The BT Pension Scheme has a funding deficit, £3.2bn at 30 June 2025 on its latest interim figure, and a dated plan from BT to close it by 2030.
Is the BT Pension Scheme in trouble? A deficit is not the same as a scheme that cannot pay: pensions are still being paid, and a payment plan is in place. The deficit figures mean different things for different BT pensioners and deferred members. Prefer to hear it from an FCA-authorised adviser who will phone you, with nothing to pay? Use the form on this page.
What is the BT Pension Scheme deficit?
The deficit, which the scheme calls its funding shortfall, is the gap between the assets the scheme holds and the amount its actuary estimates it needs to pay every promised pension. A full valuation is carried out at least every three years, with interim updates in between. The scheme's own summary funding statement sets out the latest figures:
| As at | Type | Assets | Liabilities | Shortfall | Funding level |
|---|---|---|---|---|---|
| 30 June 2023 | Full valuation | £37.33 billion | £41.03 billion | £3.70 billion | 91% |
| 30 June 2024 | Interim | £35.69 billion | £39.54 billion | £3.85 billion | 90% |
| 30 June 2025 | Interim | £33.24 billion | £36.44 billion | £3.20 billion | 91% |
The most recent full valuation is the 30 June 2023 one. Before it, the 2020 valuation had shown a deficit of £7.98bn, and BT paid £4.36bn of deficit contributions in between, according to the scheme's announcement of the 2023 agreement. The 2025 figure is an interim assessment, not a new formal valuation.
The fall from £3.85bn to £3.20bn in the year to June 2025 largely reflects a £600 million payment from BT Group in April 2025.
How and when will BT pay off the pension deficit?
BT Group and the scheme's trustee agreed a recovery plan alongside the 2023 valuation. Its main payments are £600m in each financial year until 31 March 2030, then a final £490m before 30 April 2030. BT also agreed in 2023 to keep paying £180m a year under the asset-backed funding arrangement agreed at the 2020 valuation.
On those payments the scheme is expected to be fully funded by 30 June 2030. The formal recovery plan runs longer, to 31 December 2035. A further safeguard was agreed in 2023: BT would pay up to £300 million a year more if a new shortfall opened up beyond £1 billion up to 2026, or beyond £500m between 2026 and 2033. The summary statement reports that none of these extra payments has been needed, and that every payment due from BT in 2024 and 2025 was paid as expected.
At the 2023 valuation, the scheme also said it would keep reducing the risk in its investments through to 2034, and BT agreed to keep giving the scheme legal protections to 2035.
What happens to BT pensions if BT cannot pay?
The scheme itself asks this question in its funding statement. Its answer covers the Crown Guarantee and how much the assets alone could cover; the Pension Protection Fund is the general safety net for defined benefit schemes, with its own eligibility rules.
Start with the Crown Guarantee. When BT was privatised in 1984, the Government gave the scheme an undertaking: in the unlikely event of BT plc being wound up, the liabilities of BT plc to the scheme that the undertaking covers would be met by the Government. That wording is about BT's liabilities to the scheme, and only those the undertaking covers.
Then the Pension Protection Fund (PPF). GOV.UK says defined benefit members are usually protected by it if the employer goes bust, and that it usually pays members at or past the scheme's pension age 100% compensation, and younger members 90%. Eligibility matters: the PPF lists schemes with a Crown guarantee among those it does not protect, while schemes with only a partial Crown guarantee are eligible and pay levies on the part without one. How the guarantee and these PPF rules bear on one BT member's pension is a fair question to put, free, to an FCA-authorised adviser when they phone. How the PPF works and how final salary pensions are protected cover the detail.
The scheme also gives an estimate for a worst case. If BT Group stopped trading and paid nothing more, it estimates its assets would have covered around 81% of liabilities at 30 June 2025, on a low-risk investment basis with extra margins for risk. That is the scheme's estimate at a past date, not a forecast.
What is next for the BT Pension Scheme valuation?
The next full valuation is as at 30 June 2026. On 16 October 2026 the scheme published its annual report for the year to that date, with net assets of £32.2 billion, and said the trustee board "is progressing the 2026 triennial valuation with BT Group". It added that an update on funding will follow once the valuation is agreed. Until then, the 2023 valuation and 2025 interim figures above are the latest the scheme has published.
Whatever the new valuation shows, pensions keep being paid meanwhile: the scheme paid £2.8 billion in benefits in the year to June 2026.
Should BT pension members be worried?
That depends on your own position, and the figures above do not decide it. A few points to weigh. BT and the trustee have a dated plan to close the deficit, BT made every payment due in 2024 and 2025, and the Crown Guarantee sits behind the liabilities its undertaking covers. Transferring out is a separate decision. The Financial Conduct Authority says "The FCA and The Pensions Regulator (TPR) believe it’s in most people’s best interests to keep their DB pension." Where the transfer value of safeguarded benefits tops £30,000, advice must be taken first; transferring out of a final salary pension has the detail. Setting a BT pension beside the State Pension and other savings is easier with someone qualified. Through the form on this page, have your BT pension weighed up, on a no-charge phone call, by an FCA-authorised adviser.
For how the scheme's pensions work, see the BT final salary pension, the BT Pension Scheme retirement age and BT Pension Scheme death benefits. For deficits in general, can final salary pensions go down and what a scheme surplus means are next, and what a final salary pension is is the starting point.
The BT pension deficit and its backstops: more questions
Is the BT pension any good?
It is a defined benefit scheme, paying £2.8 billion in benefits in the year to 30 June 2026. Whether it is good for you depends on your own entitlement and plans; how its pensions work is on the BT final salary pension page.
How big is the BT pension deficit?
The last full valuation, at 30 June 2023, showed £3.70bn. The latest interim figure is £3.20bn at 30 June 2025. A new full valuation as at 30 June 2026 is under way.
Has BT got to pay the BT pension deficit off?
BT Group agreed a recovery plan with the trustee, with £600m a year until 31 March 2030 and a final £490m before 30 April 2030, plus £180m a year under the asset-backed arrangement.
Does the Government guarantee the BT pension?
The scheme describes a Crown Guarantee from BT's 1984 privatisation, covering the liabilities of BT plc to the scheme that the undertaking covers if BT plc were wound up. Its wording is about BT plc's liabilities to the scheme rather than each member's own pension. To hear how this would touch your own BT pension, send your details through our enquiry form for an explanation from an FCA-authorised adviser on a call.
Does PPF compensation match the pension a scheme promised?
Not always. Below the scheme's pension age GOV.UK gives the usual level as 90%, against 100% at or above it, and the PPF itself calls what it pays compensation in place of your pension.