Geopolitical and policy uncertainty cited in record profit warnings from UK-listed companies with DB sponsors

• More than two in five (42%) of the 63 profit warnings issued by UK-listed businesses with a Defined Benefit (DB) pension scheme in 2025 cited the impact of policy change and geopolitical uncertainty
• Last year saw the lowest annual total of profit warnings from UK-listed firms with a DB sponsor since 2021 (55 warnings)
• The other main driver of warnings in 2025 was contract and order cancellations or delays, referenced in nearly a third (31%)

More than two in five (42%) of the 63 profit warnings issued by UK-listed companies with a Defined Benefit (DB) pension scheme during 2025 cited the impact of policy change and geopolitical uncertainty, according to EY-Parthenon’s latest Profit Warnings report.

This marked the highest proportion of warnings recorded for this cause in more than 25 years of EY’s analysis, and a significant year-on-year increase from 7% in 2024.

The other main driver of profit warnings last year was contract and order cancellations or delays, which was referenced in almost a third (31%) of warnings in 2025.

The 63 profit warnings from UK-listed firms with DB sponsors in 2025 – including 15 in Q4 – represented a 21% fall from the 80 recorded throughout 2024, and the lowest annual total since 2021, when 55 warnings were issued.

Across all UK-listed companies, 240 profit warnings were issued during 2025, with more than a quarter (26%) coming from firms with DB pension schemes. A similar proportion (27%) of all UK-listed companies with a DB pension scheme have now issued at least one profit warning within the last 12 months.

Karina Brookes, UK Pensions Covenant Advisory Leader and EY-Parthenon Partner, said: “The volume of profit warnings may have eased, especially in the second half of 2025, but this feels more like an uneasy pause than a turning point, given the latest data continues to highlight the challenges and unprecedented impact that policy and geopolitical uncertainty are creating for sponsors and schemes. The debate around use of surplus in pension schemes is ongoing, even ahead of the new legislation easing restrictions on surpluses coming into effect, which may help to alleviate other cash flow pressures. In this environment, open and transparent communication between sponsors and trustees should help trustees to find the right balance between protecting members and supporting sponsor objectives.”

Paul Kitson, UK Pensions Consulting Leader at EY, added: “The reduced volume of total warnings in 2025 from companies with DB sponsors – the lowest level in four years – alongside generally strong funding levels across many schemes, will provide some reassurance to both trustees and sponsors. However, the growing impact of geopolitical turbulence means they must remain vigilant. Sponsor covenant continues to be a key focus. Trustees and companies will need to be adaptable – supporting funding discussions for schemes in deficit, while carefully assessing options for surplus release where schemes are well-funded. For many organisations, the challenge now is forging resilient, long-term pension strategies that reflect business and member needs in the current operating environment.”