Mineworkers' Pension Scheme surplus sharing split surpluses 50/50 with the government from 1994; the 28 October 2026 Budget said future ones go to members.
What is Mineworkers' Pension Scheme surplus sharing?
When British Coal was privatised in 1994, "the government agreed to take half of any surplus generated by the pension scheme, in return for a guarantee that pensions would increase in line with inflation", according to the Department for Energy Security and Net Zero's press release of 29 November 2024. The scheme's trustees describe the same split: any surplus is shared 50/50 between the government and members, and members' half is used to pay bonus pensions.
The government also stands behind the scheme. In the trustees' 2024 newsletter, they say "there will always be enough money to pay your pension, thanks to the Government Guarantee."
Has a bonus changed your weekly budget? Bring how your Mineworkers' pension now sits with tax, benefits and savings to an FCA-authorised adviser by phone, without charge, by filling the form on this page.
This page covers the arrangement and how it has changed. For each year's rise in your guaranteed pension, see Mineworkers Pension Scheme increases, and for pay days, payment dates. Surpluses in other final salary schemes are in what happens when a defined benefit scheme has a surplus.
How a valuation divided the surplus in 2023
The Government Actuary values the scheme at least every three years, and the scheme is split into four notional sub-funds: the Guaranteed Fund, the Bonus Augmentation Fund, the Guarantor's Fund and the Investment Reserve. The valuation at 30 September 2023 is the clearest worked example of the 50/50 rule, using the scheme's own 2024 Report and Accounts.
| Part of the 2023 valuation | Figure |
|---|---|
| Surplus in the Guaranteed Fund, divided equally | £1,089 million |
| Moved to the Bonus Augmentation Fund (members' half) | £545 million |
| Moved to the Guarantor's Fund (the government's half) | £545 million |
| Allocated to the 2024 bonus pension | £834.4 million |
| Investment Reserve, market value at 30 September 2023 | £1,438 million |
The members' half paid for a bonus pension "equal to 19% of the Guaranteed Fund pension", effective from 23 September 2024. The trustees' newsletter explains that bonus pensions awarded before 2024 are protected and cannot be reduced. The 19% bonus was not protected when awarded: the newsletter warned that a deficit at the 2026 valuation or a later one could reduce it.
The Guarantor's Fund surplus of £613 million, by contrast, "is available to increase future payments to the Guarantor". A payment of £142.4 million had been made from it to the government on 2 October 2023.
The Investment Reserve and the 2024 transfer
The Investment Reserve "originally represented the Guarantor's share of surpluses present in the Scheme at the time of restructuring in 1994 and was due to be paid to the Guarantor by 2029." Returning it was a Labour manifesto promise: "We will review the unfair surplus arrangements and transfer the Investment Reserve Fund back to members".
On 22 October 2024 the government agreed with the scheme's Committee that, from 30 June 2024, the full value of the Investment Reserve should be transferred to members. The balance went into the Bonus Augmentation Fund, and a further bonus pension "equal to 32% of the Guaranteed Fund pension" was awarded in November 2024. Like the 19% bonus, it was not protected when awarded, so a deficit at a future valuation could have reduced it.
On 29 November 2024, the day the first of these payments reached members, the energy department (DESNZ) valued the transfer at £1.5 billion. It said the uplift averaged 32 per cent across nearly 112,000 former mineworkers and dependants, or £29 a week each on average.
From the trustees' proposals to the Budget of 28 October 2026
The reserve transfer left the 50/50 rule itself under review. In February 2025 the trustees said they had recommended that 100% of future surpluses go to members as bonus pensions, provided the scheme is not in deficit. They also asked to keep around £1 billion, previously earmarked for return to the government, in the scheme for extra bonuses, and asked for the 2024 bonus pensions to be protected. They added that the earliest any new arrangement could start was after the September 2026 valuation.
In his Budget speech on 28 October 2026 the Chancellor said: "For ex-mineworkers, I’m guaranteeing that every penny of the pension fund surplus now goes to miners." In the trustees' account of the announcement, all of any surplus a future valuation finds can now be used to raise members' pensions, ending the 50/50 arrangement in place since 1994. The £2.3 billion transferred at the 2025 Budget went to a different scheme, the British Coal Staff Superannuation Scheme.
What is still undecided for members
According to the trustees, the government told them the day before the Budget that the roughly £1 billion of undistributed surplus could not be used to pay a new bonus pension this year, so it stays in the scheme for now. In the speech the Chancellor added: "I know the job’s not done and I will go on to ensure the full transfer of the Guarantors Fund." The trustees are cautious that this is neither a guarantee nor a commitment to a timescale. They also report that Blair McDougall MP, the minister responsible for the scheme, confirmed on Budget morning that bonuses paid from 2024 onwards, and any awarded later, will be protected and cannot be taken away.
The trustees say they will give members more detail at meetings over the coming weeks, so the scheme's own updates are the place to check what the protection covers and when any more money might reach members. If the news leaves you wondering about your own coalfield pension, an FCA-authorised adviser will discuss it; ask for that free callback in the form on this page.
Surplus and bonus pension questions
Can I work out my own share of the surplus?
Not as a slice of the fund. Members' half has been paid out as bonus pensions, each a percentage of the member's guaranteed pension: 19% from September 2024 and a further 32% from November 2024. The trustees' 2024 newsletter worked the 19% through for a guaranteed pension of £88.00 a week, and the scheme's letter shows each member's own amounts.
Is the surplus the same thing as the Investment Reserve?
No. A surplus is what a valuation finds once the actuary has compared the money in the scheme with what is needed to pay members, and it was split 50/50. The Investment Reserve was a separate pot holding the government's share of surpluses at the 1994 restructuring; it was due to the government by 2029 but went to members from 30 June 2024.
Will a surplus bonus be paid in 2026?
No new bonus pension will be paid this year, the trustees said on 28 October 2026. The undistributed surplus stays in the scheme until the government agrees to move it to members, and the trustees want that done now.
When is the scheme next valued?
The scheme rules require a valuation at least every three years; the latest in the 2024 accounts was at 30 September 2023. In February 2025 the trustees said any new sharing arrangement could start no earlier than after the September 2026 valuation, so watch the scheme's news page for its result.
For the basics, see how final salary pensions work. Pensions that rise with inflation are covered in whether final salary pensions increase, and how final salary pensions are protected explains the wider safety net. Mineworkers' pensions, bonuses and any effect on benefits can be explained by an FCA-authorised adviser. Add your contact number to this page's form and a free ring follows.