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Retirement benefit and other post-retirement obligations (Tables)
 12 Months Ended
Dec. 31, 2023
Text block [abstract]  
Summary of Defined Plan Analysis
At 31 December 2023, the UK Group plan had approximately 26,300 members, analysed in the following table:
 
         
All figures in %      Active        Deferred       Pensioners        Total  
Defined benefit   
 
–
 
   
 
15
 
   
 
33
 
   
 
48
 
Defined contribution   
 
10
 
   
 
42
 
   
 
–
 
   
 
52
 
         
Total
   
 
10
 
   
 
57
 
   
 
33
 
   
 
100
 
Summary of Principal Assumptions Used for UK Group Plan and US PRMB
The principal assumptions used for the UK Group plan and the US PRMB are shown below. Weighted average assumptions have been shown for the other plans, which primarily relate to US pension plans.
 
                     
               
2023
                       2022                   2021  
All figures in %  
UK
Group
plan
    
Other
plans
    
PRMB
         
UK Group
plan
    
Other
plans
     PRMB    
UK Group
plan
    
Other
plans
     PRMB  
Inflation  
 
3.0
 
  
 
2.0
 
  
 
–
 
       3.4       2.0       –       3.3       1.4       –  
Rate used to discount plan liabilities  
 
4.6
 
  
 
4.9
 
  
 
5.0
 
       4.9       5.3       5.3       1.9       2.8       2.6  
Expected rate of increase in salaries  
 
3.5
 
  
 
2.5
 
  
 
–
 
       3.9       2.9       –       3.8       2.7       –  
Expected rate of increase for pensions in payment and deferred pensions  
 
1.75 to
5.10
 
 
  
 
–
 
  
 
–
 
      
1.95 to
5.20
  
 
     –       –      
2.35 to
5.10
  
 
     –       –  
Initial rate of increase in healthcare rate  
 
–
 
  
 
–
 
  
 
6.5
 
       –       –       6.5       –       –       6.3  
Ultimate rate of increase in healthcare rate  
 
–
 
  
 
–
 
  
 
5.0
 
  
 
     –       –       5.0       –       –       5.0  
Summary of Remaining Average Life Expectancy in Years of Pensioner Retiring at Age 65
Using the above tables, the remaining average life expectancy in years of a pensioner retiring at age 65 on the balance sheet date for the UK Group plan and US plans is as follows:
 
               
                     UK                          US  
All figures in years   
   2023
         2022         2021    
 
   
   2023
         2022         2021  
Male   
 
21.8
 
      22.5        22.6       
 
20.7
 
      20.6        20.5  
Female   
 
24.1
 
      24.7        24.8    
 
   
 
22.6
 
      22.6        22.5  
The remaining average life expectancy in years of a pensioner retiring at age 65, 20 years after the balance sheet date, for the UK and US Group plans is as follows:
 
               
             UK                          US          
All figures in years   
   2023
         2022         2021    
 
   
   2023
         2022         2021  
Male   
 
23.4
 
      24.1        24.2       
 
22.2
 
      22.1        22.0  
Female   
 
25.8
 
      26.4        26.5    
 
   
 
24.1
 
      24.0        23.9  
Summary of Amounts Recognised in Income Statement
The amounts recognised in the income statement are as follows:
 
All figures in £ millions  
UK Group
plan
    
Defined
benefit
other
    
Sub-total
    
Defined
contribution
    
PRMB
    
2023
 
 
Total
  
Current service cost  
 
16
 
  
 
2
 
  
 
18
 
  
 
45
 
  
 
–
 
  
 
63
 
Past service cost  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
Settlements  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
Administration expenses  
 
8
 
  
 
–
 
  
 
8
 
  
 
–
 
  
 
–
 
  
 
8
 
Total operating expense
  
 
24
 
  
 
2
 
  
 
26
 
  
 
45
 
  
 
–
 
  
 
71
 
Interest on plan assets  
 
(148
) 
  
 
(5
) 
  
 
(153
) 
  
 
–
 
  
 
–
 
  
 
(153
) 
Interest on plan liabilities  
 
121
 
  
 
6
 
  
 
127
 
  
 
–
 
  
 
–
 
  
 
127
 
Net finance (income)/expense
  
 
(27
) 
  
 
1
 
  
 
(26
) 
  
 
–
 
  
 
–
 
  
 
(26
) 
Net income statement charge
  
 
(3
) 
  
 
3
 
  
 
–
 
  
 
45
 
  
 
–
 
  
 
45
 
 
                                       
 
2022
  
All figures in £ millions   UK Group
plan		      Defined
benefit
other		    
 Sub-total
     Defined
 contribution		      PRMB      Total  
Current service cost     17       2       19       46       –       65  
Past service cost     3       –       3       –       –       3  
Settlements     –       –       –       –       –       –  
Administration expenses     7       –       7       –       –       7  
Total operating expense
     27       2       29       46       –       75  
Interest on plan assets     (77 )      (3 )      (80 )      –       –       (80 ) 
Interest on plan liabilities     67       3       70       –       1       71  
Net finance (income)/expense
     (10 )      –       (10 )      –       1       (9 ) 
Net income statement charge
     17       2       19       46       1       66  
                                       
 
2021
  
All figures in £ millions   UK Group
plan		     Defined
benefit
other		    
Sub-total
     Defined
contribution		      PRMB      Total  
Current service cost     17       2       19       37       –       56  
Past service cost     –       –       –       –       –       –  
Settlements     –       –       –       –       –       –  
           
Administration expenses     6       –       6       –       –       6  
Total operating expense
     23       2       25       37       –       62  
Interest on plan assets     (55 )      (2 )      (57 )      –       –       (57 ) 
           
Interest on plan liabilities     49       3       52       –       1       53  
Net finance (income)/expense
     (6 )      1       (5 )      –       1       (4 ) 
Net income statement charge
     17       3       20       37       1       58  
Summary of Amounts Recognised in Balance Sheet
The amounts recognised in the balance sheet are as follows:
 
                         
 
2023
                              
 
2022
  
All figures in £ millions  
UK Group
plan
    
Other
funded
plans
    
Other
unfunded
plans
    
Total
         
UK Group
plan
    
Other
funded
plans
    
Other
unfunded
plans
     Total  
Fair value of plan assets  
 
3,060
 
  
 
107
 
  
 
–
 
  
 
3,167
 
  
 
     3,088       104       –       3,192  
Present value of defined benefit obligation  
 
(2,569
) 
  
 
(99
) 
  
 
(15
) 
  
 
(2,683
) 
  
 
     (2,514 )      (106 )      (17 )      (2,637 ) 
Net pension asset/(liability)
  
 
491
 
  
 
8
 
  
 
(15
) 
  
 
484
 
       574       (2 )      (17 )      555  
Other post-retirement medical benefit obligation        
 
(21
) 
             (25 ) 
Other pension accruals  
 
 
 
  
 
 
 
  
 
 
 
  
 
(8
) 
  
 
  
 
 
 
  
 
 
 
  
 
 
 
     (10 ) 
Net retirement benefit asset
  
 
 
 
  
 
 
 
  
 
 
 
  
 
455
 
  
 
  
 
 
 
  
 
 
 
  
 
 
 
     520  
Analysed as:
                  
Retirement benefit assets        
 
499
 
             581  
Retirement benefit obligations  
 
 
 
  
 
 
 
  
 
 
 
  
 
(44
) 
  
 
  
 
 
 
  
 
 
 
  
 
 
 
     (61 ) 
Summary of Gains (Losses) Recognised in Other Comprehensive Income
The following gains/(losses) have been recognised in other comprehensive income:
 
 
All figures in £ millions
   
 
   2023
    
 
   2022
     
 
   2021
  
Amounts recognised for defined benefit plans   
 
(86
) 
     44        145  
Amounts recognised for post-retirement medical benefit plans   
 
1
 
     10        4  
Total recognised in year
   
 
(85
) 
     54        149  
Summary of Fair Value of Plan Assets
The fair value of plan assets comprises the following:
 
                     
 
2023
     
 
                   
 
   2022
  
All figures in %   
UK Group
plan
     
Other
funded plans
     
Total
            UK Group
plan		      Other
funded plans		      Total  
Insurance   
 
33
 
   
 
–
 
   
 
33
 
         33        –        33  
Equities   
 
15
 
   
 
1
 
   
 
16
 
         14        1        15  
Fixed interest securities   
 
6
 
   
 
2
 
   
 
8
 
         5        2        7  
Property   
 
5
 
   
 
–
 
   
 
5
 
         6        –        6  
Pooled asset investment funds (including LDI)   
 
24
 
   
 
–
 
   
 
24
 
         23        –        23  
Infrastructure   
 
11
 
   
 
–
 
   
 
11
 
         11        –        11  
Cash and cash equivalents   
 
1
 
   
 
–
 
   
 
1
 
         3        –        3  
Other   
 
2
 
   
 
–
 
   
 
2
 
   
 
      2        –        2  
Summary of Quoted and Non Quoted Market Price
The plan assets do not include any of the Group’s own financial instruments, or any property occupied by the Group. The table below further disaggregates the plan assets into those assets which have a quoted market price in an active market and those that do not:
 
             
 
2023
                   
 
2022
  
All figures in %   
Quoted
market price
     
No quoted
market price
            Quoted
market price		      No quoted
market price		  
Insurance   
 
–
 
   
 
33
 
         –        33  
Equities   
 
16
 
   
 
–
 
         15        –  
Fixed-interest securities   
 
8
 
   
 
–
 
         7        –  
Property   
 
–
 
   
 
5
 
         –        6  
Pooled asset investment funds (including LDI)   
 
24
 
   
 
–
 
         23        –  
Infrastructure   
 
–
 
   
 
11
 
         –        11  
Cash and cash equivalents   
 
–
 
   
 
1
 
         –        3  
Other   
 
–
 
   
 
2
 
   
 
      –        2  
Total
   
 
48
 
   
 
52
 
   
 
      45        55  
Summary of Liquidity Profile of UK Group Plan Assets
The liquidity profile of the UK Group plan assets is as follows:
 
 
All figures in %
   
 
   2023
     
 
    2022
  
Liquid – call <1 month   
 
48
 
      47  
Less liquid – call 1–3 months   
 
2
 
      2  
Illiquid – call >3 months   
 
50
 
      51  
Summary of Changes in Values of Plan Assets and Liabilities
Changes in the values of plan assets and liabilities of the retirement benefit plans are as follows:
 
                   
 
2023
                  
 
2022
  
All figures in £ millions   
UK Group
plan
    
Other
plans
    
Total
     UK Group
plan		     Other
plans		     Total  
Fair value of plan assets
             
Opening fair value of plan assets   
 
3,088
 
  
 
104
 
  
 
3,192
 
     4,125       120       4,245  
Recognition of Money Purchase assets   
 
–
 
  
 
–
 
  
 
–
 
     –       –       –  
Exchange differences   
 
–
 
  
 
(6
) 
  
 
(6
) 
     –       12       12  
Interest on plan assets   
 
148
 
  
 
5
 
  
 
153
 
     77       3       80  
Return on plan assets excluding interest   
 
(48
) 
  
 
5
 
  
 
(43
) 
     (1,000 )      (18 )      (1,018 ) 
Contributions by employer   
 
–
 
  
 
15
 
  
 
15
 
     15       2       17  
Contributions by employees   
 
7
 
  
 
–
 
  
 
7
 
     7       –       7  
Benefits paid   
 
(135
) 
  
 
(14
) 
  
 
(149
) 
     (136 )      (15 )      (151 ) 
Settlements   
 
–
 
  
 
(2
) 
  
 
(2
) 
     –       –       –  
Closing fair value of plan assets
   
 
3,060
 
  
 
107
 
  
 
3,167
 
     3,088       104       3,192  
Present value of defined benefit obligation
             
Opening defined benefit obligation   
 
(2,514
) 
  
 
(123
) 
  
 
(2,637
) 
     (3,588 )      (143 )      (3,731 ) 
Recognition of Money Purchase liabilities   
 
–
 
  
 
–
 
  
 
–
 
     –       –       –  
Exchange differences   
 
–
 
  
 
6
 
  
 
6
 
     –       (14 )      (14 ) 
Disposals   
 
–
 
  
 
–
 
  
 
–
 
     –       1       1  
Current service cost   
 
(16
) 
  
 
(2
) 
  
 
(18
) 
     (17 )      (2 )      (19 ) 
Past service cost   
 
–
 
  
 
–
 
  
 
–
 
     (3 )      –       (3 ) 
Administration expenses   
 
(8
) 
  
 
–
 
  
 
(8
) 
     (7 )      –       (7 ) 
Interest on plan liabilities   
 
(121
) 
  
 
(6
) 
  
 
(127
) 
     (67 )      (3 )      (70 ) 
Actuarial losses – experience   
 
(61
) 
  
 
(2
) 
  
 
(63
) 
     (25 )      (2 )      (27 ) 
Actuarial gains – demographic   
 
52
 
  
 
–
 
  
 
52
 
     14       –       14  
Actuarial (losses)/gains – financial   
 
(29
) 
  
 
(3
) 
  
 
(32
) 
     1,050       25       1,075  
Contributions by employees   
 
(7
) 
  
 
–
 
  
 
(7
) 
     (7 )      –       (7 ) 
Benefits paid   
 
135
 
  
 
14
 
  
 
149
 
     136       15       151  
Settlements   
 
–
 
  
 
2
 
  
 
2
 
     –       –       –  
Closing defined benefit obligation
   
 
(2,569
) 
  
 
(114
) 
  
 
(2,683
) 
     (2,514 )      (123 )      (2,637 ) 
Summary of Changes in Value of US PRMB
Changes in the value of the US PRMB are as follows:
 
All figures in £ millions   
 
   2023
    
 
   2022
  
Opening defined benefit obligation   
 
(25
) 
     (34 ) 
Exchange differences   
 
1
 
     (3 ) 
Interest on plan liabilities   
 
–
 
     (1 ) 
Actuarial gains – experience   
 
2
 
     5  
Actuarial (losses)/gains – financial   
 
(1
) 
     5  
Benefits paid   
 
2
 
     3  
Closing defined benefit obligation
   
 
(21
) 
     (25 ) 
Summary of Effect Percentage of Discount Rate Increase (Decrease) on Defined Benefit Obligation and Total Pension Expense
The effect of a one percentage point increase and decrease in the discount rate on the defined benefit obligation and the total pension expense is as follows:
 
                        
                        
            
 
2023
  
All figures in £ millions
   
1% increase
    
1% decrease
  
Effect:
     
 
(Decrease)/increase in defined benefit obligation – UK Group plan
   
 
(203
) 
  
 
251
 
 
(Decrease)/increase in defined benefit obligation – US plan
   
 
(5
) 
  
 
5
 
The effect of members living one year more or one year less on the defined benefit obligation is as follows:
 
                        
                        
             
 
2023
  
All figures in £ millions
   
One year
increase
     
One year
decrease
  
Effect:
      
 
Increase/(decrease) in defined benefit obligation – UK Group plan
   
 
58
 
   
 
(58
) 
 
Increase/(decrease) in defined benefit obligation – US plan
   
 
2
 
   
 
(2
) 
The effect of a half percentage point increase and decrease in the inflation rate is as follows:
 
                                                 
             
 
2023
  
All figures in £ millions
   
0.5% increase
     
0.5% decrease
  
Effect:
      
 
Increase/(decrease) in defined benefit obligation – UK Group plan
   
 
61
 
   
 
(58
) 
 
Increase/(decrease) in defined benefit obligation – US plan
   
 
–
 
   
 
–