BT Group Agrees 2026 Pension Valuation, Trimming Deficit to £2.7 Billion

BT Group and the BT Pension Scheme agreed a triennial funding valuation as of 30 June 2026 showing a deficit of £2.7 billion, the company said in a statement published on November 5, 2026. BT Group is the UK's largest telecommunications operator, providing fixed-line, mobile, broadband, cloud and AI services through the BT, EE, Plusnet and Openreach brands.

How the 2026 Valuation Compares With 2023

The scheme's assets stood at £32.1 billion against liabilities of £34.8 billion at 30 June 2026, a funding level of 92.3%. At the June 2023 valuation, assets were £37.2 billion against liabilities of £40.9 billion, a deficit of £3.7 billion and a funding level of 91.0%. The average discount rate rose to 6.1% from 5.3%, while average CPI inflation fell to 2.8% from 3.2%.

BT said the deficit was behind plan primarily because of longevity and other demographic headwinds over the previous three years, partly offset by the scheme's longevity hedges. The scheme held 74% of its assets in bond-like assets and 26% in growth assets at 30 June 2026.

Patricia Cobian, BT Group Chief Financial Officer, said: "This agreement supports our capacity to continue to invest in next-generation networks and transform BT." Jill Mackenzie, Trustee Chair of the BTPS, said: "The deficit has reduced, security strengthened and we remain on track to achieve full funding by 2030."

Zero-Coupon Bonds and Extra Funding

Payments under the 2023 plan will be reshaped. Payments totalling £30 million will be brought forward and paid in FY27, and remaining FY28-FY31 scheduled contributions will be replaced with four zero-coupon bonds with the same payment profile, issued by BT Finance plc under its Euro Medium-Term Note Programme. BT will continue annual payments of £180 million under the asset-backed funding arrangement established in 2021.

BT will provide £282 million of additional funding through an extra zero-coupon bond maturing in 2033 with a par value of £420 million. The five zero-coupon bonds will be issued shortly after the agreement and before the end of the financial year, reducing the deficit to around £0.3 billion. BT also agreed to provide the BTPS with an extra £4 billion of security over EE Limited's shares until 2040.

BT's Recent Moves

According to akta.pro company records, BT reported FY26 adjusted revenue of £19.7 billion, down 4% year-on-year, and adjusted EBITDA of £8.23 billion, flat year-on-year. Pre-tax profit climbed 8% to £1.4 billion, helped by £580 million of gross annualised cost savings.

Earlier Steps in BT's Turnaround

In October 2026, BT International expanded its Global Fabric network-as-a-service platform with integrated security service edge options from Cisco, Fortinet, Netskope and Zscaler, SecurityBrief Australia reported. That month, Virgin Media O2 CEO Lutz Schueler called for a full investigation into BT's acquisition of TalkTalk, according to Telecompaper. On November 5, 2026, CityAM reported that BT cut its workforce by 11% to 90,000, including contractors, and expects the TalkTalk takeover to cost around £400 million this financial year.

What Comes Next for the Scheme

BT said the five zero-coupon bonds will be issued before the end of the financial year. The company also said its International unit will be contributed into a new joint venture expected to complete in the second half of 2027.