UK charities sponsoring defined benefit (DB) pension schemes should shift their focus from deficit recovery to long-term endgame planning, as improving funding levels expand the range of options available, Hymans Robertson has said.

The consultancy’s 2026 Outlook for charity DB pension funding, which analysed the 40 largest charities in England and Wales by income that sponsor a DB scheme, found their aggregate funding level had risen to 109 per cent in 2026, up from 104 per cent in 2025 and 81 per cent in 2019.

Hymans Robertson said the improvement, alongside regulatory developments and increasing innovation in the DB endgame market, meant schemes should actively reassess their long-term objectives rather than focus primarily on repairing deficits.

Indeed, aggregate DB liabilities among the charities analysed fell from £6.4bn last year to £5.8bn, and while both scheme assets and liabilities have declined in recent years, liabilities have fallen more sharply.

Meanwhile, the charities themselves held combined reserves of around £47bn, down by £1bn year-on-year but £8bn higher than in 2019.

Total charity income stood at £15bn, comprising £11bn of unrestricted income and £4bn of restricted income.

Hymans Robertson said schemes now had three broad endgame routes to consider: traditional insurance solutions, run-on strategies, and alternative arrangements, including superfunds and capital-backed structures.

It argued that improved funding meant buyout was no longer the only route to long-term security, with different approaches offering varying trade-offs between security, cost, flexibility and the potential for surplus sharing or member benefit improvements.

The report also highlighted improved access to the insurance market for smaller schemes.

Nearly half of the charities analysed had DB liabilities of less than £100m, while almost 70 per cent of those schemes were more than 100 per cent funded.

Hymans Robertson noted that increased insurer capacity, new entrants and streamlined transaction processes meant smaller schemes were increasingly able to secure competitive buy-in and buyout pricing.

Charity schemes have also retained more growth assets than the average UK DB scheme, although the proportion held in growth assets has fallen from 50 per cent in 2019 to 32 per cent in 2026.

Hymans Robertson partner and head of DB pensions consulting for charities, Heather Allingham, said: “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 - buyout is no longer the only path to achieving long-term security. Charities should focus on articulating their objectives for their schemes and exploring the full range of solutions available, from traditional insurance through to run-on strategies, superfunds and other innovative models.”

Allingham added that charities should bring funding, investment, legal risk and covenant considerations together in a single plan, warning that stronger funding did not remove the need for careful governance.

“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,” she stressed.

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