Geopolitical disruption and rising costs drive H1 profit warnings from listed companies with a DB sponsor

• Nearly two-thirds (63%) of the 27 profit warnings issued by UK-listed businesses with a Defined Benefit (DB) pension scheme in the first half of 2026 cited the impact of policy change and geopolitical uncertainty – the highest proportion ever recorded for this cause
• EY-Parthenon’s latest Profit Warnings report reveals the other main driver of H1 warnings was rising costs, referenced in 34% – the highest half-year proportion since H2 2022 (63%)
• The FTSE Household Goods and Home Construction sector accounted for a quarter of H1 warnings from listed firms with a DB pension scheme (seven), with around half (14) coming from the Consumer Discretionary category
• Profit warnings from UK-listed companies with a DB sponsor accounted for almost a quarter (24%) of the 114 warnings issued by all UK-listed firms in H1

Almost two-thirds (63%) of the 27 profit warnings issued by UK-listed companies with a Defined Benefit (DB) pension scheme in the first half of 2026 cited the impact of policy change and geopolitical uncertainty, according to EY-Parthenon’s latest Profit Warnings report.

This marked the highest half-year proportion of warnings recorded for this cause in more than 25 years of EY’s analysis.

The other main driver of H1 profit warnings was rising costs, which was referenced in 34% – the highest half-year proportion since the second half of 2022 (63%).

The 27 warnings from UK-listed firms with a DB sponsor during H1 marked a 21% decrease compared to the same period of 2025, when 34 were recorded.

FTSE Household Goods and Home Construction sector companies, which include housebuilders, accounted for a quarter of warnings from listed firms with a DB pension scheme in the first half of the year, with seven, while around half (14) came from the Consumer Discretionary category.

Across all UK-listed companies, 114 profit warnings were issued in H1, with nearly a quarter (24%) coming from firms with a DB sponsor.

Karina Brookes, UK Pensions Covenant Advisory Leader and EY-Parthenon Partner, said: “The impact of the current geopolitical uncertainty is continuing to cause challenges for sponsors, with the conflict in the Middle East fuelling higher energy and input costs and weaker consumer confidence. In these times of continued turbulence, it is crucial for trustees to remain closely engaged with the sponsor to understand the range of scenarios that might have a meaningful impact on sponsor support. Monitoring triggers and levers to protect schemes against the impact of these prolonged macroeconomic challenges facing UK corporates can be an appropriate and proportionate mechanism.”

Paul Kitson, UK Pensions Consulting Leader at EY, added: “Although the ongoing impact of geopolitical uncertainties and continuing rising input costs remain a real concern for sponsors, the strong funding levels across many schemes will likely bring some reassurance. For many trustees and sponsors, this creates greater flexibility to align on long-term objectives and proactively assess how schemes can deliver value. As the market evolves, now is a good time to explore the full range of new opportunities available to well-funded schemes.”