Policy change and geopolitical uncertainty were cited in nearly two thirds (63 per cent) of profit warnings by UK-listed firms with defined benefit (DB) pension schemes in the first half of 2026, according to EY-Parthenon’s latest Profit Warnings report.

This was the highest proportion ever recorded for this cause in EY’s 25 years of analysis.

The report also found that rising costs accounted over a third (34 per cent) of profit warnings.

In total,114 profit warnings were issued in H1 across all UK-listed companies, with 27 from firms with a DB sponsor, down 21 per cent from the same period a year earlier.

Consumer-facing businesses accounted for around half of all profit warnings from firms with DB pension schemes, with companies in the household goods and construction category among the hardest-hit sectors.

Commenting on the findings, EY-Parthenon UK pensions covenant advisory leader and partner, Karina Brookes, said ongoing global instability was continuing to weigh on employers, with the conflict in the Middle East driving up energy and other input costs while also dampening consumer confidence.

She continued: “In these times of continued turbulence, it is crucial for trustees to remain closely engaged with the sponsor to understand the range of scenarios that might have a meaningful impact on sponsor support.

“Monitoring triggers and levers to protect schemes against the impact of these prolonged macroeconomic challenges facing UK corporates can be an appropriate and proportionate mechanism.”

Meanwhile, EY UK pensions consulting leader, Paul Kitson, said that while geopolitical uncertainties and rising costs remained a concern, “the strong funding levels across many schemes will likely bring some reassurance”.

He added: “For many trustees and sponsors, this creates greater flexibility to align on long-term objectives and proactively assess how schemes can deliver value.

“As the market evolves, now is a good time to explore the full range of new opportunities available to well-funded schemes.”

---