Royal Mail’s collective defined contribution (CDC) scheme delivered a pension increase of 6.4 per cent in its first year of operation, according to its actuarial valuation.

The 31 March 2025 valuation referred to the income for life (CMP) section of the Royal Mail Collective Pension Plan, which has more than 100,000 members.

It was carried out to determine the adjustment needed to apply to members’ income for life on 31 March 2026.

The total increase for the year of 6.4 per cent was 2.6 percentage points above the CPI inflation rate.

This would result in someone with an example pension pot of £1,000 seeing this increase to £1,060.40, although this could rise or fall in future years.

Royal Mail launched the UK’s first CDC scheme, the Royal Mail Collective Pension Plan, in October 2024, with its authorisation being described as a milestone moment for the pensions industry.

Its first valuation showed the CMP section’s available assets were £205.6m on 31 March 2025, with financial assumptions on future asset returns for return-seeking assets and low-risk assets being CPI + 5.4 per cent a year and CPI + 2.3 per cent a year respectively.

Commenting on the valuation, LCP partner, Helen Draper, said: “For the scheme’s members and their representative union, this is a great result and shows members have really benefitted from the innovative new scheme design and strong investment returns delivered during the year.”

LCP partner, Steven Taylor, added: “Other large organisations have been closely monitoring Royal Mail’s early years’ experience with CDC.

“We expect these results will now encourage others to progress their CDC plans over the upcoming period.”

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