2019.
The report assesses the charities’ DB pension exposures by looking at reserve levels, income, DB funding levels and pension contributions over the past eight years. It found that schemes are entering a period of significant change, with all schemes needing to actively consider their endgame options.
Hyman Robertson said the changes facing charity DB schemes are being driven by improved funding levels, evolving regulation and increasing innovation in endgame options.
It identified three broad endgame routes available to charity DB schemes: traditional insurance solutions, run-on strategies and alternative endgame solutions.
Trustees need to decide which approach is best for their scheme and will deliver the best outcomes for members, according to Hyman Robertson. The increase in funding levels has been driven by a combination of falling liabilities and relatively resilient asset values.
Total charity income from fundraising and charitable activities now stands at £15bn, with restricted income falling to £4bn while unrestricted income remained at £11bn.
Hymans Robertson partner and head of DB pensions consulting for charities Heather Allingham 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.”
