The UK pensions accounting landscape in 2025 is defined by a dramatic improvement in the financial health of Defined Benefit (DB) schemes and significant regulatory and demographic developments. This creates a pivotal moment for trustees and sponsors, offering new strategic opportunities alongside evolving accounting and disclosure requirements.

New Mortality Model: CMI 2024

The latest mortality projections model, CMI 2024, was released in June 2025. It represents the most significant update in eight years and reverses the recent trend of declining life expectancy projections.

• Key Change and Impact: For the first time, the model explicitly incorporates the COVID-19 pandemic as a “mortality spike” that gradually declines. Moving from the CMI 2023 model to the core CMI 2024 model is expected to increase the liabilities of a typical pension scheme by approximately 0.75% to 1.0%, with a larger impact at older ages.
• Varying Trends: Mortality improvements are not uniform. While mortality rates for older, pensioner-age individuals have fallen sharply, younger working-age adults continue to experience higher mortality rates than pre-pandemic levels.
• Action for Trustees & Sponsors: Companies must decide whether to adopt the model’s core parameters or use alternatives, guided by actuarial advice. Auditors will require evidence to support this choice, and it is crucial to tailor these assumptions to the scheme’s specific membership profile.