XPS Pensions Group plc Annual Report and Accounts 2025

Strong

growth and

broadening

horizons

XPS Pensions Group plc

Annual Report and Accounts 2025

Strategic report

Highlights 2

At a glance 4

Investment case 5

Business model 6

Strategy in action – Investing in technology 8

Markets overview 10

Strategy in action – growth through mergers

andacquisitions 12

Our strategy 14

Co-Chief Executives’ review 16

Strategy in action – largest first-time outsource 20

Stakeholder engagement 22

Sustainability 24

Non-financial and sustainability

information statement 45

Chief Financial Officer’s review 46

Principal risks and uncertainties 52

Viability statement 59

Governance

Chairman’s introduction 60

Board of Directors 62

Board and Committee composition and operation 64

Nomination Committee 68

Audit & Risk Committee 71

Sustainability Committee 74

Directors’ remuneration report 76

Annual report on remuneration 90

Directors’ report 100

Directors’ responsibility statement 104

Financial statements

Independent auditor’s report 105

Consolidated statement of comprehensive income 113

Consolidated statement of financial position 114

Consolidated statement of changes in equity 115

Consolidated statement of cash flows 116

Notes to the consolidated financial statements 117

Statement of financial position – Company 150

Statement of changes in equity – Company 151

Statement of cash flows – Company 152

Notes to the financial statements–Company 153

Company information 158

Our strategic framework for growth

A forward-looking, ambitiousbusiness

XPS is a leading UK consulting and

administration business specialising in

thepensions sector and providing wider

rangingsupport to insurance companies

inthelife andbulk annuities sector.

Our purpose

Why we exist

We exist to shape and support pension

schemesand other institutions that provide

long-term financial security to people, for

the benefit of society, and at the same time

achieveprofitable growth.

Our vision

What we want to achieve

We will constantly challenge the status quo

to drive better outcomes for members and

policyholders, offering our people exciting

andrewarding careers.

Our mission

What drives us

We strive to be leaders in consulting and

administration with brilliant people and leading

technology enabling pension schemes, insurers

and other financial institutions to deliver better

outcomes fortheir members and policyholders.

Our ambition is to be the best employer in

ourmarket, recognising that our people are

atthe heart of what we do and are critical to

ourfuture success.

Contents

Insurance

consulting

page 12

Clients

page 20

Technology

page 8

Spotlight on

Strategy

in action

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Sustainability supports not only the delivery of our

purpose, but also our mission and strategy at XPS. It

enables us to be leaders in actuarial and investment

consulting and pensions administration because we

deliver better outcomes for all our stakeholders through

sustainability action.

Our sustainability framework has the mission to “shape a

better future”. With clear ambitions for each of its priority

areas, the framework supports our corporate priorities

with the ultimate aim to ensure that sustainability is

embedded in our business model, products and services.

Read more on pages 14 and 15

Our strategy

Our strategy is centred around four key pillars, while

remaining focused on achieving profitable growth.

Regulatory

change

Expand

services

Grow

market share

Mergers and

acquisitions

Our values

We do the

right thing

We are

agile

We are

helpful

We are

ambitious

We are

experts

XPS Pensions Group plc Annual Report and Accounts 2025

Highlights

Financial

Revenue excluding NPT

+18%

FY 2025 £231.8m

FY 2024 £196.6m

Proposed full year dividend

FY 2025 11.9p

FY 2024 10.0p

+19%

Adjusted EBITDA excluding NPT

FY 2025 £69.7m

FY 2024 £54.8m

+27%

Adjusted diluted earnings per share excluding

NPT

FY 2025 20.6p

FY 2024 15.1p

+35%

FTE employees

FY 2025 1,901

FY 2024 1,712

+11%

1 FY 2024 Group revenue presented excluding £2.8 million of NPT

revenue, as this business was disposed of inNovember 2024.

2 Adjusted EBITDA excludes the impact of exceptional and non-

trading items (see note 5 in the financial statements). FY 2024 also

excludes the results of the NPT business disposed of during FY

2024. FY 2024 adjusted EBITDA including the results of the NPT

business was £55.3 million. See table 1 in the appendix to the Chief

Financial Officer’s review for more detail.

3 Adjusted diluted earnings per share is based on adjusted profit

after tax, which excludes the impact of exceptional and non-

trading items, and the tax impact of these items (see note 5 in the

financial statements). In the prior year this also

excludes the results of

the NPT business disposed of during the year (see table 3 in the appendix

to the Chief Financial Officer’s review). FY 2024 adjusted diluted earnings

per share including the NPT business was 15.3p.

4 As at year end.

5 Net debt to adjusted EBITDA excluding NPT has increased due to

the acquisition of Polaris Actuaries and Consultants Ltd (Polaris) in

February 2025.

6 Profit before tax in FY 2024 benefits from the gain on disposal of

the NPT business. Excluding this, FY 2024 profit before tax would

have been £30.0 million, giving a 37% increase year on year.

7 Basic EPS in FY 2024 benefits from the gain on sale of the NPT

business. Excluding this gain, FY 2024 basic EPS would have been

10.5p, which means the growth for FY 2025 would be 40%.

Profit before tax

FY 2025 £40.8m

FY 2024 £62.5m

-35%

Basic EPS

FY 2025 14.7p

-44%

Net debt/adjusted EBITDA excluding NPT

FY 2024 0.27x

+111%

FY 2025 0.57x

FY 2024 26.2p

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

£4.1bn

2024: £2.8bn

Value of liabilities over whichwe provided risk transfer advice

2024: 88

Number of schemes that we advise with over £1bn of assets

1.2m

2024: 1.1m

Members under administration

+24 eNPS

2024: +31 eNPS

High eNPS score for the second year in a row

£6.3m

2024: £5.5m

Continuing investment in softwareassets to drive

operationalefficiencies and improvecustomer experience

Operational Sustainability

Senior management positions

held bywomen

38%

Number of clients in Sustainable funds

Proportion of electricity that is

renewable by kWh/square foot

69%

Our award-winning streak continues...

In February 2025, we were proud to win the Growth

Business of the Year award at the plc awards. This

accolade acknowledges companies that have enhanced

their performance and long-term prospects through

strategic, operational, and/or financial changes.

XPS was also awarded the Actuarial/Pensions

Consultancy of the Year and Sponsor Covenant/

IRM Adviser of the Year at the UK Pensions Awards.

Furthermore, our proprietary actuarial software

“Radar” was again awarded Software of the Year by

Actuarial Post.

FY 2025 40

FY 2025 59

FY 2024 36

FY 2024 45

FY 2025 82,957

FY 2024 61,291

More information on the five people awards won in

2025 – see page 27

More information on XPS technology – see page 8

XPS Pensions Group plc Annual Report and Accounts 2025

At a glance

What we do

XPS Group is a leading UK consulting and administration business specialising

in the pensions sector and providing wider ranging support to insurance

companies in the life and bulk annuities sector. We have benefits of scale

– wehave a breadth of experience to draw on and can invest in solutions

for the benefit of our clients – yet we remain agile, able to respond quickly

astheworld around our clients shifts.

Welcome to XPS Group

Our services

UK locations

Our 15 locations give us access

toemployees, expertise

andclientsacross the UK.

1,900+

Employees

Our 1,900+ employees with market-

leading experience and knowledge

and pride themselves on the highest

delivery standards to solve our

clients’ needs.

1,300+

Clients

We build strong relationships

withour clients, which lead

to repeat business and

opportunitiesto cross-sell.

The foundations of a thriving business

Actuarial and Consulting

Investment consulting

Administration

We help make sure

there is enough

moneyin schemes

We advise on where to

invest the assets

We keep all the records,

communicate with

members and pay

thepensions

Pensions

We provide pragmatic advice

that addresses the specific and

often complex challenges faced

by UK pension schemes and their

corporate sponsors.

xpsgroup.com/what-we-do/pensions-

advisory/

Insurance

We provide consulting services

that are strategically designed

tohelp life and annuity insurance

clients navigate market

disruption and stay ahead of

evolvingregulations.

xpsgroup.com/what-we-do/insurance-

consulting/

Investment

We provide clear and

independentinvestment advice

which we help clients implement

quickly and effectively.

xpsgroup.com/what-we-do/

investment-consulting/

Administration

Our award-winning pensions

administration service puts

scheme members at the heart

of everything we do.

xpsgroup.com/what-we-do/

administration/

Self Invested Pensions

XPS Self Invested Pensions is

an award-winning SIPP and

SSAS pension provider, trustee

and administrator, which has

specialised in self invested

pensions for more than 40 years.

xpsselfinvestedpensions.com

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Investment case

Why invest in XPS Group?

Diversified and

stable client base

We have long-standing relationships with alarge

and diverse client base, consisting of over 1,300

clients. We have a strong brand and have won

multiple industry awards for our client service.

Read more on pages 12 and 13

acquisitions

since listing in 2017

XPS Pensions Group plc Annual Report and Accounts 2025

Our resources

Business model

Our people

Experts in their fields, our people

drive the business. They’re the

innovators, the problem-solvers,

theforward-thinkers, andthat’s

whywe invest in them.

Our culture

Values driven, employee centric,

inclusive, friendly, meritocratic –

our culture empowers our business.

Our technology

We invest in technology to deliver

our services efficiently, and to bring

clarity and understanding to the

complex problems we help to solve.

Our financial strength

We are consistently profitable with

the financial resources to invest

in the development of services to

anticipate client needs.

XPS Group’s unique proposition is its ability to add value across its business.

Our people, culture, technology and financial strength make this possible.

Delivering strong and stable growth

Specialist insight and expertise:

Our team of experts brings

deep knowledge and

experience to the table.

Exceptional quality service

and tailored solutions:

We pride ourselves on

delivering a quality service.

Our culture: Our culture

and values guide us in

everything we do.

Diverse client base: XPS

serves a diverse range of clients,

including large corporate schemes,

public sector funds, smaller

pension arrangements and other

financial institutions.

Strong brand: Our strong

award-winning brand sets

us apart from our competitors

and communicates our values

and brand promise.

Our competitive advantage

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Value for all stakeholdersHow we create value

Clients

• Specialist insight and expertise

leading tobetter outcomes for

allstakeholders

• High-quality service

andtailored solutions

• Value for money

Read more on page 17

Effective capital allocation is crucial for

sustained growth and competitiveness. It

plays a vital role in shaping the firm’s overall

strategy and ensuring long-term success.

Capital allocation priorities

Organic

growth

Best in class

Technology

Platform

Progressive

dividends

Earnings

enhancing

strategic M&A

Capital

allocation

priorities

XPS Pensions Group plc Annual Report and Accounts 2025

Strategy in action

Investing in technology for service

efficiency and problem resolution

At XPS, we use technology to do complex work on behalf

of our clients, across a wide range of activities, from

complex financial modelling to the record keeping and

administration of over a million people’s pension benefits.

In many areas we have developed our own bespoke

technology, to be able to serve our clients effectively

while providing a unique selling proposition (USP) that

supports acquiring new clients and also enhances the

efficiency and security of our service delivery.

In the area of pensions administration specifically, in

recent years we have used third-party software to

deliver our services, primarily as a legacy of the

corporate history of the Group which has grown

through mergers over the years. We decided

that there would be multiple benefits for us

and our clients if we invested in a brand new

administration system, built by us, to meet

the specific needs of us and our clients.

This new platform is called Aurora. It

was launched in June 2023 after two

years of development, offering a

clean break from legacy systems

with its scalable, flexible,

and durable cloud-native

architecture.

Spotlight on

Technology

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

Spotlight on

Technology

We have continued to develop the capability of Aurora

to be a platform capable of enabling market-leading

administration across all types of pension schemes,

whether defined benefit or defined contribution, public

sector or private sector.

Aurora offers many benefits for our clients – it delivers

better information to them, facilitates online member

access, has enhanced cyber security embedded in

its architecture, and is capable of delivering complex

projects (such as the McCloud remedy) on an automated,

scaled basis. Of course it has also driven efficiency in

our business, reducing third-party pay-aways. We have

migrated away from two of our four legacy systems,

and will complete the remaining two by 2027, achieving

further savings as we do.

In our Advisory businesses, Radar, our award-winning

actuarial software, has been named Software of the

Year at the Actuarial Post awards for the last two years.

This web-based tool provides real-time, user-friendly

information to assist trustees and employers with

pension scheme planning under the new regulations.

We continually invest to keep Radar at the cutting edge

of industry developments – for example, we developed

functionality to model ”run on for surplus” strategies,

even in advance of these discussions becoming

highly topical.

Members on the Aurora platform

300k

Schemes on the Aurora platform

XPS Pensions Group plc Annual Report and Accounts 2025

Competitive landscape with growth opportunities

Markets overview

We operate in the UK pensions and insurance consulting and administration

market. The market is large, growing, fragmented and largely independent

of the wider economy.

A large market

Overall, the pension fee market is estimated to be worth

approximately £2.5 billion per annum, with most fees

being generated across four key segments:

• Actuarial: calculates whether a defined benefit pension

scheme’s assets can fully satisfy the promises made to

members (liabilities) over time. As well as monitoring

a pension scheme’s financial position, actuaries will

recommend courses of action to protect scheme

members and sponsors against financial risk.

• Administration: focuses on ensuring pension scheme

members receive the correct payments on time

through the delivery of services such as record keeping,

calculations, communications and payroll services.

• Investment: advises on how a pension scheme’s assets

should be deployed to enable its liabilities to be met

over the long term without taking on undue risk.

• Employer covenant: reviews an employer’s financial

strength to determine its ability to meet its pension

obligations and, related to this, the level of investment

risk that can be taken.

The pensions fee market is increasingly overlapping

with the insurance consulting fee market, particularly

in the growing risk transfer market where insurers take

on pension scheme assets and liabilities. We also have

access to this market, and to the wider £1.5 billion+

market of third-party support provided to insurers.

A growing market

Historically, the UK pension fee market has grown

at a rate of between 3% and 4% per annum. This is

approximately in line with the rate of inflation, which is a

key driver of growth, as contracts and fees charged are

typically linked to inflation.

The pension fee market, however, also benefits from

regulatory and market growth drivers:

Regulatory

To protect scheme members and ensure they receive

payments owed when they are due, the regulatory

landscape for pension scheme trustees and sponsors

is constantly evolving. New regulations and guidance

regularly come into effect. Every time a new regulation is

passed, trustees and sponsors require tailored advice on

how the new rules affect them and what action should

be taken. Typically, work generated by new regulations

can run for years, thereby generating ongoing demand

and work.

A series of new regulations has come into force in recent

years from the Pension Schemes Act of 2021 to the Task

Force on Climate-related Financial Disclosures (TCFD),

the GMP equalisation ruling and the CMA Review. 2024

saw the introduction of a new Funding Code centred

around The Pensions Regulator’s expectations on how to

ensure members are protected over the longer term. As

with previous regulatory changes, the new Funding Code

will generate demand for our services over several years.

Further regulatory change is expected in the future,

which in turn will drive growth in the sector. One potential

area of change is centred around making it easier for

well-funded defined benefit schemes to run on, enabling

surpluses to be deployed for the benefit of members

and the sponsoring companies and at the same time

facilitating growth in the wider UK economy. Should

this result in a new Pension Schemes Bill, trustees and

corporate sponsors of schemes will require appropriate

advice, specifically with regard to what the best and most

appropriate long-term strategy for their schemes will

be. This may include going down the risk transfer path.

Regardless of which path is taken, XPS is well placed

to provide the advice and services needed and, in the

process, participate in future regulatory-driven growth.

Market

Just as new regulations can change the pensions

landscape and generate demand from schemes for

advice and solutions, so too do fundamental shifts

in financial markets. One such shift in markets has

taken place – the shift from a low-to-higher-interest/

inflationary rate environment. Pension schemes have

largely benefited, as the deficits caused by the previous

near-zero interest rate regime have either been sharply

reduced or replaced by surpluses. Such a change in

circumstances, though, requires advice – potentially

new solutions, such as de-risking, may be required

to lock in a scheme’s improved financial position and

members’ benefits. The effects of this regime change are

anticipated to persist over the medium to long term.

Already, this is being reflected in rising forecast

growth in the bulk annuities market through which the

responsibilities of a defined benefit pension scheme are

transferred to an insurance company. The bulk annuity

market for FY 2025 was just under £50 billion, similar to

the previous year, and the number of deals hit record levels

approaching 300 across the market. With private sector

pension liabilities estimated at £1.5 trillion, even at this

elevated growth level, the bulk annuity market remains a

long-term growth story, one in which we have an active

role to play. Whether or not a pension scheme is run by

trustees or the assets and liabilities are taken on by an

insurance company, advice, services and solutions will

still be required to adapt to new regulations or changing

markets. This is the support we already provide to trustees

and corporate sponsors. The £1.5 billion insurance fee

market, therefore, represents a key area of growth for us.

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

Another key area of market growth is the defined

contribution (DC) market. In essence, DC pensions are

tax-efficient bank accounts funded by contributions

from the individual or employer that are invested to

generate long-term income streams. DC pensions involve

transferring the risk associated with providing retirement

income from employer to employee. It is a market that is

growing – as at 31 December 2024, the market value of

the DC market stood at £650 billion compared to £471

billion in 2020.

Although employers are no longer responsible for

providing retirement income, DCs do not transfer away

the responsibilities of employers and trustees. Schemes,

therefore, still require administration services and advice.

A trend in DC markets is toward consolidation, and large

master trusts are emerging in the market; these too

require support from administrators and others.

An independent market

The UK pensions consulting and administration market

has in recent years shown itself to be largely independent

of the wider economy. Pension schemes continue to

require advice and solutions no matter the prevailing

stage of the economic cycle. Members still need to

be paid on time regardless of economic conditions.

Schemes’ ability to meet their obligations to members,

their financial strength and their respective strategies all

continue to require regular monitoring.

The pension fee market also benefits from in-built

protection against inflation. Across the industry, client

contracts typically incorporate annual price increases in

line with a measure of inflation.

A fragmented market

With a 10% market share XPS is one of the largest mid-

tier companies in the UK workplace pensions market.

Above sit three service providers for whom workplace

pensions are not 100% of their business. Below sit several

smaller industry participants. With a 100% focus on the

pensions industry, together with a fragmented market,

XPS is well placed to grow market share, both organically

and inorganically through M&A activity.

Case study:

Bulk annuities

Bulk annuities can take the form

of either a buy-in or a buy-out.

Usually, the former is step one on a

path to the latter.

A buy-in is where a pension scheme buys an

insurance policy to secure part or all of the promises

made to members. The pension scheme retains the

liability but has an asset that will meet this liability.

A buy-out is where the pension scheme is eventually

wound up after 100% of the liabilities have been

legally transferred directly to the insurer.

Bulk annuities generate demand for a wide range

of services that XPS provides, including large

amounts of advice and preparatory work on data,

benefit specifications, transaction broking services

for pension schemes and support for insurance

companies taking on the responsibility of protecting

and administering members’ benefits.

A degree of overlap between the pensions and

insurance markets has existed for some time now,

butthe overlap is growing larger.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic priority

Growth through mergers andacquisitions

Exciting expansion of our Insurance Consulting services through

the acquisition of Polaris Actuaries and Consultants Ltd (Polaris).

The worlds of pensions and insurance have been converging for

many years now, particularly in the area of bulk annuities, and we

have increasingly counted insurance companies among our clients in

recent times. We have been investing to grow our business in this

area, using the strong relationships we have with insurers and the

highly transferable skills that we possess.

In February 2025, our Insurance Consulting capabilities were

greatly enhanced with the strategic acquisition of Polaris.

Polaris was established in 2015 with the strategy to

provide insurance clients with high-quality actuarial

and technical services, supporting them on complex

financial, risk and regulatory projects. Today, they

provide services to the majority of the UK’s

largest insurance companies.

This acquisition represents a significant

leap forward in our capabilities, and the

combination is a powerful one, with XPS

bringing investment and skills to build

upon the already impressive growth

achieved by Polaris in recent years.

The addressable market for UK

insurance consulting services

is large, with life insurers

collectively spending well

over £1.5 billion p.a., and as

such there is a significant

opportunity for growth

in this area.

Spotlight on

Insurance

consulting

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

Building X-Ray to meet insurers’ data needs

We have developed our XPS X-Ray service for data due diligence

to help insurers to understand the risks associated with the most

complex pension risk transfer deals.

Until now, insurers writing “residual risk” deals have relied upon

sample testing to assess any residual data accuracy and incorrect

benefit risk.

We have enhanced our proprietary benefit modelling software,

used with clients for over ten years, to model benefits for all

members, not just a sample. Our comprehensive approach

empowers insurers to fully grasp and quantify the associated risks.

During the year we used our enhanced offering for a large

insurance company that was taking on a large complex pension

scheme, with over 7,000 members and 70 benefit structures. This

work identified issues with over 1,000 of the members, many of

which would have been overlooked by standard sample testing.

Thanks to insights provided by X-Ray, they were able to gain a deep

understanding of the risks associated with the residual risk cover

and to charge an appropriate premium.

David Honour – Headof

Insurance Consulting

andRoger Houlihan –

Founding director of Polaris

UK life and annuity insurance

consultingmarket per annum

£1.5bn

Master services agreements

withtheUK’s largest insurers

XPS Pensions Group plc Annual Report and Accounts 2025

Our strategy

Our strategic priorities

A strategy proven to deliver

Through the execution of our strategy, we have continued to deliver on our societal purposes and built scale across all

services in the UK pensions market – administration, actuarial, investment and employer covenant. We have delivered

profitable revenue growth in each of the eightyears since we became a publicly traded company in February 2017.

Regulatory change asadriverofactivity

Every time a new regulation comes into force, trustees,

corporate sponsors and members of pension schemes

require advice and ongoing support to understand the

changes being made and take appropriate action. The

need to protect members and ensure they receive the

correct payments when they are due is paramount,

so the regulatory environment for pension schemes is

constantly evolving.

Growth through expanding services

By continually investing in our platform and

technology, we can offer schemes of all sizes

best-in-class solutions across all key segments of the

pension sector, enabling us to pursue new mandates

and deliver more services to existing clients. With

the overlap between the pensions and insurance

industries becoming larger, we can look to deliver the

same services and solutions we provide trustees and

sponsors to insurers taking on schemes via the bulk

annuities market.

>38,000

calculations for

publicsector workers

through theMcCloud

rectificationproject

17%

Our clients who have

completed all stages of

GMP equalisation

£1.5bn

The size of the life

insurance consulting

fee market

The number of risk

transfer engagement

in the year

The four pillars that help us to be forward looking and ambitious:

Progress in FY 2025

We delivered the high-profile McCloud judgement rectification

project. As part of this work, we committed to completing more

than 38,000 calculations for public sector workers, showing

what they should have correctly received and delivered for every

member for whom there was adequate data. We also helped

clients understand and respond to the new Funding Code that

came into effect in September 2024 as well as continue to carry

out GMP equalisation work.

Progress in FY 2025

We rolled out our AI-driven AIDA tool which we developed to

help clients understand their options on whether a scheme ought

to run on or de-risk. We moved around 300,000 members,

approximately a third of the members we administer, onto Aurora,

our AI-driven proprietary administration system. To grow our

capability in the insurance consulting market, we established an

Insurance Consulting team to support insurers taking on large

pension schemes. We also acquired an insurance consulting firm.

Progress in FY 2025

Within Administration, we won several new client mandates

during the year, which included a new mandate to administer the

remaining SEI mastertrust, and we have successfully onboarded

John Lewis, a large first-time outsource. As a result, the number of

members under administration increased by 10% year on year to

1.2 million. Within Advisory, we won 9 risk transfer engagements

from new clients.

Progress in FY 2025

Acquired UK insurance consultancy business Polaris Actuaries

and Consultants Ltd to accelerate the Group’s strategy to

become a leading provider of services to the UK insurance

consulting market.

Priorities for FY 2026

• Help clients navigate the new Single Code of Practice and Funding

and Investment Code

• Continue roll out of GMP equalisation solution

• Leverage expertise in delivering the McCloud rectification

project within the March 2025 deadline to pursue further

McCloud work as well as ongoing administrator mandates

• Continue to support trustees and sponsors in their decision

making progress about running on versus risk transfer, especially

with a new Pension Schemes Bill potentially facilitating well-

funded pension schemes to run on

Priorities for FY 2026

• Roll out new products across client base including moving more

members onto Aurora

• Continue to increase our share of the Risk Transfer Market

• Further expand our insurance consulting capability

Priorities for FY 2026

• Continue to target new business pipeline with increased focus

on cross-sell opportunities

• Pursue first-time outsourcing and public sector opportunities

within Administration

Priorities for FY 2026

• Continue to evaluate potential opportunities that meet our

investment and strategic criteria

Key risks

• These include third-party supplier or outsourcing issues/errors,

theft and fraudand strategy

Key risks

• These include strategic planning and execution risks as well

as financial performance, information/cyber security, human

resources, client engagement and business conduct and reputation

Key risks

• These include strategic planning and execution, errors and

third-party supplier/outsourcing issues

Key risks

• These include financial performance and business conduct

andreputation

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

Growing market share

An expanded service offering and growing suite

of best-in-class solutions position us to win new

mandates from both new and existing clients and

in the process grow market share. By expanding

our service offering through establishment of a

new Insurance Consulting team, accelerated by the

acquisition of Polaris, we are now also targeting the

£1.5 billion+ insurance consultancy market.

Growth through M&A

Acquiring businesses that meet our investment criteria

can build our platform further as well as provide an

opportunity to grow market share. M&A remains a

core part of our strategy and with a strong balance

sheet and the share price progression, we are in a

strong position to pursue inorganic opportunities

to grow scale and capabilities in our core as well as

adjacent markets.

17%

Organic revenue growth

during the year

Our ranking in the

pension services

feemarket interms

ofrevenues

£17.7m

Revenues generated

byPolaris in FY 2024

* Unaudited

Number of businesses

acquired since becoming

a publicly traded

company in 2017

The year under review saw progress made across all four pillars of our strategy. With end markets benefiting from

long-term structural drivers, including a constantly changing regulatory landscape, the overlap between the pensions

andinsurance sectors growing and a team committed to delivering better outcomes for scheme members, the year

aheadwill see us continue to execute our strategy across all four pillars.

Progress in FY 2025

We delivered the high-profile McCloud judgement rectification

project. As part of this work, we committed to completing more

than 38,000 calculations for public sector workers, showing

what they should have correctly received and delivered for every

member for whom there was adequate data. We also helped

clients understand and respond to the new Funding Code that

came into effect in September 2024 as well as continue to carry

out GMP equalisation work.

Progress in FY 2025

We rolled out our AI-driven AIDA tool which we developed to

help clients understand their options on whether a scheme ought

to run on or de-risk. We moved around 300,000 members,

approximately a third of the members we administer, onto Aurora,

our AI-driven proprietary administration system. To grow our

capability in the insurance consulting market, we established an

Insurance Consulting team to support insurers taking on large

pension schemes. We also acquired an insurance consulting firm.

Progress in FY 2025

Within Administration, we won several new client mandates

during the year, which included a new mandate to administer the

remaining SEI mastertrust, and we have successfully onboarded

John Lewis, a large first-time outsource. As a result, the number of

members under administration increased by 10% year on year to

1.2 million. Within Advisory, we won 9 risk transfer engagements

from new clients.

Progress in FY 2025

Acquired UK insurance consultancy business Polaris Actuaries

and Consultants Ltd to accelerate the Group’s strategy to

become a leading provider of services to the UK insurance

consulting market.

Priorities for FY 2026

• Help clients navigate the new Single Code of Practice and Funding

and Investment Code

• Continue roll out of GMP equalisation solution

• Leverage expertise in delivering the McCloud rectification

project within the March 2025 deadline to pursue further

McCloud work as well as ongoing administrator mandates

• Continue to support trustees and sponsors in their decision

making progress about running on versus risk transfer, especially

with a new Pension Schemes Bill potentially facilitating well-

funded pension schemes to run on

Priorities for FY 2026

• Roll out new products across client base including moving more

members onto Aurora

• Continue to increase our share of the Risk Transfer Market

• Further expand our insurance consulting capability

Priorities for FY 2026

• Continue to target new business pipeline with increased focus

on cross-sell opportunities

• Pursue first-time outsourcing and public sector opportunities

within Administration

Priorities for FY 2026

• Continue to evaluate potential opportunities that meet our

investment and strategic criteria

Key risks

• These include third-party supplier or outsourcing issues/errors,

theft and fraudand strategy

Key risks

• These include strategic planning and execution risks as well

as financial performance, information/cyber security, human

resources, client engagement and business conduct and reputation

Key risks

• These include strategic planning and execution, errors and

third-party supplier/outsourcing issues

Key risks

• These include financial performance and business conduct

andreputation

XPS Pensions Group plc Annual Report and Accounts 2025

Another strong year of growth

Co-Chief Executives’ review

Eight consecutive years of revenue growth have

transformed our business. Back in February 2017, we

hadaround 400 people and generated approximately

£50 million in revenues and £17 million of EBITDA. Today,

we are a leading provider of advisory and administration

services to pension schemes, and increasingly to

insurance companies. Our people number around 2,000,

and our revenues have increased to over £230 million

(with EBITDA of £70 million) and our shares now trade on

the FTSE 250. Our FTSE 250 promotion highlights how

far we have come in a relativelyshort space of time.

A record year of growth

For the year ended 31 March 2025, we are reporting total

Group revenues of £231.8 million, a 16% increase on FY

2024’s £199.4 million (FY 2024 as reported including

NPT), or a 18% increase on a like-for-like basis. We have

maintained the step-change in revenue growth from

mid-high single digits to the double-digit rates we have

been reporting for the last three years, despite tough

comparators. We have continued to grow on a very

tough comparator prior year where we grew revenues

by 20%, a testament to how the UK pensions market and

our business model are largely independent of wider

macroeconomic and geopolitical dynamics.

Drivers of strong performance

Major contributors to this year’s performance include the

high level of demand for our data cleansing, GMP and risk

transfer services alongside new business wins, and the

high-profile McCloud rectification project for our public

sector clients. Other drivers include the inflation linkage

of our contracts in line with standard industry practice

as well as market generated tailwinds – specifically the

improving funding position of pension schemes (which

means schemes require advice on the broader range of

options available to them) and further regulatory change.

Operational gearing and profitability

Revenue growth has been generated almost entirely

organically and has comfortably exceeded inflation.

For the third consecutive year, XPS has benefited from

operational gearing – earnings growth exceeding that of

revenues. FY 2025 adjusted EBITDA of £69.7 million came

in 27% higher than FY 2024’s £54.8 million; statutory profit

before tax was down 35% to £40.8 million compared to

£62.5 million in FY 2024 due to last year’s £32.5 million

gain on the disposal of the NPT business; while adjusted

diluted EPS grew 36% year on year to 20.6p from 15.1p in

FY 2024. This operational gearing, and margin expansion,

Our business model and the market in

which we operate in can be viewed as

being largely independent of the wider

economic outlook.”

Paul Cuff

Co-Chief Executive Officer

The investments that we have made in

our people, services and technology

have really started to pay off.”

Ben Bramhall

Co-Chief Executive Officer

The year ended 31 March 2025 has seen us extend our record of growing

revenues every year since our 2017 initial public offering (IPO) on the London

Stock Exchange.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

is the product of the investment we have made both in our

operating model (to drive efficiencies) and our services

where our focus to ensure we can deliver what our clients

and the wider market needs is resulting in growth in higher

margin project work. Even after normalising for the one-off

impact of some of this higher margin project work, margin

improved in-line with our plan.

Balance sheet strength and dividend growth

As at year end, Group leverage stood at 0.57x even after

funding the initial £23.0 million cash consideration for

the Polaris acquisition, and well below our medium-term

leverage target of 1.0-1.5x. Our strong balance sheet

allows us to propose a 19% increase in the total dividend

for the year in line with our progressive dividend policy

alongside demonstrating continued confidence in the

Group’s prospects.

Actuarial and Consulting: navigating a changing market

At the divisional level, Actuarial and Consulting, our

biggest division, increased revenues 14% to £106.1 million

(FY 2024: £93.4 million) due to a combination of strong

client demand and the expansion of our offering. The

switch from a low- to a high-interest rate/inflationary

environment continues to drive client demand for advice

on how best to navigate the new macro backdrop and

whether new strategies, such as de-risking, ought to

be adopted. During the year, Actuarial and Consulting

won significant new business on risk transfer mandates

(helping clients to de-risk by engaging with insurers on

bulk annuity transactions), including work from outside

our own client base. An increasing number of clients are

also seeking advice on whether strategies to “run on for

surplus” might be a better long-term strategy for them.

Administration: Delivering growth and innovation

Administration, our next largest division, posted the

strongest year on year growth rate. Revenues were up

30% to £93.7 million (FY 2024: £71.9 million) thanks to

GMP equalisation and McCloud judgement rectification

work, new client wins and the lagged impact of annual

price increases implemented at times of higher inflation.

As at 31 March 2025, the number of members under

administration stood at around 1.2 million, a year on year

increase of 9%. We were pleased to successfully onboard

the administration of the John Lewis Partnership pension

scheme, which went live slightly ahead of schedule in

February 2025.

Administration also benefited from the successful roll out

of Aurora, our proprietary administration system. During

the year, we moved around 300,000 members onto

Aurora. Aurora, which leverages cloud-based technology,

is a win for both members and XPS. Members benefit

from a more efficient digital system and online access.

XPS benefits from being able to turn off legacy systems,

capture efficiency gains and provide a better service to

clients. Among the members now administered using

Aurora are the 67,000 members of the National Pension

Trust, the master trust we sold to SEI in November

2023 but where we retained the role of administrator.

During the year we won an expanded role with SEI, as

the administrator to its wider master trust that NPT is

merging into. This will go live during FY 2026.

Investment Consulting: Solidifying gains

Investment Consulting is the only one of our divisions to

have recorded a small 4% year on year decline in revenues

to £19.4 million (FY 2024: £20.3 million). Thedecline was

expected as demand normalised following 46% growth in

the previous two years. This growth, which was triggered

in part by the autumn 2022 gilt market crisis, was centred

around increased demand for portfolio rebalancing work

and hedging strategy reviews along with the award of

mandates for the independent oversight of fiduciary

managers. We are very pleased with the division’s

performance over the past three years and we see

attractive opportunities for Investment Consulting to take

market share in the years ahead. For example, expensive

fiduciary management solutions targeting higher

returns may no longer be attractive as schemes have

become better funded. Instead, a high-quality traditional

investment consulting approach – which our Investment

Consulting division offers at a much lower cost, maybe

more appropriate.

SIP: Organic growth and new partnerships

Finally, SIP revenues were up 15% to £12.6 million (FY

2024: £11.0 million). All of the growth was generated

organically as a result of strong new business sales

(supported by our inclusion on the panel of recommended

SIPP providers for St James’s Place, one of the UK’s

leading financial advisers), alongside higher interest on

cash deposits, which we partially share with our clients.

Buoyant end markets

Our good revenue growth is down to several factors.

The pensions industry is being driven, as always, by

regulatory and market change which, in turn, drives

demand for our services. As has so often been the case in

the last three decades, new regulations continue to come

into force, for example: the Pension Schemes Act 2021,

relating to how corporates finance their arrangements

and how schemes are treated following M&A; the 2018

GMP equalisation ruling, requiring trustees to correct

the unequal treatment of men and women in relation to

elements of defined benefit schemes that built up in the

1980s/1990s; and the CMA Review which recommended

schemes seek independent advice on fund managers

engaged on a fiduciary management basis. 2024 saw

further change with the new Funding Code, and the most

recent regulatory change has been a new Pensions Bill

laid before Parliament in June 2025, which among other

things makes the option to extract surplus much easier

for defined benefit pension schemes.

As is often the case with new regulations, schemes

will require tailored advice over a number of years to

understand how the change affects their members and

how best to respond.

Market-driven change also leads to multi-year work,

particularly when a fundamental shift has taken

place. The switch from a low- to a high-interest rate

environment is one such shift that has resulted in many

defined benefit pension schemes moving from deficits to

surpluses. While this is good news for the schemes, they

now require advice on what to do with these surpluses.

Should these be locked in? Should the scheme de-risk

and transfer its liabilities to insurers? More pension

schemes are choosing the de-risk option which is fuelling

growth in the bulk annuities market where insurance

companies take on the liabilities of pension schemes.

Aswell as generating multi-year work for our Risk

Transfer team, this is also leading to increased demand

from insurers for advice and support to manage their

enlarged books, thereby opening up further growth

opportunities for us. The recent Pensions Bill opens

XPS Pensions Group plc Annual Report and Accounts 2025

Co-Chief Executives’ review continued

up another avenue too – should schemes “run on for

surplus”, rather than moving to an insurer? Our clients

need advice on what is best for them, and schemes that

do run on will need a lot of support to do this effectively

for many years to come.

The pension fee industry is benefiting from multiple long-

term drivers, both regulatory and market related. Whilst

the increase in risk transfer work is reducing the number

of schemes, the increased activity levels mean we expect

our markets to see continued growth in the years ahead.

Proven strategy and committed people

On their own buoyant markets are not enough to deliver

consistently strong financial results. A strategy is required

to capture the growth opportunities presented. We

have a comprehensive strategy in place that has been

designed to do this, centred around four pillars:

• Regulatory change as a driver of activity;

• Growing market share;

• Growth through expanding services; and

• Growth through M&A.

Having the right strategy, though, is only one half of the

equation. Having the right people to execute is the other.

Our people are the reason behind our success. Without

them we would not deliver highly complex projects on

time and on budget, achieve major milestones, such as

joining the FTSE 250, announce record results or be

named Pensions and Actuarial Consulting Firm of the

Year at the Professional Pensions Awards for the third

time in five years and Employer Covenant Advisor of the

Year at the same ceremony. Our people not only go the

extra mile with their work but also for their colleagues

and the communities in which we operate. Each year

our Values in Practice Awards serve to showcase the

contributions our people make both inside and outside

the office, including volunteer work in their local

communities. To show our appreciation of our people’s

efforts over the course of the year, we awarded all

employees a voucher, outside of and in addition to the

usual bonus pool, to enjoy a great experience of their

choosing with their families and friends.

As a Group, we must deliver for our people consistently

over the long term by creating a working environment

where everyone feels valued and able to flourish. We were

delighted to receive the Business Culture Builder Award

and Best Working Environment and Practices Initiative

Award at the Business Culture Awards 2024. We are also

encouraged by the high Net Promoter Score (+24 last year)

we continue to receive from our employees. Also, our net

employee churn remains very low. We know that we must

continue to work hard to foster a positive culture at XPS.

Not only is this the right thing to do, but it makes business

sense too. A positive culture helps retain individuals and

attracts talent and leads to better outcomes for clients

and, in turn, strong business performance.

Investing in our platform

If our people have been key to our success, our ongoing

commitment to give our people the tools they need to

deliver by investing in technology and in our offering has

been the enabler. As the results we are reporting today

show, we are reaping the benefits of the investments we

have made to become a full-service solutions provider to

the pensions industry. The operational gearing we have

now enjoyed for three successive years reflects this.

Our commitment to investing in our technology, people

and services is ongoing and during the year ended

31March 2025 we continued to invest in new technologies

and systems. For example, we developed our Radar

platform to help clients understand their options and

enable informed decisions to be made on whether a

scheme ought to run on or de-risk. We continue to invest

in AI and are already seeing promising results from a

pilot project focused on improving the efficiency of our

Member Connect centre in our administration division.

Our investments in specifically trained large language

models are also bearing fruit.

Delivering complex projects

The platform we have built, and continue to invest in, has

allowed us to take on large and complex projects, some

of which are high priority and high profile. Delivering

these projects on time and on budget, particularly when

competitors have struggled to do so, will stand us in good

stead to continue to win new business and increase our

market share.

One high-profile project we successfully delivered during

the year was rectification work in relation to the McCloud

judgement. After reforming public service pension

schemes in 2014 and 2015, the government introduced

transitional protections for older members. However, in

December 2018, the Court of Appeal ruled that younger

members of the judicial and firefighters’ pension schemes

had been unlawfully discriminated against because the

protections did not apply to them. The McCloud Remedy

is a series of changes to public service pension schemes

in the UK designed to address age discrimination

identified in the McCloud judgment.

Put simply, pensions needed to be put back to where

they would have been had the changes not been made, a

complex task. Years of data regarding historical earnings

for thousands of affected members are required. A series

of calculations is needed to work out what members

should have received and then verified against multiple

different calculations. Foregone interest also needs to be

calculated and added into the settlement, while further

adjustments may have to be made if the settlement

pushes members into a higher tax bracket. Other

considerations, such as health benefits, must be taken

into account too.

Accurately calculating a remedy for one affected

individual is challenging enough, but in relation to the

immediate choice review for members who retired prior

to October 2023, we committed to completing more than

38,000 cases by the end of March 2025. Thanks to the

We expect market and regulatory

change will continue to generate high

demand for our services as will our

successful delivery of key projects that

showcase the expertise of our people

and capability of our platform.”

Paul Cuff

Co-Chief Executive Officer

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

incredible efforts of our people and the investment we

made in our Aurora technology platform, we delivered

for every single member where it was within our control

to do so. This equates to 90% of in-scope retired

members, the outstanding 10% relates to individuals

where complete data sets were not available or where

guidance from an external party (such as HMRC and/

or the Government Actuary) was required. Across all

categories of members, so including active, deferred,

and retired members, we produced more than 60,000

statements, covering 94% of members due a remediable

service statement. In addition, a further 3,000 statements

were issued for non-XPS administered clients, where we

were approached to provide wider assistance.

Webelievewe are, if not the only administrator, one of

only a very small number to have met the deadline for

such a high-profile project. We are confident this will open

up opportunities for new client wins, not just in relation

to McCloud but ongoing administrator work for clients

attracted to the robust and scalable systems that we have

clearly demonstrated sit within XPS. McCloud itself may

be one-off, but our successful delivery of the project, and

others like it, augurs well forfuture business wins.

Diversifying into adjacent markets

We are also investing to increase our capabilities to

capitalise on the growing overlap between the pensions and

insurance industries. We have set up a dedicated Insurance

Consulting team to support insurers taking on large pension

schemes via the bulk annuities market and more widely. As

with pension schemes, insurers require support, specifically

in areas such as financial reporting around reserving and

risk management around data architecture – services we

already provide to pension schemes. To head this team and

drive it forward, we appointed David Honour, previously a

senior partner in insurance consulting at PwC. At the end

of February, we acquired insurance consulting firm Polaris

Actuaries and Consultants.

Polaris has been integrated into the current XPS Insurance

Consulting team, which is focused on high impact, strategic

advice, consulting on transformational change at the

initiation stage of large scale projects. Polaris specialises in

using a flexible workforce to lead the delivery stages of such

projects, and as such is a highly complementary business.

The combination will create a significant opportunity for

growth as XPS will now be able to offer a full range of

services from a strategic consultancy at the front end

through to on-the-ground implementation. Polaris also offers

XPS the advantage of immediate access to long term, trusted

relationships with established Master Services Agreements

with majority of the UK’s leading insurers.

Just as we did with the pension fee market, we are building

capability and scale in the insurance fee market and in the

process adding another growth pathway to the business.

A responsible business

As a Group, we are focused on growing responsibly.

We continue to have high satisfaction scores from our

employee survey, and were awarded ‘Best Diversity,

Equality and Inclusion (DEI) Initiative’ at the UK Company

Culture awards. We continue to work towards achieving a

significant reduction in our direct carbon footprint and are

aiming to source 100% of our electricity from renewable

sources by 2030.

Outlook

Looking ahead, we expect market and regulatory changes

will continue to generate high demand for our services, as

will our successful delivery of key projects that showcase

the expertise of our people and the capability of our

platform. With the McCloud work now largely complete,

next year’s results will face tough comparators but

we still anticipate continued growth in line with Board

expectations. One of our largest administration clients,

John Lewis, has only recently gone live, while migrations to

our Aurora system will continue to drive efficiencies. With

workplace pensions high on the political agenda and the

recent tabling of the Pensions Bill to parliament, we are

also positive on the outlook for the pension fee market and

continue to see a considerable runway of growth in the

years ahead.

At the same time, we are excited about the opportunity

to diversify into the closely related insurance consulting

sector and are building scale to capture more of this

£1.5 billion market. Together with our core £2.5 billion

pension fee market, we are expanding our addressable

end markets to £4.0 billion. Notwithstanding the success

of the last few years, we are still laying the foundations for

future growth.

While we do not take the opportunities in front of us for

granted, we know that by continuing to execute well and

work hard for our clients, we have a strategy and platform

in place that have a long and growing track record of

delivery. We are confident that we are well placed for

further growth in FY 2026 and beyond.

Paul Cuff Ben Bramhall

Co-Chief Executive Officer Co-Chief Executive Officer

18 June 2025 18 June 2025

While we do not take the opportunities

in front of us for granted, we know that

by continuing to execute well and work

hard for our clients, we have a strategy

and platform in place that have a long

and growing track record of delivery.”

Ben Bramhall

Co-Chief Executive Officer

XPS Pensions Group plc Annual Report and Accounts 2025

Strategy in action

XPS Administration completes one

of its largest transitions of a first-

time outsource with the John Lewis

Partnership (JLP) Pensions Trust.

Spotlight on

Clients

Looking after our pension scheme

members and pensioners remains

apriority, and we are delighted that

this will continue to develop with

ourpartnership with XPS. Following

the Trustees’ appointment of XPS

inOctober 2023, we are pleased

withhow the transition has

progressed and the relationships

forged between teams. We know

JLPemployees transferring to

XPSwill continue to flourish

andwould like to extend

ahugethankyou for their

continuedsupport,

enthusiasmand

dedicationfor the

benefit of the

scheme andits

members.”

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

Scale and complexity

The transition involved 126,000

members, including 41,000

pensioners. This required the

development of tailored solutions to

continue to provide a high level of

services to members.

Getting to know members

Throughout the transition a

dedicated XPS Member Connect

team handled thousands of calls,

maintaining a high satisfaction score

with the scheme members.

Enhancing communications

The XPS Client Communications

team worked collaboratively with the

JLP team, supporting and enhancing

a series of complex, fully branded

personalised communications –

both internally and for the scheme,

building trust and familiarity.

Assisting the JLP team

XPS seamlessly integrated an

augmented service specialist team to

support the JLP Pensions Operations

team to support administration

service during the transition period.

Welcoming new colleagues

The transition included the TUPE

of 25 John Lewis Partners, who

were fully integrated into the XPS

environment through regular

meetings, training sessions, and

social events, each with a dedicated

XPS buddy for support.

Digital first

A new scheme website and member

portal, with unique modelling tools

and advanced features for hybrid

members, was developed to enhance

member choice and engagement.

Spotlight on

Clients

XPS Pensions Group plc Annual Report and Accounts 2025

Stakeholder engagement

Section 172 Statement

Stakeholder engagement is central to the Group’s strategy and sustainable success. The Board of Directors of the

Company acts in good faith to promote the long-term success of the Company for the benefit of its members as a

whole, taking into account the factors as listed in Section 172 of the Companies Act 2006:

a. the likely consequences of any decision in the

long term;

b. the interests of the Company’s employees;

c. the need to foster the Company’s business

relationships with suppliers, customers and others;

d. the impact of the Company’s operations on the

community and the environment;

e. the desirability of the Company maintaining

a reputation for high standards of business

conduct; and

f. the need to act fairly as between members of

the Company.

The Company’s purpose, values and culture are

established by the Board and embedded throughout the

Group and key decisions made.

When making key decisions, the Board is careful to

consider the interests and priorities of stakeholders, and

the consequences the decisions may have. The Board

recognises that stakeholders have differing interests and

gives careful consideration to balancing the views of all

stakeholder groups.

You can read about the Group’s principal risks and

key mitigations, including those in relation to clients,

employees and suppliers, on pages 52 to 58.

Engaging with our stakeholders

Clients Shareholders Regulators Employees Suppliers Communities, charities and

environment

Key interests

• Products and services

• Service performance and efficiency

• Competitiveness and value

• Compliance and data protection

• Sustainable products

• Financial performance and growth

• Dividends

• Timely and relevant communications

• Sound corporate governance and

stewardship

• Strategy aligned with long-term

sustainability and value creation

• Transparency and openness

• Proactivity and engagement in

consultation

• Compliance with regulation and

legislation

Key interests

• Engagement

• Reward

• Career opportunities

• Training and development

• Wellbeing

• Equality, inclusion and diversity

• Work-life balance and flexibility

• Responsible procurement and ethics

• Fair contract and payment terms

• Cost efficiency and value

• Local and worldwide social and

environmental impact

• Health and safety

Engagement strategy

The Company engages with clients

through key contacts who work day to

day with the clients. We also complete

client satisfaction surveys every two

years, and the Board reviews the

results. We hold conferences, webinars

and training exercises for clients

throughout the year, of which we see a

fantastic uptake.

Ben Bramhall (Co-CEO) is Scheme

Actuary on some of our largest client

accounts, and Paul Cuff (Co-CEO) also

works on corporate advisory projects

from time to time.

We engage with our shareholders

in various ways throughout the year

including financial results roadshows, and

regular meetings with analysts, investors

and potential investors. A Capital Markets

Event for institutional investors and

analysts was held in May 2025, covering

topics including the risk transfer and

insurance consulting markets, and the

Group’s investment in technology.

The Investors section of the XPS website

is updated throughout the year, to include

useful information for our shareholders.

The Board also attends the Annual

General Meeting and is available to

answer shareholder questions. At the

AGM, shareholder approval is sought for

the annual final dividend payment.

Imogen Joss, Remuneration Committee

Chair, engages through consultation

and meetings with major shareholders

in relation to executive remuneration.

Imogen engaged with the Group’s

ten largest shareholders in relation to

Executive Director remuneration during

April and May 2025.

Following Alan Bannatyne stepping

down as Chairman in September 2025,

incoming Chairman Martin Sutherland

will offer introductory meetings to the

Group’s largest shareholders.

The Company works with the regulators

by responding to requests and

consultations, submitting returns and

attending industry meetings. Margaret

Snowdon OBE is an adviser to The

Pensions Regulator and regularly updates

the Board on industry developments.

The FCA Consumer Duty has continued

to be an area of focus for the Board this

year. Aisling Kennedy (Consumer Duty

Champion) has engaged with the relevant

teams and subsidiary Boards to oversee

the Group’s compliance with Consumer

Duty regulation, and completion of our

first Consumer Duty report.

Engagement strategy

Aisling Kennedy is appointed as the

Designated Employee Engagement

Non-Executive Director. Aisling is Chair

of the Employee Engagement Group

(EEG) and updates the Board after each

EEG meeting.

Employees complete an annual employee

survey, the results of which are analysed

in detail and shared with the Board, and

an action plan is agreed.

An external and anonymous

whistleblowing hotline is available to

employees 24/7; any reports can be

escalated to the Board as required.

You can read more about employee

engagement on pages 26 to 29.

During the year, Imogen Joss (Senior

Independent Non-Executive Director)

supported the Group’s Values in Practice

Awards as Chair to the panel.

The Group has a designated Procurement

team and an external company which

engages with and carries out due

diligence on its suppliers. We conduct

formal and transparent tender processes

when required. An annual review of

existing suppliers, which provide services

that are deemed as higher risk (i.e.

process large amounts of our data or

have access to our offices), is completed

in addition to quarterly performance

reviews with key suppliers, and the Board

is made aware of any issues in relation to

supplier performance or agreements. Our

Supplier Code of Conduct communicates

what we expect from our suppliers. The

Board annually approves the XPS Modern

Slavery Statement.

The Sustainability Committee is a

Committee of the Board, and the majority

of members are Board members. The

Committee Chair updates the Board

following each meeting. You can read

the Committee report on pages 74

and 75. XPS is excellently positioned

to ensure our positive impact is wider

than the Group itself as we advise our

clients on sustainable investments; you

can read about this on pages 32 and 33.

You can read the Group’s Task Force on

Climate-related Financial Disclosures

(TCFD) Report on pages 35 to 44, and

our commitment to net zero on pages

35 to 43. You can also read about our

community support on pages 30 and 31.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Examples of stakeholder key interests being considered and impacting decisions during the year:

Service diversification:

Shareholders – Our shareholders’ key interests are the

growth of the Group and value creation. The acquisition

of Polaris Actuaries and Consultants Ltd will materially

accelerate the Group’s strategy of becoming a leading

player in the UK Insurance Consulting Market and add

another growth pathway to the business.

Employees – Our employees are interested in continued

professional development and our diversification into the

Insurance Consulting market will provide opportunities

for employees within the Group to further expand their

skillset.

Client – Expanding our service offering into this market

will allow us to broaden our offering to our clients,

including leading UK insurance companies taking on large

pension schemes.

Regulators – We ensure that we meet all regulatory

requirements when completing an acquisition.

Investment in our technology:

Employees – We are committed to giving our people

the tools that they need to deliver their work in an

efficient way.

Clients – We developed our Radar platform to help

clients understand their options and enable informed

decisions to be made; and our Administration platform,

Aurora, that we continue to invest in allows us to

support our clients with large and complex projects,

delivering these on time and on budget including the

McCloud remedy work.

Shareholders – The investment in our technology

continues to drive efficiency in our business, reducing

the cost for third party systems. We will achieve

further cost savings as we migrate away from two

remaining systems by 2027.

Clients Shareholders Regulators Employees Suppliers Communities, charities and

environment

Key interests

• Products and services

• Service performance and efficiency

• Competitiveness and value

• Compliance and data protection

• Sustainable products

• Financial performance and growth

• Dividends

• Timely and relevant communications

• Sound corporate governance and

stewardship

• Strategy aligned with long-term

sustainability and value creation

• Transparency and openness

• Proactivity and engagement in

consultation

• Compliance with regulation and

legislation

Key interests

• Engagement

• Reward

• Career opportunities

• Training and development

• Wellbeing

• Equality, inclusion and diversity

• Work-life balance and flexibility

• Responsible procurement and ethics

• Fair contract and payment terms

• Cost efficiency and value

• Local and worldwide social and

environmental impact

• Health and safety

Engagement strategy

The Company engages with clients

through key contacts who work day to

day with the clients. We also complete

client satisfaction surveys every two

years, and the Board reviews the

results. We hold conferences, webinars

and training exercises for clients

throughout the year, of which we see a

fantastic uptake.

Ben Bramhall (Co-CEO) is Scheme

Actuary on some of our largest client

accounts, and Paul Cuff (Co-CEO) also

works on corporate advisory projects

from time to time.

We engage with our shareholders

in various ways throughout the year

including financial results roadshows, and

regular meetings with analysts, investors

and potential investors. A Capital Markets

Event for institutional investors and

analysts was held in May 2025, covering

topics including the risk transfer and

insurance consulting markets, and the

Group’s investment in technology.

The Investors section of the XPS website

is updated throughout the year, to include

useful information for our shareholders.

The Board also attends the Annual

General Meeting and is available to

answer shareholder questions. At the

AGM, shareholder approval is sought for

the annual final dividend payment.

Imogen Joss, Remuneration Committee

Chair, engages through consultation

and meetings with major shareholders

in relation to executive remuneration.

Imogen engaged with the Group’s

ten largest shareholders in relation to

Executive Director remuneration during

April and May 2025.

Following Alan Bannatyne stepping

down as Chairman in September 2025,

incoming Chairman Martin Sutherland

will offer introductory meetings to the

Group’s largest shareholders.

The Company works with the regulators

by responding to requests and

consultations, submitting returns and

attending industry meetings. Margaret

Snowdon OBE is an adviser to The

Pensions Regulator and regularly updates

the Board on industry developments.

The FCA Consumer Duty has continued

to be an area of focus for the Board this

year. Aisling Kennedy (Consumer Duty

Champion) has engaged with the relevant

teams and subsidiary Boards to oversee

the Group’s compliance with Consumer

Duty regulation, and completion of our

first Consumer Duty report.

Engagement strategy

Aisling Kennedy is appointed as the

Designated Employee Engagement

Non-Executive Director. Aisling is Chair

of the Employee Engagement Group

(EEG) and updates the Board after each

EEG meeting.

Employees complete an annual employee

survey, the results of which are analysed

in detail and shared with the Board, and

an action plan is agreed.

An external and anonymous

whistleblowing hotline is available to

employees 24/7; any reports can be

escalated to the Board as required.

You can read more about employee

engagement on pages 26 to 29.

During the year, Imogen Joss (Senior

Independent Non-Executive Director)

supported the Group’s Values in Practice

Awards as Chair to the panel.

The Group has a designated Procurement

team and an external company which

engages with and carries out due

diligence on its suppliers. We conduct

formal and transparent tender processes

when required. An annual review of

existing suppliers, which provide services

that are deemed as higher risk (i.e.

process large amounts of our data or

have access to our offices), is completed

in addition to quarterly performance

reviews with key suppliers, and the Board

is made aware of any issues in relation to

supplier performance or agreements. Our

Supplier Code of Conduct communicates

what we expect from our suppliers. The

Board annually approves the XPS Modern

Slavery Statement.

The Sustainability Committee is a

Committee of the Board, and the majority

of members are Board members. The

Committee Chair updates the Board

following each meeting. You can read

the Committee report on pages 74

and 75. XPS is excellently positioned

to ensure our positive impact is wider

than the Group itself as we advise our

clients on sustainable investments; you

can read about this on pages 32 and 33.

You can read the Group’s Task Force on

Climate-related Financial Disclosures

(TCFD) Report on pages 35 to 44, and

our commitment to net zero on pages

35 to 43. You can also read about our

community support on pages 30 and 31.

Snehal Shah

Chief Financial Officer

XPS Pensions Group plc Annual Report and Accounts 2025

XPS promotes a diverse and inclusive culture, enabling people to realise their fullest potentials.

Material issues

Employee engagement, Inclusion, equality and diversity, Learning & development, Employee health & wellbeing

Empowering our people to thrive

Our sustainability framework: shaping a better future

Building on the materiality review and the strategy refresh conducted in FY 2024, our sustainability framework

reflectsits mission to “shape a better future”. With clear ambitions for each priority area, the framework supports

ourcorporate priorities.

Being a responsible business

XPS has a culture of strong governance that minimises risk, upholds high standards in conduct and complies

with legal standards.

Material issues

Business ethics & values, Corporate governance, Cyber security & data privacy, Human rights & modern slavery,

Supply chain management

Strengthening

ourcommunities

XPS contributes to the local

communities near its offices,

working together for a better

future.

Material issues

Community engagement,

Charitable giving

Protecting

ourenvironment

XPS works to mitigate climate

change by minimising its impact

on the environment.

Material issues

Climate change & environment,

Environmentally friendly culture

Supporting our clients

and members

XPS supports its clients and

members to optimise outcomes.

Material issues

Sustainable products & services,

Responsible investment,

Advising clients & members

Sustainability

Shaping a better future

At XPS, sustainability supports the delivery of our purpose, mission

and strategy. By embracing sustainability and taking action, we

deliver better outcomes for all our stakeholders and, at the same

time, strengthen XPS’s position as a leading provider of services

and solutions to pension schemes and insurance companies.

Sustainability is embedded in our

business model helping us support safe,

robust and well-understood pension

schemes for the benefit of people and

society. Our work with colleagues,

clients, members and communities

demonstrates how we shape a better

future for all.”

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

The Sustainable

Development Goals

We recognise that business can make a valuable contribution to

driving positive societal change. The corporate priorities identified

through our sustainability framework align with several United

Nations Sustainable Development Goals (SDGs):

Concrete sustainability action

To translate the framework into concrete sustainability action, XPS formulated a set of ambitions in each priority area

to “shape a better future”. All sustainability actions taken ladder up to these ambitions, which set a direction of travel

for our people, environment, community and client agenda.

Ambitions and targets

Empowering our

people to thrive

XPS promotes a diverse and inclusive culture, enabling people to realise their full potential.

Ambitions and targets:

• Reach 37% female senior managers by 2028

• Maintain employee approval rating of at least 90%

Strengthening

ourcommunities

XPS supports the people living near its business operations with the challenges they face.

Ambitions and targets:

• Increase our charitable giving and employee volunteering

Protecting our

environment

XPS works to mitigate climate change by minimising its impact on the environment.

Ambitions and targets:

• Achieve net zero by 2050

Supporting our

clients and

members

XPS supports its clients and members to optimise outcomes.

Ambitions and targets:

• Maintain satisfaction level of at least 80%

• Encourage sustainable investment

Effective sustainability governance

Ultimate responsibility for our sustainability framework rests with the Board of Directors. Oversight of the

implementation, progress and performance of the framework has been delegated by the Board to the Sustainability

Committee. You can read a report on the activities of this Board Committee, which met four times last year, on pages

74 and 75. Supported by Executive sponsor Snehal Shah, a dedicated Sustainability Working Group is responsible for

driving effective action as well as measuring and communicating progress and performance during the year.

Rachel Gillion

HR Director

XPS Pensions Group plc Annual Report and Accounts 2025

Our strategy prepares our Company

for the future by fostering an inclusive

environment that supports colleagues’

growth. Engaging with stakeholders –

employees, clients, shareholders, and

the community – aligns our initiatives

with their expectations, building a

resilient organisation.”

+24

eNPS score

34,000

training hours

89%

believe people of all backgrounds

can thrive in XPS

Sustainability continued

Empowering our people to thrive

Empowering people to thrive is central to our strategy. Continuous learning

programmes equip employees with the skills to excel, while engagement

efforts with clients and stakeholders build strong partnerships. Focusing on

these areas helps create a thriving environment that aligns with our strategic

objectives and vision of shaping a better future.

As XPS grows, so too does the expectation of higher

performance, transparency and accountability. Resource

allocation and managing diversity and inclusion are also

critical areas requiring careful attention. Our approach

focuses on fostering a culture of growth and inclusivity,

supporting a resilient and effective XPS, and driving

positive change through empowerment initiatives. By

prioritising these areas, together with enhancing employee

engagement, attracting top talent and driving innovation

and growth, we aim to create a thriving work environment

that supports our diverse workforce and aligns with our

strategic objectives.

Engagement approach

It is critical we build trusting relationships with our

people and foster a positive workplace culture. We have

developed an employee voice strategy as well as a portal

for colleagues to leave feedback on any subject at any

time. Meanwhile, our Employee Engagement Group,

which is chaired by Aisling Kennedy, Non-Executive

Director and Chair of the Sustainability Committee, with

representatives from each location, provides feedback

to management and the Board allowing us to address

concerns and ensuring our employees remain engaged

and motivated.

By continuously engaging with our people and valuing

their input, we aim to create a thriving and inclusive

workenvironment that supports our strategic objectives.

Each year, we measure the outcome of our engagement

efforts, such as through our weekly newsletters and

voice notes from our Co-CEOs, townhalls and our

annual employee survey. This year, our annual survey

had an 81%response rate, with an average score of 79%

favourable responses.

While broadly favourable, our employee Net Promoter

Score (eNPS), which assesses how likely our employees

are to recommend XPS as a great place to work, saw a

modest decline after year on year increases. We put this

down to our rapid growth, which has been demanding of

our teams. However, the scores for our diversity, equity

and inclusion demonstrate that we have taken positive

steps forward. Additionally, 89% of colleagues said

“people of all backgrounds can thrive in XPS”, while 91%

said they enjoy working with their teams.

Case study:

Award wins in FY 2025

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

We incentivise employees with bonus schemes, share

plans, competitive remuneration and benefits. We also

recognise outstanding contributions through local

recognition programmes and our Values in Practice (VIPs)

Awards which help us celebrate employees who embody

our values and contribute positively to the organisation.

Additionally, we have a monthly award for colleagues

who excel in delighting our clients. To commemorate XPS

joining the FTSE 250 this year, each employee employed

with the Company as of 31 March 2025 received a £250

gift voucher. This was in recognition of their tremendous

work and effort throughout the year.

Learning and development

Learning and development are crucial for both career

progression and achieving organisational objectives. We

are committed to promoting continuous learning, growth

and inclusivity. Our strategy empowers employees

to excel in their roles and equips them for future

progression through regular training sessions, mentorship

programmes and bespoke learning opportunities.

We offer a range of training programmes, including

leadership development, technical skills, management

development and personal workshops. Employees are

encouraged to set career aspirations and collaborate

with line managers to achieve these goals. In FY 2025,

a mandatory line manager programme was introduced

for new managers and those with less than 12 months’

experience at XPS. 132 colleagues enrolled on the

programme in FY 2025.

Recognising the diverse learning needs of our colleagues,

we invest in initiatives that deliver effective support. This

year, the number of training hours increased significantly

to 34,000 (FY 2024: 28,000), reflecting our focus on

development and wellbeing. Monthly wellbeing hours also

provide time for colleagues to focus on themselves while

learning new skills, with participation steadily increasing.

Besides wellbeing sessions, we prioritise upskilling

through internal and external courses. Our mentoring

programme and various training initiatives, such as

compliance and cyber security, have seen increased

participation, with colleagues benefiting from external

courses offered by partners such as Schroders and the

UK actuarial profession.

We regularly review our strategy to ensure it continues

to sustain a culture of learning that enables professional

excellence and drives business success and colleague

engagement.

In FY 2025, XPS won several prestigious awards in

recognition of its efforts to foster a positive and inclusive

workplace, its innovative work strategies, its supportive

environment and its commitment to diversity, equity and

inclusion.

At the Business Culture Awards, XPS received the

Business Culture Builder Award 2024 and the Working

Environment and Practice 2024 award. These accolades

recognise XPS’s success in building a strong, positive

corporate culture and implementing effective practices

that enhance the working environment for all employees.

The Company’s innovative approach to remote and

hybrid work was also recognised with the Best Remote/

Hybrid Work Strategy 2024 award at the Engage

Awards. This highlights XPS’s ability to adapt to changing

work environments and provide flexible work options that

meet the needs of its employees.

XPS also won the Best DEI Initiative 2024 at the UK

Company Culture Awards for our work on supporting

colleagues through menopause.

Finally, XPS was named the Best Organisation for

Supporting Development at the Professional Pension

Rising Star Awards. This award celebrates XPS’s

commitment to supporting the growth and development

of its employees through various training and

development programmes.

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability continued

Inclusion and diversity

At XPS, we are committed to fostering a vibrant

workplace where differences are recognised as

strengths. We know that a more inclusive company is

stronger and, therefore, we integrate initiatives across

our business ensuring that inclusion and diversity

influence everything we do with clients, colleagues,

communities and partners.

We aim to create a culture of belonging where

employees feel valued and can thrive. We believe this

is essential for our strategic objectives to be met. Our

Inclusion and Diversity strategy, which covers hiring

practices, is designed to ensure our workforce reflects

society at all levels of the business. In FY 2025, XPS

made significant strides in enhancing inclusion and

diversity across the business:

• We revamped our Family Friendly policies to provide

greater support to new parents by doubling the

maternity, adoption and shared parental leave pay

entitlement to six months, full pay and doubling paid

paternity leave to four weeks.

• We improved our recruitment procedures and

workplace adjustments, alongside line manager

training, helping us to move from Level 1 to Level 3 in

the UK government’s Disability Confident Scheme and

earning recognition as a Disability Confident Leader.

• We signed up to the Business in the Community Race

at Work Charter to tackle ethnic disparities in the

workplace and developed a comprehensive action plan

to promote race equality.

• Our Employee Networks continued to support

colleagues’ career ambitions, thereby creating an

empowering environment – in FY 2025, our networks

hosted various events, discussions and activities to

support and connect colleagues.

• We continued to focus on building an inclusive and

open working environment for our LGBTQ+ colleagues

– in FY 2025, we introduced a Trans, Non-Binary and

Intersex policy to provide guidance on the process

of creating an inclusive and supportive environment

for transgender, non-binary and intersex colleagues.

This guidance was developed in collaboration with

colleagues from our LGBTQ+ network and LGBT Great.

• We also completed the LGBT Great’s benchmarking

tool “iiBT” and achieved the silver standard, which

signifies that a company has made significant progress

in its LGBTQ+ diversity, equity and inclusion (DE&I)

strategies.

Disability

(66.45% staff disclosure)

Yes 9.4%

Undisclosed 33.6%

None 57.0%

Disability diversity at XPS

Age distribution

<20 1.1%

21-30 28.0%

31-40 26.7%

41-50 23.8%

51-60 17.1%

61+ 3.4%

Age diversity at XPS

Sexual orientation

(74.5% staff disclosure)

Heterosexual 65.3%

Not provided 25.4%

LG BT+ 4.7%

Prefer not tosay/

Undisclosed 4.6%

Ethnicity

(84.62% staff disclosure)

White 73.1%

Ethnic minority 11.6%

Prefer not tosay/

Undisclosed 15.4%

Sexual diversity at XPS

Ethnic diversity at XPS

Empowering people to thrive continued

Gender diversity at XPS

Males Females

No. % No. %

Board 5 56% 4 44%

Group 971 49% 993 51%

Excludes

NEDs

Partners & Managing Consultants 96 62% 59 38%

Other employees 872 48% 934 52%

Memberships and partnerships

We collaborate with several external initiatives for guidance and direction on various sustainability issues. We are

proud to be members and supporters of many organisations driving change, including those shown above.

See more information about our partners on our website:

www.xpsgroup.com/sustainability/employees/

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Wellbeing

The success of XPS is intrinsically linked to the health and

wellbeing of our employees. As such, we want everyone to

thrive, both inside and outside the work environment. We

prioritise their welfare through an array of programmes and

support services. Our comprehensive approach, informed

by data and emerging environmental issues, encompasses

mental and physical health and financial wellbeing.

Key initiatives for FY 2025 include:

• We provided mental health training for line managers,

equipping them with the knowledge and skills

necessary to support mental health through their roles;

• We trained 25 new mental health allies, bringing the

total to over 60 across the UK, to aid colleagues;

• We amended our flexible working policy, “My XPS,

My Choice”, which empowers employees to exercise

greater control over their working hours and locations,

thereby reducing stress and enhancing work-life

balance – the amendment requires colleagues to

attend the office at least two days a week to address

challenges, such as the erosion of office community

feeling and attrition rates among new joiners;

• We revamped office spaces with breakout areas, meeting

rooms, better collaboration technology, wellbeing areas,

prayer rooms and improved kitchen facilities;

• We offer the option to purchase additional holidays to

prevent burnout, and we introduced the ability to flex

bank holidays;

• Based on colleague feedback, we introduced Carers

and Foster policies at XPS, incorporating mental health

support and flexible working options; and

• We expanded the Health and Menopause Network

to encompass reproductive health, including male

reproductive health. We are proud to be a menopause-

accredited company, actively challenging the stigma

around menopause and promoting awareness – the

network offers peer support and resources to help

colleagues navigate hormonal changes and understand

their impacts.

Looking ahead

By continuously engaging our people and valuing their

input, we aim to create a thriving and inclusive work

environment that supports our strategic objectives.

ForFY 2026 we will be focusing on:

• Updating our employer brand so that XPS can enhance

employee engagement, attract top talent and drive

innovation and growth;

• Promoting gender equality through setting targets and

supporting career progression;

• Continuing to implement the Race at Work Charter

action plan; and

• Developing the L&D strategy with training for a

dynamic environment and encouraging employees

toset and achieve career goals with their managers.

Charlotte West

Head of Employee Engagement

XPS Pensions Group plc Annual Report and Accounts 2025

The amazing volunteering efforts of our

colleagues have not only strengthened

our communities but also enriched our

corporate culture. Together, we are

making a tangible difference, one act

of kindness at a time. As we look to the

year ahead, we are excited to grow our

community engagement programme

even further, expanding our reach and

impact. Our commitment to community

investment is unwavering.”

Strengthening our communities

Our commitment to sustainability in the community is driven by our

vision of “shaping a better future”. We recognise the importance of

continuous improvement and innovation in our methods of community

support and this year we have implemented a co-ordinated and active

approach to strengthen our communities, which has also helped

support our talent pipeline.

There are many risks impacting communities, primarily

cost of living, but also social cohesion and regional

disparities. Our colleagues and their families rely on their

communities. XPS, therefore, feels a responsibility to

support communities facing these challenges.

Through our community engagement programme, we

work with a range of partners, leveraging our skills and

scale to help create a more inclusive and sustainable

society. Our investment in communities takes many

forms, including direct community donations, colleague

volunteering and matched fundraising.

Volunteering

At XPS, we prioritise “doing the right thing” and

supporting our local communities. Our Corporate

Volunteering Policy allows full-time and part-time

employees one day of paid leave for volunteering each

financial year.

We encourage our employees to leverage their skills in

Company-organised community engagement activities.

In FY 2025, employees volunteered 660 hours (FY 2024:

211 hours). Examples of volunteering activities undertaken

include career and job coaching, where employees use

their expertise to help individuals develop skills and find

employment. Environmental sustainability initiatives saw

volunteers participate in tree planting, beach clean-ups

and recycling drives, demonstrating our commitment to

preserving the environment. Additionally, employees have

been involved in assisting the homeless, providing meals

and supporting services through various local shelters

and organisations.

Community funding

In support of our mission of “shaping a better future”,

this year we introduced our Community Giving Policy

through which each XPS location can allocate an amount

of money to UK-registered charities chosen by local

colleagues. This initiative empowers employees to engage

with their local communities and contribute to causes

they are passionate about, fostering a sense of ownership

and pride in their philanthropic efforts.

The Community Giving Policy complements our existing

Matched Funding Policy, reinforcing our commitment to

social responsibility and creating positive change.

£79k

donated to community organisations

charities supported

660

volunteering hours

Sustainability continued

Strategic report

XPS Pensions Group plc Annual Report and Accounts 2025

Fundraising

We take great pride in the fundraising achievements

of our employees throughout the UK through various

activities such as bake sales and endurance challenges.

Employees can apply for matching funds raised for

registered charities in the UK. This year, the total amount

raised was £79k (FY 2024: £67K), supporting both local

and national charities.

Our employees have shown remarkable creativity

and commitment in their fundraising endeavours. For

instance, colleagues constructed sandcastles in the

Thistle Centre for Strathcarron Hospice, two colleagues

participated in a fire walk for “Held in Our Hearts” and

the Movember campaign raised over £5,000 to support

men’s health initiatives, focusing on prostate cancer,

testicular cancer, mental health and suicide prevention.

Supply chain

Our approach to supply chain engagement is centred

around responsible and sustainable practices. We

actively manage our supply chain to mitigate risks and

reduce our environmental footprint by implementing

stringent standards and policies. Our Supplier Code of

Conduct outlines the high standards and behaviours

we expect from our suppliers, including safe working

conditions, fair and respectful treatment of employees

and adherence to environmental and ethical practices.

This year, we updated our Supplier Code of Conduct

to include provisions on modern slavery, environmental

sustainability, and diversity, equity and inclusion. By

having strong relationships with our suppliers and

ensuring compliance with our code, we aim to create a

more resilient and sustainable supply chain.

Looking ahead

Our commitment to supporting local communities is

driven by the belief that together, we can shape a better

future. By harnessing the enthusiasm and creativity of

our employees, we aim to make a meaningful difference

and inspire others to do the same. In FY 2026 we will be

focusing on:

• Continuing to strengthen our community approach;

• Encouraging employees to use their skills for

community engagement; and

• Reviewing our procurement with an inclusive lens.

Case study:

Empowering

the future: XPS

partners with

Future Frontiers

to mentor

disadvantaged

students

We partnered with Future Frontiers, an award-winning

education charity that connects young people from

disadvantaged backgrounds to professionals from

various organisations. This involved employees mentoring

students from disadvantaged backgrounds, allowing

us to engage with young people and embrace different

perspectives.

We have long welcomed graduates, apprentices

and school leavers at XPS, guiding them to become

fully qualified professionals. Supporting younger

students through Future Frontiers fits well with

our culture and goals and aligns with our culture

ofdevelopingyoung people.

XPS Pensions Group plc Annual Report and Accounts 2025

Supporting our clients and members

Stewardship is an important aspect of protecting and developing

long-term partnerships with clients. We support all clients with

responsible investing and integrating sustainability into the services

we provide. Over the year, we have made progress in incorporating

sustainability further into our range of services.

Sustainability continued

Integrating sustainability into

investment decision making is integral

to risk management and long-term value

creation. We continue to keep clients

informed with detailed information

about the ever-changing landscape

to allow them to factor sustainability

into the management of their

pensionschemes.”

184

investment funds across 43 investment managers

reviewed

Sustainable funds and 4 Impact funds available

clients in Sustainable funds representing £3.2billion

XPS is committed to integrating environmental, social

and governance factors into all aspects of its investment

research and advisory services. Our culture and values

help us promote sustainable services for our clients. We

also focus on keeping all our clients’ money safe from

scams and fraud.

Helping clients navigate sustainability

Sustainability and climate considerations are integral to

the advice XPS provides to investors and are embedded

into the recommendations we make for the £101 billion

assets under advisement.

XPS is committed to educating clients on sustainability

and has provided client-tailored training throughout the

year. In August 2024, we hosted a free webinar for all

our clients to provide an update on latest regulations

in relation to ESG, setting net zero targets and climate

scenario modelling.

We make it easy for clients to understand their exposure

to ESG risk and alignment to the climate transition. As part

of our sustainability reporting, we include exposure to “sin

industries” (such as tobacco), climate transition alignment

and engagement on sustainability across client portfolios

as well as carbon emissions reporting. We continue

to partner with a market-leading climate change data

provider so that we can provide enhanced reporting and

analysis of climate change risks. We used this to support

certain clients with their regulatory climate change

reporting requirements, aligned with the Task Force on

Climate-related Financial Disclosures (TCFD) framework.

During the year, XPS carried out its fifth annual

sustainability ratings exercise, which involved reviewing

184 investment funds across 43 investment managers.

Following the exercise, XPS provided tailored feedback

to every fund manager on their ESG rating to highlight

strengths and areas for improvement. We also held

follow-up face-to-face meetings with those managers

who received a red rating, as well as many others, to

discuss areas for improvement, thereby contributing to

raising the bar for ESG in the industry.

Alex Quant

Head of ESG Research –

Investment

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

16,000

members’ transfers protected

£2.5bn

protected

Driving sustainable investment

For those clients looking to address sustainability

through their investments more explicitly, we operate our

proprietary Sustainable and Impact labels for investment

funds. We continue to add funds to our Sustainable and

Impact Designation buy-list. We now have 43 Sustainable

funds across all asset classes (FY 2024: 39) and 4 Impact

funds (FY 2024: 3) to help our clients meet their financial

objectives while targeting long-term social and

environmental outcomes.

At the end of FY 2025, XPS had 40 clients in Sustainable

funds representing £3.2 billion (FY 2024: 36 clients,

£2.6billion) in assets under advisement.

Creating a sustainable pensions industry

In FY 2025, XPS submitted its first progress report

against the Principles of the Net Zero Investment

Consultant Initiative. The report detailed XPS’s progress

across the initiative’s nine action areas and the work we

have done in integrating net zero into our investment

advisory services and asa business.

XPS also retained its status as a signatory of the UK

Stewardship Code, having been successful at the first

time of asking in 2021. XPS contributed to a number

of public consultations relating to sustainability issues,

including the consultation on anti-greenwashing

rules, the Mansion House consultation on UK Green

Taxonomy and the FRC consultation on the updated

UKStewardship Code.

Keeping members safe

XPS remains focused on keeping the members of

the pension schemes we administer safe. Our Scam

Protection Service continues to support trustees and

members by identifying and managing suspicious

activity in relation to transfers. In particular, XPS’s Scam

Protection team uses phone calls with scheme members

to obtain robust information about their transfer and uses

this to identify any suspicious activity. In addition, XPS

is an advisory member of the Pension Scams Industry

Board. Our service goes beyond what is required in the

regulations and we continually look out for trends in

behaviour to help spot warning signs of new potential

scams. To date, XPS’s Scam Protection Service has

helped protect over 16,000 members’ transfers, totalling

over £2.5 billion (up from 10,000 and £2.0 billion

last year).

To minimise social engineering threats, XPS rolled out

Abnormal Email Security, which uses AI and behaviour

analysis to detect malicious emails. In FY 2025, all our

colleagues undertook mandatory training on protecting

client, employee and corporate information, including

regular phishing awareness exercises. Our Information

Security Management System (ISMS) was certified to

ISO 27001 in FY 2022 and the effective deployment of

our ISMS is independently verified through our Cyber

Essentials Plus certification and BitSight risk scoring.

We recognise that many pension members may have

one or more vulnerabilities, and that we must take care

to listen to their needs and identify when we should

apply an extra duty of care. Our Dealing with Vulnerable

Customers Policy provides guidance to all employees

about vulnerabilities members may experience, barriers

they may face when dealing with professional service

providers and what we can do to make our services as

accessible and inclusive as possible. Wherever possible,

we will adapt to members’ specific needs.

Looking ahead

For FY 2026, XPS will continue to integrate sustainability

into the advice and services it provides to all its clients.

Our focus is:

• To proactively encourage clients to invest sustainably; and

• To adopt strategies which support the global direction

of travel towards net zero.

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability continued

Being a responsible business

Good governance structures and processes drive the right behaviours

to deliver value for XPS’s stakeholders. Behaving ethically, therefore,

supports our corporate purpose and strategy. It is a foundational

part of our sustainability framework: our values and culture are

fundamental to our continued success.

We can only achieve ‘shaping a

better future’ with a culture of strong

governance that minimises risk, upholds

high standards and complies with all

legal standards. Being a responsible

business is key to the success of our

mission and strategy.”

100%

compliance training rate in FY 2025

Transparent disclosures on the Board

XPS upholds high standards of corporate governance.

Our Board composition and structures – as well as our

other governance processes – comply with the UK

Corporate Governance Code (the “Code”). One of the

cornerstones of the Code is transparency with regard to

the Board and executive management.

More information on the governance and composition disclosures

of our Board is on pages 63 to 67

XPS discloses on pages 76 to 99 a range of information

relating to executive management, including

remuneration and how sustainability is incorporated

into bonus objectives and share incentive award vesting

criteria. The slight restatement of historic carbon

emissions in light of the net zero assessment by the

SBTi has not had a material impact on the sustainability

consideration of executive remuneration.

A culture of compliance in action

XPS’s compliance environment consists of its policies

andprocedures, underpinned by its values and culture.

This ensures that everyone at XPS upholds high

standards of corporate governance and collectively acts

as a responsible business. The behaviours XPS expects

from our people are codified in the Business Code of

Ethics as well as a range of other policies covering

treating customers fairly, diversity and inclusion, fraud,

modern slavery and dealing with vulnerable customers.

XPS has zero tolerance for behaviours that are not in

line with this set of expectations. In FY 2025, all our

employees were required to complete ethics, modern

slavery and anti-bribery training. The completion rate for

such training was 100% (FY 2024: 100%).

In FY 2025, XPS continued to emphasise the expectations

it has of its business partners and suppliers to behave

in line with its Supplier Code of Conduct. Doing

business with XPS means adhering to this code and our

onboarding process ensures that all our suppliers do so.

Our requirements around modern slavery, anti-bribery

and financial fraud are also communicated through

this process. Our annual Modern Slavery Statement is

available on our website.

Sarah Rixon

Group Company Secretary

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

88%

of offices supplied with renewable energy as at 31March 2025

the number of ISO 14001 certificated offices

75%

of all XPS lighting is low energy

Protecting our environment

XPS strives to meet the needs of its business and its people today,

without compromising the ability of future generations to do the same.

XPSis committed to delivering a sustainable and environmentally

conscious operation that reduces its environmental footprint and, where

possible, contributes positively to the environment and natural world.

Environment and climate governance

TCFD governance (A & B)

The Board has ultimate responsibility for both risk

management and sustainability within the Group

including those risks and opportunities relating to the

environment and climate change. This responsibility is

embedded into the Group’s pre-existing governance

structure and ensures climate and wider environmental

considerations are included when reviewing and guiding

strategy, business plans, acquisitions and major plans of

action. Environment and climate change governance is

discharged through a number of Board Committees. The

Board Committees provide guidance, information and

data-driven reporting to the Board, maintaining oversight

over climate-related risk and opportunity treatment

and identification within the business. The Nomination

Committee supports the Board by ensuring the Board

and its subcommittees are appropriately skilled and

knowledgeable to carry out their activities.

Together, the Board and its subcommittees monitor

and oversee progress to relevant goals and targets

within the business, supporting informed, effective and

appropriate leadership decisions. The Board uses the

data, information and reports to influence the Group’s

strategy and internal policy decisions.

Please see Monitoring and advocating progress on page

41 to 43 for further detail on metrics, goals and targets

and how they are monitored within XPS Group.

Effective climate risk management

TCFD governance (B), TCFD risk management

(A, B & C)

The relevant accountable senior management is responsible

for the implementation of climate and environmental policies

within the business which is overseen by the Board-level Risk

Management Committee. Assurance of the management

system is established via the internal audit and external

certification programmes. The output of these is integrated

within the Risk Management Framework and reported to the

appropriate Board Committees (see page 36).

Climate and environmental risks are integrated within the

Risk Management Framework. This includes alignment of

terminology methodologies (identification, assessment

and treatment) and priority assignment along with any

action plans. The XPS Risk Management Framework

is fully articulated in the Principal Risks section of this

report (page 52 to 58).

The XPS Environmental Management System (EMS) provides

the framework to assess climate risks in accordance with

the Group’s Risk Framework. The EMS is certified to the

internationally recognised ISO 14001:2015 standard, providing

a repeatable, consistent mechanism to identify and assess

climate and environment-related risks and opportunities.

Identification exercises occur at least annually to maintain

a comprehensive climate and environment risk and impact

monitored against a number of predetermined materiality

indicators and thresholds (including the impact on XPS

financials) to determine the risk size, scope and priority. The

appetite, timescale and type of treatment are dictated by the

Risk Management Framework and associated Group policies.

Treatment may include mitigation, transference, acceptance

or rejection. Climate risks are managed and reported to

relevant Board Committees as part of the Group’s risk

governance structure (see Principle Risks section pages

52 to 58).

We made significant progress on our net

zero roadmap in FY 2025. I am really

proud that we are now using renewable

energy for 88% of our offices, which has

helped us deliver a significant carbon

reduction.”

Matt Wellbelove

Environmental System Manager

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability continued

Protecting our environment continued

Responsible for overarching strategy and accountable for sustainability performance

The Risk Management Committee monitors the implementation of the XPS Risk Management Framework in which

climate and the environment are fully embedded.

See Risk Management pages 52 to 58

Board of Directors

Risk Management Committee

Climate-related governance structure

Risk Management Framework and Control Environment

Environmental Steering Committee

Environmental Management System

Climate

performance

metrics

Climate risk

management

Climate

opportunities

Assurance

programme

Compliance

programme

Sustainability Committee

The Committee convenes quarterly

and provides independent

oversight of the Group’s

sustainability programme and

is responsible for defining the

XPS sustainability framework,

overseeing its implementation and

monitoring progress which includes

the assessment of environment

and climate-related risk, corrective

actions, opportunity, strategy and

performance based upon metrics

and targets.

See Sustainability Committee pages

74 and 75

Audit & Risk Committee

The Committee monitors the

effectiveness of internal controls,

risk management and compliance

activities including those relating

to climate and the environment.

The Committee convenes at least

three times per annum.

See Audit & Risk Committee

pages 71 to 73

Remuneration Committee

The Committee defines

how climate change and the

environment are embedded into

XPS executive remuneration,

ensuring fair and appropriate

reward. The Committee convenes

at least three times per year.

See Remuneration Committee

pages 76 to 99

Effective climate risk management continued

TCFD governance (B), TCFD risk management (A,B & C) continued

XPS ensures its environmental risk register includes all the risks outlined in the TCFD’s Table A1.1 as a minimum, as well

as ensuring appropriate elements of the TCFD’s Table A1.2 are sufficiently assessed.

The Group’s EMS applies to all XPS facilities. XPS has chosen to certify this management system to ISO14001

certification in 7 locations. The Group has set a target to ensure that all offices obtain official certification by the end

of FY 2026, with the exception of those offices that XPS does not plan to occupy beyond that period.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Climate and environment time horizons

TCFD risk strategy (A)

Short term

The next 5 years Well-understood risks and opportunities that are

likely to materialise with a low-risk impact on key

business, property and asset decisions.

Medium term

The next 5–10 years Moderate uncertainty around transitional operating

environment with a growing impact on key

business, property and asset decisions.

Long term

Beyond the next 10 years Great level of uncertainty with a potentially

materialimpact on key business, property and

asset decisions.

The XPS environmental risk landscape

XPS climate risk horizons, TCFD strategy (A, B & C)

XPS is a UK-based professional services provider with no overseas operations. The climate impact to the value of the

Group’s asset base is considered low risk and immaterial. XPS has aligned the environmental and climate time horizons

to those of the Science Based Targets initiative (SBTi) to which the Group is committed. XPS considers these time

horizons to be an effective reflection of XPS transitional milestones, associated risks and general uncertainty within

the topic, including the likely materialisation of risks on assets and infrastructure.

As with all businesses, XPS operations will evolve with time to best reflect the environment and market in which the

Group operates to continue create value effectively. XPS recognises that there is scientific and economic uncertainty

regarding climate change. XPS Group anticipates that its current strategy and approach will remain fundamentally

stable, effective and able to create value with minor adjustments to be reasonably anticipated. This includes operating

within a scenario consistent with achieving a low-carbon economic operation, limiting warming to 2°C or under.

Non-climate-related environmental risks to the Group are well documented via the Group’s Environmental

Management System. The risk XPS poses to the environment and the environment poses to XPS remains low and is

assessed as financially immaterial and stable in all time horizons.

XPS utilises its environmental risk management process alongside scenario analysis to identify climate-related risks

and impacts to the business. XPS has considered the impacts recommended as part of the TCFD 2021 Implementation

Guidance for Strategy recommendation C as part of this process.

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability continued

Protecting our environment continued

Potential impact of climate-related risks and opportunities

TCFD strategy (A, B & C)

The following information reflects the potential impact of climate-related risk on the Group. XPS does not anticipate

climate change materially impacting the financial position of the Group.

Climate-related

risk Time horizons Impact TCFD risk strategy (A)

Adaptation

and

mitigation

activities

including

operations

and

locations of

facilities

S M L

Risk:

Potentially adverse impacts may include low-carbon product capacity and

availability, market volatility, taxation, regulation, business cost and asset isolation.

Likely to materialise incrementally across time horizons.

XPS response and forecast:

By actively transitioning the Group’s business activities to a science-based low-

carbon operation, XPS shall mitigate the most significant exposure in relation to

this risk. XPS has budgeted for reasonably anticipated costs in relation to this whilst

acknowledging that uncertainty remains surrounding transitional costs, particularly

in relation to carbon taxation, technology and residual emissions removal. The XPS

Transition Plan has been formulated to reduce reliance on unknown technology as

much as possible to minimise any exposure in this area. The Group considers that its

Transition Plan is likely to be refined in response to these conditions but is unlikely

to reflect a financially or operationally material impact on the Group or the forecast

mitigation and adaptation budget.

XPS anticipates increased regulation and disclosure but does not consider these to

reflect a material impact to the business.

XPS property-based commitments may require relocation in some instances in

the short to medium term in advance of the Group’s 2035 objectives; however,

this is not anticipated to pose a material operational or capital risk to the Group.

Any incremental cash outflows for moving locations are factored into the financial

budget. Any risk of relocation will be dispersed across the time period and is not

anticipated to impact capital in excess of 5% of revenue in the time horizon.

Capital requirements and market signals are monitored and considered as part of

the Group’s ongoing strategy and budgeting.

Supply chain

and/or value

chain

S M L

Risk/opportunity:

A failure of a third party which XPS is dependent on may result in XPS being unable

to deliver its own commitments or service presenting potential issues, particularly

within compliance and taxation. Most likely to materialise in the long term, failures

may include those relating to infrastructure (e.g. decarbonisation of the national

grid), capacity (e.g. limited suppliers offering relevant products) or product viability

(e.g. net zero compliant products do not exist or are not fit for XPS’s purpose).

By selecting complementary low-carbon suppliers in the short to medium-term horizon

XPS can significantly accelerate its net zero objective, potentially reducing long-term cost.

XPS response and forecast:

The Group’s supplier management process monitors and assesses the activities and

risk of its supply chain. This enables the business to monitor the carbon performance

of its value chain and identify key risk areas. The output is monitored as part of the

EMS and reported to the Board which informs value chain-related policy and selection.

XPS has observed a voluntary transition of its value chain to low-carbon compliance,

particularly within its tier 1 suppliers. The Group considers future “green” supplier

capacity to be low risk.

By transitioning to a low-carbon supply chain in advance of the Group’s net zero

objectives the Group can reduce carbon-related costs (offsetting) and potential

taxation whilst capitalising on potential efficiencies and low-energy cost savings

within the XPS value chain, reducing the impact to capital and cash outflow.

The Board is informed of third-party-related risks and considers these as part of

the supplier selection and business strategy. XPS does not anticipate the residually

managed risk to be material to the XPS financial position or expenditure, positively

or negatively.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Climate-related

risk Time horizons Impact TCFD risk strategy (A)

Products

and services

S M L

Risk/opportunity:

Client, investor and consumer preferences may be influenced by a company’s net

zero and sustainability profile, potentially influencing the organisation’s access to

these groups and prospects, likely to materialise incrementally across time horizons.

XPS response and forecast:

XPS considers consumer, client and investor preferences to be both a risk and an

opportunity. If well managed, XPS can take advantage of a growing demand for

“sustainable” products and potentially increase its revenue streams by operating in a

complementary fashion alongside a sustainable product offering. Conversely, failing

to sufficiently reflect sustainability within the Group’s activities or products may

deter potential clients and investors.

XPS anticipates that this occurrence is likely to materialise. The Group’s business

and product strategy is well aligned to capitalise on the opportunities provided,

simultaneously mitigating the related risks. The revenue impact is considered to be

immaterial as sustainable products are likely to reflect the norm within the market

with no significant unfavourable cost impact. The Board continues to be informed of

revenue streams and market expectations, steering product strategy accordingly.

Market and

product

volatility

(not relating

to previously

listed)

M L

Risk/opportunity:

In the worst case scenarios GDP is anticipated to fall, significantly constricting the

economy and reducing market access to capital. This may reduce prospect liquidity

in the marketplace, reducing the opportunities available to XPS and its revenue

streams. The impact of this risk is likely to affect the long-term horizon, particularly

post-2050.

XPS response and forecast:

Pensions products offered by XPS are required by statute and, therefore, somewhat

resilient to recessionary pressures. Fluctuations in market liquidity present both

challenges and prospects for the business. Access to capital within markets may be

reduced; however, XPS does not anticipate the impact preventing the Group from

creating value.

The XPS strategy is to continue to diversify its client base and product offering to

best protect its revenue streams. By maintaining operational and financial resilience

XPS is well positioned within its competitive landscape to capitalise on opportunities

and any available market capacity and, where appropriate, make strategic

acquisitions.

The risk is not anticipated to materially impact XPS Group’s ability to generate value.

The Board monitors revenue streams and market conditions and indicators as an

input into decision making, strategy and capital planning.

Climate-

weather

events

Risk/opportunity:

An increase in global extreme weather events causes damage to assets and

interrupts supply and demand chains.

XPS response and forecast:

The UK, and by virtue XPS, is not expected to be subject to the worst impacts of

climate change. There is a risk that supply chains are interrupted impacting business

continuity and potentially resulting in price instability. Likely disruption to the XPS

supply chain is not anticipated to materially impact XPS’s ability to provide services

or create value. In extreme weather events, supplier activities are monitored by the

Board as part of the supplier management process and overarching strategy.

The risks identified by the Group are anticipated to be consistent across the Company’s operational and geographical

operations. XPS does not consider access to capital likely to be a material risk in relation to climate change. Potential

acquisitions and investments are assessed to ensure alignment with the Group’s appetite, strategy and objectives, such

as Polaris which was acquired in February 2025.

The business commits to budgeting finances appropriately as required.

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability continued

Protecting our environment continued

XPS scenario resilience

TCFD strategy (B & C)

XPS utilises scenario analysis and modelling to understand

how a number of distinct scenarios may adjust the risks

and opportunity profile of the Group and how those

elements may materialise differently in varying scenario

iterations. Further, the analysis takes steps to identify

howXPS’s own strategy may interact with risks and

present opportunities across time horizons upuntil 2080

which the Board utilises to inform key business decisions.

The XPS Group’s scenario analysis modelled four scenarios

developed by the Network for Greening the Financial

System (NGFS) which the Group considers to be the most

likely to occur given the current economic, political and

scientific position. This includes orderly transitions limiting

warming to 1.5 and 2 degrees respectively, a disorderly

delayed transition limiting warming to 1.5 degrees and

a “hot house world”, reflecting a warming greater than

3 degrees. XPS has adopted the associated NGFS

assumptions regarding policy, technology, carbon removal

and variation in each scenario.

The XPS scenario analysis considers a multitude of impacts

in each scenario including changes in regulation, market

conditions and asset status, assessing the magnitude of

each impact individually across seven key operational

areas (including business continuity, access to capital,

profit and products and services). The likelihood of the

impact materialising is further assessed in each decade

to 2080. Each scenario is modelled in at least two distinct

interactions culminating in 400 data points per scenario

facilitating greater data granularity and sensitivity. The Risk

Management Framework’s risk terminology, likelihood and

assessment criteria is applied to all scenario calculations

resulting in a largely qualitative assessment. This allows

XPS to plot and understand high-level risk materiality

and exposure across time horizons. The Board uses this

information as an input to understand the potential long-

term impact of business decisions.

The XPS scenario assessment indicates that a smooth

and orderly transition that limits warming to 2°C may

offer XPS the most favourable operating environment up

until 2080. XPS anticipates operating resiliently within

this scenario with immaterial adverse impact to revenue,

transitional cost and activities, operational conditions,

asset status or product offering. The risk to the Group

within this scenario has been assessed to be low. The same

analysis indicates that a failed transition is likely to present

the least favourable operating conditions up until 2080.

XPS recognises the impact to the global markets may

be significant and largely unpredictable in this instance.

Pensions are inherently stable and the product is robust

to withstand changes in the scenarios. It is unlikely that

a material change in either value creation or cost to XPS

shall occur.

XPS expects to maintain its sustainable strategy in all

scenarios identified and modelled, including a failed

transition. XPS considers the business to be resilient to

the plausible physical risks of climate change, rating the

impact as financially immaterial in each scenario. The

transitional risk to the Group is considered to be low but

emerging and monitored as a key input in all scenarios.

Scenario analysis corridor graph

Scenario Temperature alignment

Rapid transition Under 1.5 degrees

Smooth transition Under 2 degrees

Delayed transition Between 1.7 and 2.5 degrees

Failed transition Over 3 degrees

2020 2030 2040 2050 2060 2070 2080

Risk materiality

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Monitoring and advocating progress

TCFD metrics and targets (A & C)

Climate as an input

By delivering the XPS Sustainability Strategy, XPS

can better manage related risks and capitalise on

opportunities. This is facilitated by effectively embedding

climate as an input to business decisions, policies and

activities. Relevant senior business leaders provide the

Board with appropriate operational metrics, inputs and

data points (as per the reporting structure detailed on

page 36), which provide the Board with oversight of the

Group’s granular performance, informing strategic and

operational decisions.

Key climate metrics, performance indicators and inputs

that are provided to the Board include the following,

which XPS considers as the most valuable measures of

the Group’s climate risk and performance:

• Carbon emissions in both absolute and intensity-based

ratios, calculated and reported both in an aggregate

and disaggregate fashion which includes the following

key sub performance indicators:

• Renewable energy proportion and deployment across

the Group.

• The Group’s kWh consumption which includes the

delivery of the Group’s low-energy lighting objective.

• The Group’s certification status.

• Sustainable product selection within the Group’s

investment products.

• Compliance and instances of environmental and/or

climate breaches.

XPS has not implemented an internal carbon price but

the business continues to monitor the implementation in

the industry.

10% of each annual executive award is tied directly to the

Group’s Scope 1 and Scope 2 performance. This award is

in place for the three-year period to the end of FY 2026

where it will be reviewed.

Creating community value

In FY 2025 XPS supported two global projects that

promote the Group’s overarching environmental and

sustainable development values. The projects, based

in Panama and Rwanda respectively, provide tangible

environmental and climate benefits alongside positive

social and economic outcomes for local communities.

XPS supported the projects with the acquisition and

retirement of carbon credits, verified by Gold Standard.

Business carbon performance update – decoupling

our growth and environmental impact

Significant progress has been made by the Group in the

FY–2025 financial year including driving the Group’s

Scope 1 and 2 revenue and FTE intensities down by

35% and 31% respectively year on year. This achieves

an absolute reduction of more than 60% to the Group’s

restated FY–2020 base year. The Group considers

that this is on track to achieve its 100% renewable

energy objective by 2030. As of 31 March 2025, 88% of

XPS facilities (13 out of 16) are supplied with certified

renewable energy representing 69% of the Group’s

square footage and 79% of all kWh consumed within

our premises during the FY–2025 year. Additionally, to

reduce on site energy consumption, XPS has developed a

number of strategies including an objective to transition

the entire lighting stock within the Group to LED or

low-energy alternatives by December 2026 which is

supported by a formal action plan, as part of the Group’s

ongoing ESOS programme. XPS has made significant

progress on this objective to date, transitioning over 75%

of the Group’s lighting to low-energy alternatives as at

31March 2025.

Overall revenue intensity for all disclosed emissions also

fell by 4% year on year and 51% in comparison to the

restated FY–2020 base year. Within Scope 3 emissions

XPS has observed an anticipated increase in commuting

emissions as a result of a change in employee commuting

habits and an increase in full-time equivalent (FTE)

employees. This has been reflected in a small year on year

FTE intensity increase for all disclosed Scope 1, 2 and 3

emissions of 2%.

This data is encouraging in relation to the Group’s net

zero objective, demonstrating that XPS is successfully

decoupling carbon emissions and business growth. XPS

remains confident that it is able to further disconnect

its growth from carbon emissions and drive its absolute

volume of emissions down by activating internal levers

and implementing further policy within the business.

Further details on the Group’s carbon reporting and SECR

disclosure can be found on page 43

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability continued

Protecting our environment continued

Monitoring and advocating progress

continued

TCFD metrics and targets (A & C) continued

The XPS Transition Plan

XPS has pledged to reduce its emissions to a level

consistent with the global ambition of limiting warming

to a maximum of 1.5 degrees. The Group has formally

committed to the Science Based Targets initiative (SBTi).

The XPS carbon inventory is prepared in accordance with

the GHG Protocol, SECR and SBTi requirements and has

been informally validated by external expert consultancy.

XPS expects that the SBTi shall verify its near-term

science-based targets (up to and including 2035)

in FY 2025. The XPS Transition Plan is pending

approval until verified. The current Transition Plan has

established objectives across its carbon inventory

that, in combination, achieve operations in accordance

with a science-based net zero as defined by the

Intergovernmental Panel on Climate Change (IPCC).

In the short term XPS is focused on reducing its direct

facility-related electricity emissions by 100% by 2030,

sourcing 100% renewable energy. XPS targets a 100%

gas heating-related emission reduction by 2035 with

proactive property selection and development.

In the long term XPS will adopt a strategy to reduce

indirect emissions where available, influencing internal

culture and habits. Due to the nature of indirect emissions

the Group will be reliant on UK infrastructure and

suppliers delivering upon their own ambitions. A focused

approach to supplier and product selection will support

the Group’s related objectives in this area.

XPS currently forecasts a reduction of more than 90% of

its absolute baseline emissions by 2050 with the residual

absolute emissions expected to be removed or captured.

This will achieve the IPCC and SBTi definition of net

zero. The cost and effectiveness of carbon sequestration

remain to be seen and are managed as a risk to the

business as discussed within the XPS Environmental

RiskLandscape section on page 37.

Restating historic performance data

Making meaningful comparisons of emissions data over

time is an integral part of any corporate net zero journey

that aims to be credible, transparent and valuable to

stakeholders. XPS selected FY 2020 as its base year

for carbon-related calculations as it represented the

first typical year with reasonable extrapolatable data.

XPS carbon maturity and capacity have significantly

developed in the intervening period between disclosures

alongside our understanding of our operations. Whilst

XPS’s historic disclosures remain compliant, XPS is now

in a position to provide carbon-related emission data that

presents a more complete and accurate representation of

the Group’s true emissions. This includes the adjustment

of emissions to reflect a greater level of accuracy,

reliability and better data alignment for comparability.

XPS acknowledges that the scientific approach to carbon

accounting will continue to develop and it is highly likely

further restatements will occur in the future as accuracy

and access to information continue to develop.

XPS intends to publish further voluntary Scope 3

emissions post-verification of the Group’s SBTi objectives.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

SECR carbon disclosure

TCFD metrics and targets (B)

Emission source FY 2025 FY 2024 FY 2023 FY 2022 FY 2021 FY 2020

Scope 1 198.26 208.20 243.59 236.24 236.01 232.35

Direct combustion kWh 1,078,243.12 1,111,287.95 1,327,752.01 1,283,082.43 1,278,690.63 1,259,409.94

Direct combustion tCO

e 197.21 203.29 242.37 235.01 235.11 231.54

Fugitive emissions tCO

e 1.05 4.91 1.22 1.23 0.89 0.81

Scope 2

45.47 116.22 184.64 435.53 347.45 442.15

Imported energy kWh 1,283,785.71 1,434,334.74 1,648,044.08 2,136,977.5 4 2,016,420.74 1,980,755.23

Imported energy location based

tCO

e 265.81 297.01 318.70 453.74 470.11 506.28

Imported energy market based

tCO

e 45.47 116.22 184.64 435.53 347.45 442.15

Scope 3

1,445.38 1,184.66 1,177.99 962.44 863.43 1,085.02

Category 3: business travel tCO

e 294.42 199.86 162.29 62.24 21.35 245.34

Category 7: employee commuting

tCO

e 434.84 266.39 358.68 194.20 63.57 801.60

Category 7: remote working tCO

e 716.12 718.41 657.03 705.99 778.50 38.08

Carbon intensity ratios

Revenue intensity – Scope 1 & 2

(tCO

e/£m)

1.05 1.63 2.57 4.83 4.56 5.62

Revenue intensity – Scope 1, 2 & 3

(tCO

e/£m)

2, 3

7.29 7. 58 9.64 11.76 11.30 14.66

FTE intensity – Scope 1 & 2

(tCO

e/FTE)

0.13 0.19 0.27 0.47 0.44 0.56

FTE intensity – Scope 1, 2 & 3

(tCO

e/FTE)

2, 3

0.90 0.88 1.02 1.13 1.09 1.46

1 Imported energy-related emissions are calculated in accordance with both the market-based and location-based methodologies in

accordance with the GHG Protocol and SECR guidance.

2 Scope 3 greenhouse gas emission disclosure is voluntary. XPS currently discloses Category 3 and Category 7 emissions as part of the

Group’s voluntary disclosure. The Group currently does not disclose other Scope 3 categories.

3 Scope 2 emissions within this calculation reflect market-based energy emissions.

These emissions are being restated as part of the Group’s ongoing continual improvement programme. (See page 42)

All activities are UK based. tCO

e = tonnes of CO

equivalent. All conversion to carbon is based on current Department

for Energy Security and Net Zero (DESNZ). Calculations are made in accordance with the SECR guidance and the

GHG Protocol. FTE = full-time employees as at 31 March 2025. Scope 1 and 2 emissions include all sources as required

by SECR guidance. Scope 3 emissions include all emissions relating to XPS business travel, commuting of XPS staff to

their place of work and remote working-related energy consumption of XPS staff.

Looking ahead

In FY 2026 XPS anticipates certifying seven additional sites within the official ISO 14001 scope and having its medium-

term net zero objectives (up to and including 2035) approved by SBTi, communicating the Group’s environmental and

climate effectiveness for today and for the future.

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability continued

Protecting our environment continued

Climate and environmental risk TCFD statement

The Group considers its operations to be well equipped, prepared and resilient to deal with the emerging risk of

climate change. XPS considers the risk to be emerging as the true impact cannot currently be fully economically or

financially understood or quantified at this time. The business continues to recognise the need to manage its climate

and environmental risk responsibly to maintain operational effectiveness and achieve long-term societal sustainability.

XPS anticipates that the impact of climate change and the associated risk are likely to be immaterial to the Group.

The Group remains confident that it is prepared and adaptable to addressing emerging climate-related regulation and

considers the impact to be immaterial.

Statements and disclosure throughout this report reflect conformance with all 11 recommendations of TCFD (pursuant

to LR 9.8.6 R (8)). The index below directs readers to key specific relevant disclosures within this section and throughout

this report; however, this section should be read in conjunction as disclosure elements are present throughout.

Governance



a) Describe the board’soversight of

climate-related risks and opportunities.

See Climate and Environmental Risk Governance

on page 36



b) Describe management’s roleinassessing

andmanaging climate-related risks and

opportunities.

See Effective Climate Risk Management on page 36

and Climate and Environmental Risk Governance

on page 36

Strategy



a) Describe the climate-related risks and

opportunities the organisation has identified

over the short, medium, and long term.

See XPS Climate Risk Horizons on page 37



b) Describe the impact of climate-related risks

and opportunities on the organisation’s

businesses, strategy, and financial planning.

See Potential Impact of Climate-related Risks and

Opportunities on pages 38 and 39

See Climate as an Input on page 41



c) Describe the resilience of the organisation’s

strategy, taking into consideration different

climate-related scenarios, including a 2°C or

lower scenario.

See XPS Scenario Resilience on page 40

Risk management



a) Describe the organisation’s processes for

identifying and assessing climate-related

risks.

See Effective Climate Risk Management on page 35

See Risk Management on pages 52 to 58



b) Describe the organisation’s processes for

managing climate-related risks.



c) Describe how processes for identifying,

assessing, and managing climate-related risks

are integrated into the organisation’s overall

risk management.

Metrics and targets



a) Disclose the metrics used by the organisation

to assess climate-related risks and

opportunities in line with its strategy and risk

management process.

See Monitoring and Advocating Progress on page 41



b) Disclose Scope 1, Scope 2 and, if appropriate,

Scope 3 greenhouse gas (GHG) emissions

and the related risks.

See Carbon Metrics on page 43



c) Describe the targets used by the organisation

to manage climate-related risks and

opportunities and performance against

targets.

See Climate and Environmental Risk Governance

on page 36

See Monitoring and Advocating Progress on page 41



– fully compliant with TCFD recommendations



– partially or non-compliant with TCFD recommendations

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Non-financial and sustainability information statement

This section of the Annual Report and Accounts constitutes

the XPS Group’s Non-Financial and Sustainability Information

Statement, produced to comply with Sections 414CA and

414CB of the Companies Act 2006.

Reporting requirement

Relevant policies

, documents,

or reports that set out our approach Section(s) and page(s)

Anti-bribery and

corruption

• Bribery and gifts policy

• Whistleblowing policy

• Financial crime policy

See our “Being a Responsible Business”

section on page 34

Business model

Business model, see pages 6 and 7

Employees

• Recruitment and selection policy

• Inclusion and diversity policy

• Flexible working policy

• Harassment and bullying

prevention policy

• Grievance policy

• Health and safety policy

• Agile working policy

• Family friendly policy

• Sabbatical policy

See our “Empowering Our People to Thrive”

section on page 26 to 29

Environmental

matters

• Environmental policy See our “Protecting Our Environment”

section on pages 35 to 44

Description of

principal risks

andimpact on

business activity

See “Principal Risks and Uncertainties”

section on pages 52 to 58

Respect for human

rights

• Data privacy policy

• Modern slavery policy

• Information & cyber security policy

See our “Being a Responsible Business”

section on page 34 and our website

www.xpsgroup.com/modern-

slavery-statement

Social matters

• Matched fundraising Policy

• Corporate volunteering policy

• Community Giving Policy

See our “Strengthening Our Communities”

section on pages 30 and 31

Non-financial key

performance

indicators

Operating responsibly for all our

stakeholders, see page 26 to 35

1 Group policies are regularly reviewed and ExCo monitors adherence.

The following table sets out where, within our Annual

Report and Accounts, we provide further detail on

matters required to be disclosed under the sections

above. In particular, it covers the impact we have on

the environment, our employees, social matters, human

rights, anti-corruption and anti-bribery matters, policies

pursued and the outcome of those policies, and principal

risks that may arise from the Company’s operations

and how we manage these, to the extent necessary

for an understanding of the Company’s development,

performance and position and the impact of its activity.

XPS Pensions Group plc Annual Report and Accounts 2025

We are proud to have delivered the

third consecutive year of double-digit

percentage growth in revenues and

operating profits.”

Chief Financial Officer’s review

Third consecutive year of double digit growth

in key metrics

Snehal Shah

Chief Financial Officer

It has been another strong year for the Group, with

revenue growing by 18% and adjusted EBITDA growing

27% year on year. The Administration business

has performed particularly well, alongside strong

performances within Actuarial and Consulting and SIP.

The investment business has shown a small decline,

which had been expected following strong growth in

prior years partially driven by the LDI crisis. The Group’s

operational gearing continues to improve, with adjusted

diluted EPS and adjusted EBITDA growth exceeding

revenue growth for the third year in a row. We made a

strategic acquisition in the year of Polaris Actuaries and

Consultants Ltd, which will accelerate growth into the

insurance consulting market. We continue to develop and

roll out our own administration platform - Aurora, which is

starting to contribute to our operational gearing, and will

continue to do so in the future.

Group income statement

Adjusted

As reported

FY 2025

£m

FY 2024

£m

Change

FY 2025

£m

FY 2024

£m

Change

Revenue

Actuarial & Consulting 106.1 93.4 14% 106.1 93.4 14%

Investment Consulting 19.4 20.3 (4%) 19.4 20.3 (4%)

Total advisory 125.5 113.7 10% 125.5 113.7 10%

Administration 93.7 71.9 30% 93.7 71.9 30%

SIP 12.6 11.0 15% 12.6 11.0 15%

NPT — — — — 2.8 (100%)

Total revenue 231.8 196.6 18% 231.8 199.4 16%

EBITDA 69.7 54.8 27% 58.0 79.8 (27%)

Depreciation & amortisation (6.8) (5.8) (17%) (13.8) (12.8) (8%)

EBIT

62.9 49.0 28% 44.2 67.0 (34%)

Net finance expense (3.4) (4.5) 24% (3.4) (4.5) 24%

Profit before tax 59.5 44.5 34% 40.8 62.5 (35%)

Income tax expense (14.4) (11.4) (26%) (10.4) (8.3) (25%)

Profit after tax 45.1 33.1 36% 30.4 54.2 (44%)

1 Adjusted measures exclude the impact of exceptional and non-trading items: acquisition-related amortisation, share-based payments,

corporate transaction costs, restructuring costs and other items considered exceptional by virtue of nature, size and incidence. In FY 2024

they also exclude the Group’s NPT business, which was sold in November 2023, and the related gain on disposal. See note 5 for details

of exceptional and non-trading items, and table one of the appendix to this report for the prior year reconciliation to exclude the NPT

business.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Revenue

Total Group revenues grew 16% year on year. Excluding

NPT which was sold in November 2023, Group revenues

grew 18% year on year.

Advisory had another strong year with 10% year on year

growth in revenues. Within that, Actuarial & Consulting

achieved 14% year on year growth in revenues, due to

high client activity levels driven by continued regulatory

changes, demand for our risk transfer and GMP

services as well as other project work, and inflationary

increases in fees.

Investment Consulting showed a decrease of 4% year

on year, due to the normalisation of activity levels after

two years of very strong growth in which revenues had

grown 46%.

Administration revenues grew 30% year on year with

theonboarding of a large new first-time outsource

client and high levels of project work, such as GMP

equalisation and the McCloud judgement rectification.

Inflationary increases in fees also helped to drive the

growth in the year. Administration accounted for 40%

of the Group revenues (FY 2024: 36%). The McCloud

remedy project contributed to significant growth this

year and with the passing of the statutory deadline of

31 March 2025 for the majority of the remedy work to

be completed, we will be lapping tough comparators

next year.

SIP revenues were up 15% on the prior year, due to

strong underlying sales and our placement on the St

James’s Place panel.

Operating costs

Total operating costs (excluding exceptional and non-

trading items) of £168.9 million (FY 2024: £147.6 million)

grew by 14% year on year. The main drivers for the cost

increases are an increase in headcount as the business

grew (1,901 FTE vs. 1,712 last year), inflationary/market-

driven pay increases, higher bonus cost commensurate

with the strong financial performance, investment in

Insurance Consulting and inflationary increases in other

operating costs.

Adjusted EBITDA

Despite another year of inflationary pressures on our

costs, the Group has delivered further operational

gearing with adjusted EBITDA growing by 27% year on

year – ahead of the Group adjusted revenue growth

of 18%. Adjusted EBITDA margin was 30.1% (FY 2024:

27.9%). The margin improvement has been delivered

through a mix of business effect including higher risk

transfer activity and the one-off McCloud remedy

project which was delivered very efficiently through the

use of our proprietary administration platform Aurora, as

well as disciplined cost management. After normalising

for the one-off impact of some of this higher margin

project work, profit margin improved in-line with our

plan, and we expect this improvement to continue

going forward.

Adjusted profit before tax grew by 34% year on

year benefiting from the strong revenue growth and

continued operational gearing.

Exceptional and non-trading items

Exceptional and non-trading items in the year totalled

£18.7 million (FY 2024: £15.0 million excluding the gain

on sale of NPT). Amortisation of acquired intangible

assets amounted to £7.0 million (FY 2024: £7.0 million).

Share-based payment charges were £8.8 million (FY

2024: £6.4 million) with a higher National Insurance

charge resulting from the Group’s strong share price,

and the increase in employer’s National Insurance due to

take effect from April 2025.

The Group also incurred corporate transaction costs

of £1.8 million in the year, £1.2 million of acquisition-

related remuneration in respect of the acquisition of

Penfida Limited, and £0.9 million of acquisition-related

remuneration related to the Polaris acquisition (FY

2024: acquisition-related remuneration of £1.7 million

in relation to the acquisition of Penfida Limited). All

acquisition-related remuneration relating to Penfida

has now been paid, following the second anniversary

of the acquisition in September 2024. £9.2 million of

the cash upon completion relating to Polaris included

a continuing employment clause, as does the further

payment of up to £35 million payable in three years’

time , which is also contingent upon achievement of

certain stretching business objectives. As continued

employment is one part of the contingent consideration

test, according to IFRS 3, these amounts must be

treated as a post-transaction employment cost accruing

over the deferment period of three years. An amount,

therefore, has been recognised in FY 2025 representing

the acquisition-related remuneration expensed in the

year. These amounts are material in size and one-off in

nature and will continue to be for the next three years.

These amounts will continue to be classified within the

exceptional category in line with the Group’s accounting

policies. If the entire contingent acquisition-related

remuneration is not payable at the end of the three-year

period, any resulting credit will also flow through the

exceptional category.

Due to the treatment under IFRS 3 discussed above for

a large element of the consideration for the acquisition

of Polaris, the accounting consideration was significantly

smaller than the cash paid and expected cash outflow

of the payment due in three years. As a result, a gain on

purchase has been recognised in the year of £1.0 million.

This credit arises directly from the Polaris acquisition

and does not reflect the performance of the Group.

Accordingly, under the Group’s accounting policies, this

has been classified as an exceptional item.

Tax on the non-trading items was a credit of £3.9 million

(FY 2024: £3.2 million). This is driven by the unwinding

of deferred tax liabilities linked to intangible assets

acquired in previous periods, and tax relating to share-

based payments.

The prior year figures include an exceptional gain of

£34.6 million on the disposal of the NPT business, which

was sold in November 2023. The exceptional gain was

offset by related corporate transaction fees of £2.1 million

in the year.

XPS Pensions Group plc Annual Report and Accounts 2025

Net finance costs

Net finance costs for the year were £3.4 million

(FY 2024: £4.5 million). The decrease is due to the

significantly lower loan balance throughout most of FY

2025 compared to the prior year – the loan balance was

significantly reduced in November 2023 following the sale

of the NPT business and remained at a lower level until

February 2025.

Taxation

A tax charge of £14.3 million (FY 2024: £11.5 million)

was recognised on adjusted profits. This represents an

effective tax rate of 24% (FY 2024: 26%). The Group

alsorecognised a tax credit of £3.9 million (FY 2024:

£3.2million) on exceptional and non-trading items,

whichresulted in an overall tax charge for the year

of £10.4 million (FY 2024: £8.3 million). The strong

performance in trading drove the increase in tax

chargesin the year compared to the prior year.

Our businesses continue to generate considerable tax

revenue for the UK government. For the year ended

31March 2025, we paid corporation tax of £11.2 million

(FY 2024: £11.3 million); we collected employment taxes

of £36.5 million (FY 2024: £32.1 million) and VAT of

£36.9million (FY 2024: £31.9 million). Additionally, we

have paid £1.3 million (FY 2024: £1.3 million) in business

rates. The total tax contribution of the Group was,

therefore, £85.9 million (FY 2024: £76.6 million), which

equates to 37% of revenue (FY 2024: 38%).

EPS

Basic EPS for FY 2025 decreased by 44% year on year

to 14.7p (FY 2024: 26.2p) – the decrease is due to the

gain on disposal of NPT in the prior year. Basic EPS

for the prior year excluding the gain on disposal of

the NPT business was 10.5p which gives growth in the

year of 40%.

Adjusted fully diluted EPS grew 36% year on year to

20.6p in FY 2025 (FY 2024: 15.1p), driven by strong

revenue growth as well as continuing delivery of

operational gearing in the business.

Dividend

A final dividend of 8.2p is being proposed by the Board

(FY 2024: 7.0p). The final dividend, which amounts to

£17.0 million (FY 2024: £14.6 million), will be paid on 22

September 2025 to those shareholders on the register

on22 August 2025.

Cash flow, capital expenditure and financing

Non-GAAP cash flow

31 March 2025

£m

31 March 2024

£m

Operating

Adjusted EBITDA 69.7 55.3

Change in net working capital

(3.0) 2.4

Adjusted operating cash flow (OCF)

66.7 57.7

OCF conversion 96% 104%

Financing & tax

Net finance expense (3.5) (4.3)

Taxes paid (11.2) (11.3)

Proceeds from/(repayment of) loans 31.0 (44.0)

Repayment of lease liabilities (2.0) (2.7)

Share-related movements (19.7) (7.7)

Net cash flow after financing 61.3 (12.3)

Investing

(Acquisition)/disposal (24.1) 34.5

Capex (8.2) (7. 5)

Net cash flow after investing 29.0 14.7

Dividends paid (22.2) (18.0)

Exceptional items (2.1) —

Movement in cash 4.7 (3.3)

Net debt

40.3 14.0

Leverage 0.57x 0.27x

1 Change in net working capital exclusive of corporate transaction costs detailed in note 5.

2 Appendix 2 provides a reconciliation of this figure to the operating cash flow presented in the consolidated financial statements.

3 Net debt constitutes long-term borrowings and contingent consideration, less cash. See note 22 to the consolidated financial statements for

a reconciliation of this figure.

Chief Financial Officer’s review continued

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

The Group has demonstrated strong cash management

in the year. Adjusted operating cash flow increased by

£9.0 million, driven by a £14.4 million increase in adjusted

EBITDA offset with a £5.4 million decrease in net working

capital year on year. This decrease was expected due

to the timing of billing in the year and the prior year on

project work. Overall, this resulted in adjusted operating

cash flow conversion of 96% compared to 104% in the

prior year.

Taxes paid in the year of £11.2 million (FY 2024: £11.3 million)

were lower than the prior year, due to tax adjustments for

prior years computed during the year.

During the year, the Group drew down £31.0 million

of the revolving credit facility (RCF), predominantly

to fund the acquisition of Polaris Actuaries and

Consultants Limited (FY 2024: repayment of £44.0

million). Interest paid on the loan balance amounted

to £2.3 million (FY 2024: £3.9million), £0.3 million was

paid on interest relating to leases in the year (FY 2024:

£0.3million), and loan arrangement fees paid amounted

to £1.0 million (FY 2024: £0.2 million). Offsetting this

was £0.1 million of interest income received (FY 2024

£0.1million). Capital expenditure in the year amounted

to £8.2 million (FY2024: £7.5 million) with £2.1 million

spent on leasehold improvements and office fit-outs

andthe remaining £6.1 million on software development,

enhancements to our platforms, cyber security, and other

IT equipment. £2.0 million relating to leases was paid in

the year (FY 2024: £2.7 million).

In February 2025 the Group acquired Polaris Actuaries

and Consultants Limited for cash consideration

of £13.8million, and prepaid acquisition-related

remuneration of £9.2million. A further amount of up

to £35million is due to be paid in three years’ time,

which is payable contingent upon achieving stretching

business targets as well as continued employment.

Due to the continuing employment clause, under IFRS

3 this amount has been treated as acquisition-related

remuneration. £1.1 million of costs relating to the Penfida

acquisition in a previous year were also paid in the year.

In November 2023, the Group sold its NPT business for

cash consideration of £35.0 million, and an additional

£2.0 million in respect of the completion balance sheet;

£2.1 million was paid out in transaction-related fees, and

a further £0.4 million was paid out relating to contingent

consideration for prior yearacquisitions.

The Group spent £18.7 million (FY 2024: £5.6 million)

on acquiring its own shares via its EBT, to be used to

settle employee share options as they vest. £0.6million

(FY2024: £0.6 million) was paid to employees as

dividend equivalents on the vesting of share options

as well as incurring £1.3 million of employer’s National

Insurance (FY 2024: £1.5 million). Offsetting this was £0.9

million of cash received from employees on the exercise

of SAYE options. After paying £22.2 million in dividends,

and £2.1 million in exceptional costs relating to the Polaris

acquisition, the Group cash balance increased by £4.7

million year on year to close at £14.7 million. The Group

had drawn down £55.0 million of its £120 million RCF at

31 March 2025, resulting in net debt of £40.3 million, an

increase of £26.3million year on year.

Going concern

Details on the Directors continuing to adopt the going

concern basis in preparing the financial statements

can be found in the Viability Statement in the Strategic

Report in the Annual Report. The Directors have

confirmed that, after due consideration, they have a

reasonable expectation that the Company and the Group

have adequate resources to continue in operational

existence for the foreseeable future. For this reason, they

continue to adopt the going concern basis in preparing

the financial statements.

Subsidiary undertakings

The subsidiary undertakings of the Group in the year are

listed in note 33 in the Annual Report.

Snehal Shah

Chief Financial Officer

18 June 2025

XPS Pensions Group plc Annual Report and Accounts 2025

Appendix: Reconciliation of reported/statutory results

toalternativeperformancemeasures (APMs)

In order to assist the reader’s understanding of the financial performance of the Group, it continues to present a range

of results metrics to demonstrate its performance. These include those presented in accordance with International

Accounting Standards (IFRS) and APMs. APMs exclude specific exceptional and non-trading items as set out in note 5

of the consolidated financial statements.

An explanation of the Group’s key APMs has been detailed below:

APM

Closest equivalent

statutorymeasure APM definition and purpose

Adjusted

EBITDA

excluding the

NPT business

Profit/loss

from operating

activities

Definition: Earnings before interest, tax, depreciation and amortisation

excluding exceptional and non-trading items and excluding the NPT business

disposed of in November 2023.

Purpose: A recognised APM which has been central to the business over

many years and through different ownership structures. It allows the Group

to monitor the underlying trading performance of the business without

the impact of external and exceptional and non-trading factors distorting

the figures.

OCF

conversion

Net cash from

operating

activities

Definition: The conversion of adjusted EBITDA into cash.

Purpose: Measures how well the Group is managing its operating cash flows.

Unlike net cash from operating activities, it excludes the impact of tax and

exceptional and non-trading items and, therefore, allows for a direct and like-

for-like comparison to the Group’s key profit-related APM, adjusted EBITDA.

Adjusted

diluted EPS

excluding the

NPT business

Diluted earnings

per share

Definition: Reflects the profit after tax, adjusted to remove the impact of

exceptional and non-trading items and the NPT business disposed of in November

2023. Details of this can be found in note 5 as well as in the reconciliations on the

following page of this Chief Financial Officer’s Review.

Purpose: Presents an EPS measure used more widely by investors and analysts

and more in line with how the Group’s dividends are calculated.

Leverage

Cash and cash

equivalents

Definition: Leverage ratio showing the amount of third-party debt excluding

leases (net of cash held) relative to the last twelve months adjusted

pro-forma EBITDA.

Purpose: Management can measure exposure to reliance on third-party debt.

Leverage is the key measure in reporting to the Group’s banks and driving

the interest rate margin which is added to SONIA to determine the all-in

rate payable.

A reconciliation of the Group’s APMs to their closest statutory measures has been provided below:

1. Adjusted EBITDA excluding NPT

31 March 2025

£m

31 March 2024

£m

Profit from operating activities 44.2 67.0

Depreciation and amortisation 13.8 12.8

Gain on disposal of NPT business — (32.5)

Other exceptional and non-trading items 11.7 8.0

Adjusted EBITDA excluding gain on disposal of NPT business 69.7 55.3

Trading EBITDA in respect of NPT business — (0.5)

Adjusted EBITDA excluding NPT 69.7 54.8

Chief Financial Officer’s review continued

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

2. OCF conversion

31 March 2025

£m

31 March 2024

£m

Profit from operating activities 44.2 67.0

Depreciation and amortisation 13.8 12.8

Other exceptional and non-trading cash items

11.7 8.0

Gain on disposal of NPT business — (32.5)

Trading EBITDA 69.7 55.3

Net cash from operating activities 41.8 42.9

Income tax paid 11.2 11.3

Cash exceptional and non-trading items

13.7 3.5

Adjusted operating cash flow 66.7 57.7

OCF conversion 96% 104%

3. Adjusted diluted EPS excluding NPT

31 March 2025

£m

31 March 2024

£m

Profit after tax and total comprehensive income for the year 30.3 54.2

Adjustment for exceptional and non-trading items (net of tax)

14.8 (20.7)

Profit after tax from operating activities for NPT business — (0.4)

Adjusted profit after tax excluding NPT 45.1 33.1

Dilutive weighted average number of shares (’000) 219,437 219,621

Adjusted diluted EPS excluding NPT (pence) 20.6 15.1

4. Leverage

31 March 2025

£m

31 March 2024

£m

Cash and cash equivalents 14.7 10.0

Bank debt (55.0) (24.0)

Contingent consideration — —

Net debt

(40.3) (14.0)

Trading EBITDA 69.7 55.3

Impact of IFRS 16 ignored for bank covenants purposes

(3.3) (3.0)

Pro-forma impact of M&A transactions in year

4.5 (0.5)

Adjusted EBITDA for covenant 70.9 51.8

Leverage 0.57x 0.27x

1 See note 5 of the consolidated financial statements.

2 This is the cash element of exceptional and non-trading items: National Insurance on share-based payments (note 12 of the consolidated

financial statements) ), the prepaid Polaris consideration of £9.2 million and transaction costs relating to the Polaris acquisition in note 6 (FY

2024: National Insurance on share-based payments, and transaction costs relating to the NPT disposal).

3 See note 22 of the consolidated financial statements.

4 The Group’s banking facilities agreement ignores IFRS 16 for covenant test purposes. Debt excludes lease-related liabilities and to be on a

consistent basis adjusted pro-forma EBITDA includes rent-related costs as an operating expense unlike in the statutory income statement

where they are treated as depreciation of right-of-use assets with a related financing cost.

5 Pro-forma-related adjustments reflect the impact of M&A-related transactions as if they had been included for the whole financial

year. TheFY 2025 adjustment is to reflect the Polaris acquisition taking place on 1 April 2024 (i.e. it includes Polaris for the whole

year). TheFY2024 adjustment is to reflect the NPT sale taking place on 1 April 2023 (i.e. it removes the EBITDA that the NPT business

contributedbetween 1 April 2023 and the point it was sold on 20 November 2023).

—

XPS Pensions Group plc Annual Report and Accounts 2025

Principal risks and uncertainties

The Group deploys a comprehensive risk management and internal control

framework, enabling it to identify and manage risk proactively, supporting the

growth of the business. Effective risk management provides the Group with

fully articulated risks, enabling it to identify and embraceopportunity.

XPS Group is inherently exposed to a wide range of risks which, should they materialise, could have a material impact on

its financial performance, reputation or operational resilience.

Risk management highlights

Over the last year our risk management and internal controls frameworks have continued to operate effectively, enabling

us to respond to the evolving risks inherent in our day-to-day operations, alongside supporting new opportunities

and initiatives. The Group’s risk environment is regularly reviewed by senior management alongside the internal

control frameworks in place. This ensures that they continue to be effective, and enhancements to address changes

in the external threat environment are considered. Internal and external assurance frameworks support this, ensuring

regular, planned reviews to validate control design and effectiveness, as well as highlighting opportunities for further

improvements. Cyber crime continues to be a key focus for senior management, recognising the threats to the Group

from phishing, ransomware and supply chain attacks.

We continuously develop our risk management capabilities to support the Group and address the evolving threats in our

market. Since the last report there have been a number of significant enhancements, including:

Managing risk effectively

Reviewing existing risk and controls

frameworks and assessments, taking

into account the introduction of

Provision 29 in the UK Corporate

Governance Code. This includes

workshops with senior management

to review critical risks and identify

material controls and developing the

frameworks supporting these areas.

Enhancing the existing fraud prevention

framework and fraud risk assessment

in light of the “failure to prevent fraud”

aspect of the Economic Crime and

Transparency Act with support from

external consultants. This includes

developing a comprehensive view

of fraud risk exposures across each

business area and central functions.

Development of the existing incident

management frameworks to support

the Group’s ability to effectively

respond to a significant cyber event.

This includes developing the existing

supporting documentation (BC plans,

IT runbooks and incident-specific

playbooks) and testing these up

to, and including, Board level. We

were also able to support our clients

through a number of well received

webinars on these topics.

Continuing to develop the existing

Risk team and its capabilities, through

supporting staff to develop into

subject matter experts in their areas,

alongside cross training to allow

holistic risk management across

multiple domains.

Supporting new initiatives, such as

the adoption of Artificial Intelligence,

highlighting the threats and

opportunities and ensuring that they

are being managed appropriately.

Actively engaging with key change

management programmes to ensure

they effectively identify and manage

key risks to the Group, as well as fully

recognising potential opportunities.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Our Risk Management Framework

Board of Directors/Audit & Risk Committee

Operational

management

Firstline

Control of risks

Confirmation of

control effectiveness

Strategic overview

of controls

Key activitiesOutcomes

• Implement

governance, risk and

control frameworks

• Measure

and manage

projectperformance

• Manage risk (within

agreed riskappetite)

• Design governance,

risk and control

frameworks

• Monitor adherence

to framework

• Provide timely,

balanced

information

• Review framework

application

objectively

• Offer independent

oversight of first and

second lines

Senior management/Risk

Management Committee

Risk management

Second line

Internal audit

Third line

Risk strategy

XPS recognises the need to take risks to help its customers to achieve their objectives and achieve commercial

success. We will seek to take risks where we have the skills to exploit that risk and manage it within risk appetite

and avoid and minimise risks where it is unrewarded, or it cannot be well managed or understood.

Risk governance and three lines of defence

The Board of Directors has the ultimate responsibility for risk management

and internal control, including for the determination of the nature and extent

of the critical risks it is willing to take to achieve its strategic objectives.

The Group has established a committee governance structure (see below)

atboth the Board and management levels to provide oversight and challenge

on the implementation of the policy and framework across all areas and risk

types within the Group. The Group also applies the principles of the three

lines ofdefence model in its risk management approach:

Risk management process

XPS uses an iterative risk

management process (risk

identification, risk assessment,

risk treatment, monitoring and

reporting) to help business areas

and central functions actively

manage all risks across the Group.

Risk register

The risk register incorporates

a top-down Group risk register

focusing on critical risks faced at

the Group level and bottom-up

registers, including risk registers

for each business area and central

function and a specialist risk

into a particular risk type.

Enablers: System, process, people, culture

Risk identification

Risk treatment

Monitoring

and

reporting

Risk

assessment

Risk Management Framework

Our Risk Management Framework (RMF), as illustrated in the diagram below, supports our Group-wide approach to

risk management. This RMF is made up of several key components, providing clear governance and an effective risk

management process that is supported by systems and consistent risk culture across the Group.

XPS Pensions Group plc Annual Report and Accounts 2025

Trend:

Increased risk

Stable

Improving

Regulatory and legislative non-compliance

Link to strategy Trend

Description

Failure to comply with regulatory requirements could result in regulatory penalties, reputational damage, and potential operational

disruption (e.g. loss of licence to operate). The evolving regulatory landscape and changes in legislation exacerbates non-compliance risk.

Critical regulatory compliance areas include:

• Financial Conduct Authority (FCA).

• Market Abuse Regulations (MAR).

• Anti-Money Laundering (AML).

• Occupational health & safety requirements.

Update

This risk remains unchanged from the prior year. We continue to monitor regulatory reporting and regulatory change.

Key mitigating action

• Horizon scanning to ensure that regulatory changes are interpreted correctly and responded to in a timely and adequate manner.

• Use of Insidetrack system to automatically manage insider list.

• Bespoke training on MAR responsibilities.

• Annual financial crime training for all staff and bespoke training for regulated businesses.

• Review between finance and risk to ensure that reports to the FCA are accurate.

Focus for FY 2026

Alongside the continuation of our existing key mitigating actions we will:

• Continue with our ongoing training programme on key compliance areas.

• Continue to enhance controls relating to AML reviews.

Risk governance and three lines of defence continued

The Board, with the support of the Audit & Risk

Committee, has identified the principal risks that

could materially impact the Group’s ability to achieve

its objectives and deliver its strategy. These include

general business risks that are faced by the Group and

are comparable to those that would be faced by similar

businesses operating in the same sector as the Group.

These general business risks include:

• Political/economic/social – risks created by the

political, economic/ financial and social environment

in which we operate, e.g. war, demographic trends,

pandemics, government influence on business,

currency changes, market volatility, interest rates,

orliquidity.

• Competition – risks of change to the demand side of

the business due to changes in customer demands

or competitors, likely to influence the entire industry,

e.g. aggressive competitor pricing, consolidation

trends, major technological innovation, or substitute

technologies. These changes may not directly affect

the Group but could influence the entire industry.

• Legal and regulatory – risks associated with the

criminal and civil judicial processes and contract

law, e.g. not identifying changes required by new

legislation, increased litigation in a particular field,

orindustrialaccidents.

• Environmental – risks associated with climate-related

change, how these changes can impact business

models and how businesses in turn can manage the

impact of their operations on the environment.

Update on principal risks

Principal risks are defined as those risks that we

determine to be “critical” to XPS as a business across

the four pillars referenced in the updated Corporate

Governance Code: operational, compliance, financial

and reporting. These risks are owned and managed

by a member of the senior executive team or senior

management who has accountability for ensuring that

therisk is effectively managed.

We recognised that it is good practice to regularly review

our principal risk profile to ensure its relevance and in

line with our strategies. Recently, the Board reviewed

the principal risks in response to the introduction of

Provision 29 in the UK Corporate Governance Code with

the support of external advisors. The review focuses on

identifying risks that are critical to XPS as a business,

supporting a risk focused approach to identifying

material controls.

The principal risks and uncertainties are detailed below.

We disclose links to strategy, mitigating actions, updates

for this year and key focuses forFY 2026 to manage the

risk and improve internal controlfor each risk.

Links to strategy:

Regulatory change

Expand services

Grow market share

Mergers and acquisitions

Principal risks and uncertainties continued

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Client service delivery errors & claims

Link to strategy

Trend

Description

New or historic errors in client service delivery, both advice provided to clients or in pension administration, could result in legal claims,

financial liabilities, reputational damage and loss of clients. Errors could be caused by staff, systems, processes or oversight issues.

Update

This risk remains unchanged from the prior year.

Key mitigating action

The Group recruitment process ensures only high-calibre staff are recruited, who are then supported by training programmes. Staff use

standardised documented processes and checklists for key processes. Higher-risk work is identified with peer review and additional sign-

off required, with regular quality audits to confirm processes are being followed correctly. There are also built-in controls in key business

systems and authorisation processes for major transactions that require checks and sign-offs from senior members of the team. Insurance

arrangements are in place to limit the loss should an error occur. Root cause analysis is used to identify where control improvements are

required, which are monitored through to implementation.

Focus for FY 2026

Alongside the continuation of our existing key mitigating actions we will:

• Continue the enhancement of the root cause analysis as part of the claims management process.

• Continue to increase the coverage of automated controls embedded in systems.

• Continue to ensure that there are authorisation processes in place where manual checks are a substitute for system built-in controls.

Critical systems and disruption

Link to strategy

Trend

Description

Disruption to critical systems may arise from cyber-attacks, internal system failures, or third-party service disruptions. This disruption could

lead to operational disruption, loss or theft of confidential data, increased costs for resolution efforts, regulatory penalties, reputational

damage and loss of clients.

Update

This risk remains unchanged from the prior year. We will continue to monitor any potential threats to critical systems, especially cyber-

attacks. Additional assurance is provided through the existing Cyber Essential Plus certifications and by having appropriate insurance

policies in place.

Key mitigating action

The Group has an Information Security Management System (ISMS) in place to ensure that risks are identified and managed effectively.

This includes a range of technical controls policies and procedures, supported by a dedicated Cyber Security team, and a 24/7 Security

Operations Centre. These are supported by regular independent audits and penetration tests.

All staff are provided with comprehensive policies and guidance, with awareness of key topics reinforced with a programme of training

and testing initiatives, e.g. phishing awareness. The Group has dedicated business continuity frameworks and capabilities to minimise the

impact of incidents affecting the Group’s data, facilities or systems. These frameworks include incident management capabilities to allow

the Group to effectively co-ordinate and communicate with stakeholders in the case of a significant incident.

Focus for FY 2026

Alongside the continuation of our existing key mitigating actions we will:

• Continue to engage in threat intelligence by identifying the tactics, techniques and procedures that threat actors use to cause disruption.

XPS Pensions Group plc Annual Report and Accounts 2025

Sensitive data breach

Link to strategy

Trend

Description

A sensitive data breach may result from cyber-attacks, internal system vulnerabilities, process failures, or third-party breaches. This

includes non-compliance with data protection regulations (including GDPR) in collecting, processing, storing, or using sensitive data.

Asensitive data breach can lead to regulatory penalties, loss of licence to operate, reputational damage, and client attrition.

Update

The Group has continued to develop its capabilities, recognising the continued evolution of this risk. This risk remains unchanged from

theprior year.

Key mitigating action

The Group has a range of data protection policies and processes in place, and has implemented robust controls to ensure that we are

GDPR compliant. All staff are fully aware of these policies, with awareness of key topics reinforced with annual training and testing

initiatives, e.g. phishing awareness.

The Group has an Information Security Management System (ISMS) in place to ensure that risks are identified and managed effectively.

Additional assurance is provided through the Cyber Essential Plus certification and by having appropriate insurance policies in place.

This includes a range of technical controls policies and procedures, supported by a dedicated Cyber Security team, and a 24/7 Security

Operations Centre. These are supported by regular independent audits and penetration tests and purple team testing.

The Group has dedicated business continuity frameworks and capabilities to minimise the impact of incidents affecting the Group’s

data, facilities or systems. These frameworks include incident management capabilities to allow the Group to effectively co-ordinate and

communicate with stakeholders in the case of a significant incident.

Focus for FY 2026

Alongside the continuation of our existing key mitigating actions we will:

• Continue to enhance threat assessment to ensure controls are addressing new and emerging threats.

Third-party or supplier disruption

Link to strategy

Trend

Description

XPS is reliant on critical third parties and suppliers. These critical third parties and suppliers are exposed to significant risks, such as

cyber-attacks, data breaches and operational disruption. If these risks materialise, this could lead to XPS facing operational disruption,

increased costs for resolution efforts, regulatory penalties, reputational damage and loss of clients.

Update

This risk remains unchanged from the prior year.

Key mitigating action

XPS operates a third-party management framework which ensures that all suppliers meet the necessary requirements to protect the

information assets they may be given access to.

The Group has a formal selection process that ensures due diligence is carried out before access is granted to client information. XPS uses

a supplier management platform to assist with managing its third-party suppliers and to ensure they comply with the standards required

by XPS and its clients. The approvals and signing framework also ensures contracts include key risks relating to services provided and risks

identified are managed and accepted prior to agreements being signed.

All third parties are reviewed prior to any access to information being granted and at regular intervals during the life of the contract, with

key third parties being reviewed at least on an annual basis. We also regularly monitor service delivery, general governance and financial

status of all key suppliers we contract with through ongoing performance review meetings.

Focus for FY 2026

Alongside the continuation of our existing key mitigating actions we will:

• Explore the use of AI technology to enhance and streamline the procurement and third-party risk management process.

• Leverage the use of the due diligence platform to better understand the information security, business and financial controls our

suppliers have in place.

• Enhance the information XPS provides to clients around its information security controls through the implementation of a Trust portal.

Principal risks and uncertainties continued

Trend:

Increased risk

Stable

Improving

Update on principal risks continued

Links to strategy:

Regulatory change

Expand services

Grow market share

Mergers and acquisitions

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

Misappropriation of client funds

Link to strategy Trend

Description

XPS employees (across advisory, administration, SIP divisions) could collude to commit large-scale fraudulent activities. This risk arises

from factors such as opportunity (e.g. weak controls or oversight), motivation (e.g. financial difficulties), and rationalisation of fraudulent

behaviour. Such activities could result in significant financial loss, regulatory penalties, loss of licence to operate, reputational damage,

andclient attrition.

Update

This risk remains unchanged from the prior year.

Key mitigating action

• Approval and signing matrix which sets out requirements and approval processes for major transactions.

• Automated controls built into systems that mandate segregation of duty.

• Bespoke training pathways to ensure that staff are appropriately trained for their roles.

Focus for FY 2026

We will continue to monitor the effectiveness of existing key mitigating actions.

Inaccurate internal financial information (budgeting & forecasts)

Link to strategy Trend

Description

The financial information (BS, P&L, cash flow – budgets and forecasts) used to inform strategic decision making, investment decisions

and operational planning could be inaccurate. Significant inaccuracies could result in poor strategic decision making, inefficient resource

allocation and overall financial performance.

Update

The Group has continued to improve its budgeting and forecasting frameworks, supporting growth. This is evidenced by consistent

delivery of financial results in line with or ahead of market consensus.

Key mitigating action

The Group has a highly qualified and experienced financial reporting team. There is an extensive financial controls framework in place and

key controls are regularly tested by internal and external audits. The Group undertakes detailed bottom-up budgeting and reforecasting

exercises with the final budget and reforecast approved by the Board.

Management information is published on a regular basis and the Executive Committee reviews the financial performance of the Group at

least monthly. The Board receives and scrutinises the financial performance of the Group at each Board meeting.

Focus for FY 2026

We will continue to monitor the effectiveness of existing key mitigating actions.

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic opportunity or execution mismanagement

Link to strategy Trend

Description

There is a risk that XPS misses significant strategic opportunities or fails to adapt to an evolving market. This could be driven by ineffective

identification or execution of strategic goals. This could result in reduced market share, diminished competitive advantage, and erosion of

shareholder value.

Update

This risk remains unchanged from the prior year.

Key mitigating action

• Regular review and approval of projects from the Executive Committee.

• Monthly forums for each key project that monitor work stream progress, key milestones, lessons learned, bottlenecks, financial planning

and budgeting, and action plans.

• Change management policy in place.

• Monthly executive committee meetings with strategy as a regular agenda.

Focus for FY 2026

We will continue to monitor the effectiveness of existing key mitigating actions.

Financial reporting risks

Link to strategy Trend

Description

This risk focuses on the following risk areas in the financial reporting process:

• General risk of error leading to a material financial misstatement.

• Financial reporting fraud and management override of controls.

• Specific risk of judgemental error leading to material financial misstatement, especially in areas requiring significant management

judgement and assumptions including alternative performance measures, valuation of goodwill and intangibles, accounting for

significant projects such as merger and acquisitions, and the valuation of contract assets – accrued income within the unbilled element

of pensions, investment and administration services.

Update

This risk remains unchanged from the prior year.

Key mitigating action

• The Group’s Executive Committee meets each month to discuss the operational and financial performance of the business in an executive

committee meeting. Detailed financial performance reports are produced by Finance supplemented by commentary from divisional/

functional heads.

• Flash revenue and contribution results are reviewed on a figures call each month ahead of the executive committee meeting. The figures

call is attended by the Co-CEOs, CFO, Group Financial Controller and the business unit heads as well as other members of the Finance

team. This drives a focused agenda for the executive committee meeting.

• Monthly management accounts including detailed divisional financial analysis are produced by Group Finance and tabled at each

monthly executive committee meeting.

• Monthly management accounts are submitted to the Board and discussed at the appropriate Board meeting.

• The executive team presents on financial and operational performance at all Board meetings. Divisional heads may also be invited to

present where required.

Focus for FY 2026

We will continue to monitor the effectiveness of existing key mitigating actions.

The Directors confirm that they have carried out a robust

assessment of the principal risks facing the Group, including

those that would threaten its business model, future

performance, solvency or liquidity. The principal risks are

those listed above. The Directors do not believe there to be

any additional emerging risks that are not already addressed

within the Principal Risks and Uncertainties section.

The Directors confirm in the Directors’ Responsibility

Statement that they consider that the Annual Report,

taken as a whole, is fair, balanced and understandable

and provides the information necessary for shareholders

to assess the Group’s position, performance, business

model and strategy.

Principal risks and uncertainties continued

Trend:

Increased risk

Stable

Improving

Update on principal risks continued

Links to strategy:

Regulatory change

Expand services

Grow market share

Mergers and acquisitions

XPS Pensions Group plc Annual Report and Accounts 2025

Strategic report

The Group’s business activities, together with the factors

likely to affect its future development, performance

and position, are set out in the reports referred to in the

Overview section on page 100 of the Directors’ Report.

The Directors have assessed the long-term prospects

of the Group based upon business plans and cash

flow projections for the three-year period ending

31March 2028. The three-year period was chosen as

it is considered the longest time frame over which any

reasonable view can be formed. The forecasts and cash

flow projections being used to assess going concern

cover the period up to October 2026. A 16-month period

from the sign-off of the accounts is used for the going

concern review as the Group produces more detailed

budgets and forecasts for this time frame which have

proved to be very reliable in the past. October is typically

the lowest point in the Group’s working capital and cash

cycle, which is why the going concern review extends to

October 2026.

The forecasts prepared have been comprehensively

stress-tested by using simulation techniques involving

sensitivity analysis. The stress-testing involved

removing revenue relating to a large part of customers’

discretionary spend from the Group’s revenue forecasts.

A high percentage of the Group’s revenue relates to

compliance work which is non-discretionary. Mitigating

actions, which include reducing certain non-fixed costs,

were also factored into the stress-testing.

In forming their opinion, the Directors have performed a

robust assessment of the principal risks and uncertainties

facing the Group as set out on pages 52 to 58. In addition,

note 2 on pages 125 and 126 of the accounts includes the

Group’s objectives, policies and processes for managing

its capital, its financial risk management objectives and its

exposure to credit risk, liquidity risk and market risk.

The Directors believe that dramatic changes in the

future development and size of the pensions market

which underpin the strategy of the Group as well as risks

relating to cyber security including ransomware attacks

could threaten the longer-term viability of the Group.

These risks have been considered in detail, including

potential mitigating actions and the direction of travel for

these specific risks, on pages 52 to 58.

The Group had £14.7 million of cash at 31 March 2025. In

March 2025 the Group took out a new revolving credit

facility which extends to March 2029. This facility replaced

its previous facility, which was due to end in October

2026. The facility is for £120 million, with an accordion of

£50 million. At 31 March 2025, £55 million of this facility

was drawn. The facility is subject to two covenants: net

leverage and interest cover. These covenants are forecast

to be met throughout the viability period. Further details

of the financial position of the Group, its cash flows,

liquidity position and borrowing facilities are described

within the financial statements and notes.

Having reviewed the identified risks, the Directors

are confident that the business is robust and resilient

enough to tackle any challenges that may arise over

the three-year viability period in relation to the Group’s

exposure to credit risk, liquidity risk and market risk.

With regard to market risk, the Directors have assessed

the current market conditions and the potential impact of

regulatory changes, as discussed in the Markets Overview

section on pages 10 and 11. The Directors’ assessment

of the market is that there is considerable opportunity,

and any risks identified are managed by the Group’s risk

strategy and are not considered to be a material risk to

the Group’s viability over the next three years.

The Group has a strong balance sheet, access to financial

resources and long-term growth prospects. As a

consequence, the Directors believe that the Group is well

placed to manage its business risks successfully.

Even in the worst case scenarios considered plausible by

the Directors, the cost reduction actions available to the

Group, the reduction of non-essential capital expenditure

and the management of working capital are expected

to be effective and sufficient to ensure the continued

viability of the Group.

After making enquiries, the Directors have formed

a judgement, at the time of approving the financial

statements, that there is a reasonable expectation

that the Group has adequate resources to continue in

operational existence and meet its liabilities as they fall

due over the assessment period. For this reason, the

Directors continue to adopt the going concern basis in

preparing the financial statements. At the same time,

the Directors also considered the appropriateness of

adopting the going concern basis of accounting in

preparing the financial statements and the Directors’

identification of any material uncertainties to the Group’s

and the Parent Company’s ability to continue to do so

over a period of at least 12 months from the date of

approval of the financial statements.

This Strategic Report has been approved by the Board

and signed by order of the Board:

Paul Cuff

Co-Chief Executive Officer

18 June 2025

Ben Bramhall

Co-Chief Executive Officer

18 June 2025

Viability statement

XPS Pensions Group plc Annual Report and Accounts 2025

At the Company’s Annual General Meeting in September

2025, I will be stepping down as Chairman in line with

the Corporate Governance Code’s recommendation

that a director’s tenure should not exceed nine years.

Ijoined the Board just before the Company’s admission

to the London Stock Exchange’s Main Market in February

2017. Ihave, therefore, witnessed first hand XPS’s

transformation into a leading independent pensions

consulting and administration business, the shares of

which now trade onthe FTSE 250 Index.

Growing responsibly

While our financial metrics have been transformed,

our commitment to being a responsible business with

high corporate governance standards has remained

constant throughout. As XPS expands into the Insurance

Consulting market, the Board, under the chairmanship

of Martin Sutherland, will continue to provide oversight

and guidance so that all stakeholders’ interests are

safeguarded. In line with this, work is already advanced

to ensure the Group complies with the UK Corporate

Governance Code 2024, specifically Provision 29 which

relates to directors’ declarations on risk management

andinternal controls.

Chairman’s introduction

Corporate governance that supports growth

Our focus on being a responsible business underpins everything we do.

Alan Bannatyne

Chairman

Strong governance is the foundation

that accelerates sustainable growth

and investor confidence; through

accountability, transparency

and results.”

Committed professionals

I am not the only Board member reaching nine years’

service in 2026. So too is Margaret Snowdon OBE who

will step down from the Board in due course. Ahead

of this, Imogen Joss, who joined as Independent

Non-Executive Director in December 2023, has taken

over as Senior Independent Director and Chair of the

Remuneration Committee. Like Martin, Imogen has

gained a strong understanding of the Group since her

appointment to the Board and has recently conducted

aconsultation exercise on executive remuneration with

the Group’s ten largest shareholders.

I would like to extend my thanks to all my colleagues

at XPS, both past and present. It has been a pleasure

to work with such committed, knowledgeable and

supportive professionals. XPS’s success is down to its

people, and I look forward to following their, and the

Group’s, progress in the future.

The following report outlines how the Company has

applied the main principles of the UK Corporate

Governance Code 2018 (the “Code”), and how it has

complied with all relevant provisions of the Code during

the reporting period.

Alan Bannatyne

Chairman

18 June 2025

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Statement of compliance with the UKCorporate Governance Code 2018

In FY 2025, the Company has applied the principles

and complied with the provisions of the UK Corporate

Governance Code 2018. The Code is publicly available at

www.frc.org.uk.

Further information on how the Company has applied

the five overarching categories of the principles can be

found on the following pages:

(i) Board leadership and Company purpose:

pages 62 to 67;

(ii) division of responsibilities: pages 65 and 66;

(iii) composition, succession and evaluation:

pages 68 to 70;

(iv) audit, risk and internal control: pages 71 to 73; and

(v) remuneration: pages 76 to 99.

Board composition

Independence

Gender

Non-Executive tenure

Age

Ethnicity

Non-Executives 67%

Executives 33%

Male 56%

Female 44%

Less than

3 years 50%

3–6 years 17%

6+ years 33%

41–50 33%

51–60 45%

61+ 22%

White 89%

Minority

ethnic group 11%

Board members’ keyskills:

Mergers and acquisitions

Risk management

Financial reporting

Workforce engagement

Prior FTSE experience

Pensions industry

Cyber security

Technology

Investor relations

Marketing

Corporate governance

Environmental and social

sustainability

Business development

Operational management

Governance at a glance

XPS Pensions Group plc Annual Report and Accounts 2025

Board of Directors

The Board is composed of nine members, consisting

of the Chairman, three Executive Directors and five

Independent Non-Executive Directors.

Alan Bannatyne Paul Cuff Ben Bramhall Snehal Shah Imogen Joss Sarah Ing Aisling Kennedy Margaret

Snowdon OBE

Martin Sutherland

Independent

Non-Executive

Chairman

Co-Chief

ExecutiveOfficer

Co-Chief

ExecutiveOfficer

Chief Financial

Officer

Senior Independent

Non-Executive

Director

Independent

Non-Executive

Director

Independent

Non-Executive

Director

Independent

Non-Executive

Director

Independent

Non-Executive

Director

Appointed: November

2022–September 2025

Appointed to Board:

January2017

Appointed: October 2016 Appointed: April 2014 Appointed: July 2019 Appointed:

September2024

Appointed to Board:

December 2023

Appointed: May 2019 Appointed: February

2023

Appointed: January 2017 Appointed:

December2023

Committee membership

Committee membership Committee membership

Committee membership

Key strengths

• Chartered accountant

• Recent and relevant

financial experience

Key experience

• Qualified with Deloitte

& Touche

• Previous Commercial

Manager of Primecom

and Financial Director

of Foresight – both

subsidiaries of Primedia

• 20+ years at Robert

Walters plc, Group

Financial Controller

2002–2007, Chief

Financial Officer

2007–2023

Current external listed

company directorships/

keyappointments

• Non-Executive Director

of Selkirk Group plc

Meetings attended

10/10

Key strengths

• Qualified actuary

with 20+ years of

experience in the

pensions industry

• Responsible for raising

the profile of XPS in

the market, generating

new business and

the Group strategy

with regard to M&A

opportunities

Key experience

• Partner at KPMG

2008–2016

• Head of KPMG London

pensions team prior to

joining XPS

Current external listed

company directorships/

keyappointments

• None

Meetings attended

10/10

Key strengths

• Qualified actuary with

25 years of experience

in the pensions

industry and Scheme

Actuary to a number of

large pension schemes

• Responsible for

the day-to-day

operation of the

business, including

provision of services

to existing clients,

and development and

implementation of the

Group’s technology

and people strategies

Key experience

• Eight years at KPMG

• 18 months leading

pricing and deal team

at Lucida, a former

bulk annuity provider

Current external listed

company directorships/

keyappointments

• None

Meetings attended

8/10

Key strengths

• Chartered accountant

with 25+ years of

experience

Key experience

• Ten years with PwC

• Senior finance roles

including Group

Financial Controller,

Head of Investor

Relations and Finance

Director for Integration

at Ladbrokes plc

2009–2017

• Interim Director

(Finance & Corporate

Governance) at

Parkdean Resorts

Ltd and Interim

Director of Finance

& Investor Relations

at Countrywide plc

2017–2019

Current external listed

company directorships/

keyappointments

• None

Meetings attended

9/10

Key strengths

• Experience working for

a range of technology

and information

services companies

Key experience

• Senior Independent

Director of Gresham

Technologies plc until

2020

• Senior Independent

Non-Executive

Director of Fintel plc

until 2025

Current external listed

company directorships/

keyappointments

• Chair of Grant

Thornton UK LLP

since 2021, where she

was previously Non-

Executive Director

from 2017 to 2021

• Chair of Envetec

Sustainable

Technologies since

2024, where she was

previously Non-

Executive Director

from 2022–2024

• Non-Executive

Director of SThree plc

since 2022

• Non-Executive

Director of IPSX since

2017, where she chairs

the Remuneration

Committee

Meetings attended

9/10

Key strengths

• Chartered accountant

• 30+ years of

experience in financial

services including audit,

corporate finance,

investment banking and

asset management

Key experience

• Previously a top-

rated equity research

analyst covering the

UK general financial

services sector and

also founded and ran a

hedge fund investment

management business

• Non-Executive Director

of Gresham House plc

until December 2023,

where she chaired the

Audit Committee

Current external listed

company directorships/

keyappointments

• Senior Independent

Non-Executive Director

of Marex Group since

July 2021 where she

chairs the Audit &

Compliance Committee

• Non-Executive Director

of CMC Markets plc

since September

2017, where she chairs

the Remuneration

Committee

• Non-Executive Director

of City of London

Investment Group

plc, where she chairs

the Remuneration

Committee

Meetings attended

10/10

Key strengths

• Irish qualified actuary

with experience across

consulting, insurance

companies and

professional bodies

Key experience

• Head of Life & Health

Pricing UK at Swiss Re

until 2020

• Previous Non-Executive

Director of Authora

Ireland plc where

she chaired the Risk

Committee

Current external listed

company directorships/

key appointments

• Non-Executive Director

of State Street Fund

Services (Ireland) since

2021, where she chairs

the Audit Committee

• Chair of ECCU

Assurance Company

since 2023

• Non-Executive Director

of White Horse Insurance

Ireland since 2021

• Chair of the Irish

Auditing and

Accounting Supervisory

Authority since 2024,

where she has served as

a Director since 2020

• Chair of Irish charity

MABS Support CLG

• Non-Executive Director

of Everest Managing

Agency Ltd since

February 2025

Meetings attended

10/10

Key strengths

• 40+ years of

experience in the

pensions industry and

12 years in insurance

Key experience

• Partner and director

level positions with

leading employee

benefit consultancies

• Previous Non-

Executive Director of

The Pensions Regulator

• Appointed an OBE

in 2010 and received

many awards for her

contribution to pensions

• Previous Advisory

Board member of

Moneyhub Financial

Technology Limited

Current external listed

company directorships/

keyappointments

• Non-Executive

member of Phoenix

Group With-Profits

Committee

• Chair of Pension Scams

Industry Group

• Immediate past

President of

the Pensions

Administration

Standards Association

• Co-Chair of Investment

Fraud Committee

of the All Party

Parliamentary Group

on Investment Fraud

and Fairer Financial

Services

Meetings attended

10/10

Key strengths

• Delivering growth in

services and consulting

businesses through

product innovation,

market diversification

and geographical

expansion

• Extensive international

experience at senior

management and

director level

Key experience

• Chief Executive Officer

of Reliance Cyber Ltd

2020–2023

• Chief Executive Officer

of De La Rue plc

2014–2019

• Managing Director of

Detica Ltd 2008–2014

• Non-Executive

Director of Alliance

Pharmaceuticals Ltd

until 2025

Current external listed

company directorships/

keyappointments

• Chair of Logiq Ltd since

2023

• Non-Executive Director

of Forterra plc since

2017

• Advisory Board

Member of G3

Meetings attended

9/10

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Key to Committee membership

Chair

Member

Audit & Risk

Remuneration

Nomination

Sustainability

Alan Bannatyne Paul Cuff Ben Bramhall Snehal Shah Imogen Joss Sarah Ing Aisling Kennedy Margaret

Snowdon OBE

Martin Sutherland

Independent

Non-Executive

Chairman

Co-Chief

ExecutiveOfficer

Co-Chief

ExecutiveOfficer

Chief Financial

Officer

Senior Independent

Non-Executive

Director

Independent

Non-Executive

Director

Independent

Non-Executive

Director

Independent

Non-Executive

Director

Independent

Non-Executive

Director

Appointed: November

2022–September 2025

Appointed to Board:

January2017

Appointed: October 2016 Appointed: April 2014 Appointed: July 2019 Appointed:

September2024

Appointed to Board:

December 2023

Appointed: May 2019 Appointed: February

2023

Appointed: January 2017 Appointed:

December2023

Committee membership

Committee membership Committee membership

Committee membership

Key strengths

• Chartered accountant

• Recent and relevant

financial experience

Key experience

• Qualified with Deloitte

& Touche

• Previous Commercial

Manager of Primecom

and Financial Director

of Foresight – both

subsidiaries of Primedia

• 20+ years at Robert

Walters plc, Group

Financial Controller

2002–2007, Chief

Financial Officer

2007–2023

Current external listed

company directorships/

keyappointments

• Non-Executive Director

of Selkirk Group plc

Meetings attended

10/10

Key strengths

• Qualified actuary

with 20+ years of

experience in the

pensions industry

• Responsible for raising

the profile of XPS in

the market, generating

new business and

the Group strategy

with regard to M&A

opportunities

Key experience

• Partner at KPMG

2008–2016

• Head of KPMG London

pensions team prior to

joining XPS

Current external listed

company directorships/

keyappointments

• None

Meetings attended

10/10

Key strengths

• Qualified actuary with

25 years of experience

in the pensions

industry and Scheme

Actuary to a number of

large pension schemes

• Responsible for

the day-to-day

operation of the

business, including

provision of services

to existing clients,

and development and

implementation of the

Group’s technology

and people strategies

Key experience

• Eight years at KPMG

• 18 months leading

pricing and deal team

at Lucida, a former

bulk annuity provider

Current external listed

company directorships/

keyappointments

• None

Meetings attended

8/10

Key strengths

• Chartered accountant

with 25+ years of

experience

Key experience

• Ten years with PwC

• Senior finance roles

including Group

Financial Controller,

Head of Investor

Relations and Finance

Director for Integration

at Ladbrokes plc

2009–2017

• Interim Director

(Finance & Corporate

Governance) at

Parkdean Resorts

Ltd and Interim

Director of Finance

& Investor Relations

at Countrywide plc

2017–2019

Current external listed

company directorships/

keyappointments

• None

Meetings attended

9/10

Key strengths

• Experience working for

a range of technology

and information

services companies

Key experience

• Senior Independent

Director of Gresham

Technologies plc until

2020

• Senior Independent

Non-Executive

Director of Fintel plc

until 2025

Current external listed

company directorships/

keyappointments

• Chair of Grant

Thornton UK LLP

since 2021, where she

was previously Non-

Executive Director

from 2017 to 2021

• Chair of Envetec

Sustainable

Technologies since

2024, where she was

previously Non-

Executive Director

from 2022–2024

• Non-Executive

Director of SThree plc

since 2022

• Non-Executive

Director of IPSX since

2017, where she chairs

the Remuneration

Committee

Meetings attended

9/10

Key strengths

• Chartered accountant

• 30+ years of

experience in financial

services including audit,

corporate finance,

investment banking and

asset management

Key experience

• Previously a top-

rated equity research

analyst covering the

UK general financial

services sector and

also founded and ran a

hedge fund investment

management business

• Non-Executive Director

of Gresham House plc

until December 2023,

where she chaired the

Audit Committee

Current external listed

company directorships/

keyappointments

• Senior Independent

Non-Executive Director

of Marex Group since

July 2021 where she

chairs the Audit &

Compliance Committee

• Non-Executive Director

of CMC Markets plc

since September

2017, where she chairs

the Remuneration

Committee

• Non-Executive Director

of City of London

Investment Group

plc, where she chairs

the Remuneration

Committee

Meetings attended

10/10

Key strengths

• Irish qualified actuary

with experience across

consulting, insurance

companies and

professional bodies

Key experience

• Head of Life & Health

Pricing UK at Swiss Re

until 2020

• Previous Non-Executive

Director of Authora

Ireland plc where

she chaired the Risk

Committee

Current external listed

company directorships/

key appointments

• Non-Executive Director

of State Street Fund

Services (Ireland) since

2021, where she chairs

the Audit Committee

• Chair of ECCU

Assurance Company

since 2023

• Non-Executive Director

of White Horse Insurance

Ireland since 2021

• Chair of the Irish

Auditing and

Accounting Supervisory

Authority since 2024,

where she has served as

a Director since 2020

• Chair of Irish charity

MABS Support CLG

• Non-Executive Director

of Everest Managing

Agency Ltd since

February 2025

Meetings attended

10/10

Key strengths

• 40+ years of

experience in the

pensions industry and

12 years in insurance

Key experience

• Partner and director

level positions with

leading employee

benefit consultancies

• Previous Non-

Executive Director of

The Pensions Regulator

• Appointed an OBE

in 2010 and received

many awards for her

contribution to pensions

• Previous Advisory

Board member of

Moneyhub Financial

Technology Limited

Current external listed

company directorships/

keyappointments

• Non-Executive

member of Phoenix

Group With-Profits

Committee

• Chair of Pension Scams

Industry Group

• Immediate past

President of

the Pensions

Administration

Standards Association

• Co-Chair of Investment

Fraud Committee

of the All Party

Parliamentary Group

on Investment Fraud

and Fairer Financial

Services

Meetings attended

10/10

Key strengths

• Delivering growth in

services and consulting

businesses through

product innovation,

market diversification

and geographical

expansion

• Extensive international

experience at senior

management and

director level

Key experience

• Chief Executive Officer

of Reliance Cyber Ltd

2020–2023

• Chief Executive Officer

of De La Rue plc

2014–2019

• Managing Director of

Detica Ltd 2008–2014

• Non-Executive

Director of Alliance

Pharmaceuticals Ltd

until 2025

Current external listed

company directorships/

keyappointments

• Chair of Logiq Ltd since

2023

• Non-Executive Director

of Forterra plc since

2017

• Advisory Board

Member of G3

Meetings attended

9/10

XPS Pensions Group plc Annual Report and Accounts 2025

Board and Committee composition and operation

The Company complied with the provision of the UK

Corporate Governance Code 2018 which requires at

least half of the board, excluding the chairman, to be

independent non-executive directors. The new UK

Corporate Governance Code 2024 will apply to XPS from

FY 2026 and we will report on our compliance with the

new Code within our next Annual Report and Accounts.

The Board considers that the Chairman, Alan Bannatyne,

Senior Independent Director, Imogen Joss, and Non-

Executive Directors, Margaret Snowdon OBE, Sarah

Ing, Aisling Kennedy and Martin Sutherland, are each

independent of management in character, judgement and

opinion and are free from relationships or circumstances

that could affect their judgement. The Board benefits

from the wide experience of its Non-Executive Directors.

Biographical details of all Board members are given on

pages 62 and 63.

Board Committees

The Audit & Risk Committee’s role is to assist the Board

in discharging its oversight responsibilities by reviewing

and monitoring the following: the integrity of the financial

information provided to shareholders; the effectiveness

of the Company’s system of internal controls and risk

management; the external audit process and auditor;

andthe processes for compliance with laws, regulations

and ethical codes of practice.

Further details are given in the Audit & Risk Committee Report

onpages 71 to 73

The role of the Remuneration Committee is to assist

the Board to fulfil its responsibility to shareholders to

ensure that the Remuneration Policy and practices of

the Company reward fairly and responsibly, with a clear

link to corporate and individual performance, having

regard to sustainability and statutory and regulatory

requirements. The Committee recommends the policy

the Board should adopt on executive remuneration

and, within the terms of the Directors’ Remuneration

Policy approved by shareholders at the AGM in March

2024, determines and agrees with the Board the levels

of remuneration for each of the Executive Directors, the

Company Chairman, the Group’s Executive Committee

and the Company Secretary.

Further details are given in the Remuneration Report on pages 76

to 99

The role of the Nomination Committee is to undertake

a bi-annual review of succession planning for non-

executive, executive and other key roles; and ensure that

the membership, composition and diversity of the Board

and its Committees, including the balance of skills, remain

appropriate. The Committee also reviews the outcome of

the annual Board effectiveness review to determine any

changes required.

Further details are given in the Nomination Committee Report on

pages 68 to 70

The role of the Sustainability Committee is to support

the Board’s oversight responsibilities of the Company’s

environmental, social and governance impact and

initiatives. The Committee oversees practices, reporting

and communication in relation to factors that have

a material impact on business strategy, business

performance and the long-term sustainability of

the Group.

Further details are given in the Sustainability Committee Report on

pages 74 and 75

Written terms of reference for each Committee are

subject to annual review and periodic updating to reflect

any changes in legislation, regulation or best practice. The

terms of reference for the Committees are available on

the Company’s website at www.xpsgroup.com/investors/

corporate-governance/committees/.

The Company complies with the Code provisions that

as a UK listed company the remuneration and audit

committees should comprise at least three independent

non-executive directors and that the nomination

committee should comprise a majority of independent

directors. The Company Chairman is not a member

of the Audit & Risk Committee, in compliance with

the Code. Each Chair reports on the business of their

previous Committee meeting at the next scheduled

Board meeting.

Executive Committee

The Co-Chief Executive Officers operate an Executive

Committee to support them in the performance of their

duties, including the development and implementation of

strategy and the day-to-day operational management of

the business. During the year the Committee comprised

the Executive Directors, Chief Information Officer, Head

of Advisory, Managing Director of Administration, Head of

Investment, General Counsel and HR Director.

Board operation and meetings

Decisions on operational matters are delegated by the

Board to the Executive Directors, consistent with the

schedule of matters reserved for Board approval. In

advance of scheduled Board meetings, each Director

receives documentation providing updates on Group

strategy, finances, operations and business development.

The Board meets at least seven times a year and at

other times as and when necessary. During the year,

all Board meetings were attended by all Directors, with

the exception of meetings when prior commitments

prevented attendance.

The Board reviews the business strategy for the year

ahead at the beginning of each financial year and

receives strategy updates at each Board meeting. At

least once a year the Board will hold a strategy session

to discuss and review business strategy in depth. The

Directors are expected to attend all meetings of the

Board and any Committees of which they are members,

and to devote sufficient time to the Company’s affairs to

fulfil their duties as Directors. Non-Executive Directors

are each required to commit to a minimum of 28 days of

service per year to the Company. The Board is satisfied

that each Non-Executive Director commits sufficient time

to the Company.

The Non-Executive Directors remain in regular contact

with the Chairman, whether in face-to-face meetings

or by telephone, to discuss matters relating to the

Company and on occasion meet without the Executive

Directors present.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

If a Director is unable to attend a meeting, they will still

receive Board papers before the meeting and they are

encouraged to submit any comments to the Chairman

or Company Secretary to ensure that their views are

recorded and taken into account during the meeting.

The Director will also receive the minutes and matters

arising in the usual way in order to ensure that they are

fully informed.

The Board is ultimately responsible for the effectiveness

and monitoring of the Group’s system of internal controls.

The Audit & Risk Committee’s role is to assist the

Board with its oversight responsibility by reviewing and

monitoring the Company’s system of internal controls. It

met three times in the financial year and at its meeting

in June 2025 considered the internal controls assurance

framework used during the financial year, concluding that

it was sound and appropriate for the business.

Directors are reminded at the commencement of each

meeting to notify the Board of any conflicts of interest.

Any actual or potential conflicts of Directors with the

interests of the Company that arise must be disclosed

for consideration and, if appropriate, authorisation by

the Board in accordance with the Company’s Articles

of Association. The Board may authorise conflicts and

potential conflicts, as long as the potentially conflicted

Director is not counted in the meeting quorum and does

not vote on the resolution to authorise. Directors are

required to notify the Group Chairman when a conflict

or potential conflict does arise in order that Board

authorisation can be considered. If the Board determines

that a conflict or potential conflict can be authorised, it may

impose additional conditions on the Director concerned.

A formal induction programme has been developed

and tailored for any new Directors joining the Board.

The Chairman, with the support of the Company

Secretary, ensures that the development and ongoing

training needs of individual Directors and the Board as

a whole are reviewed and agreed following the annual

performance evaluation of the Board, its Committees

andindividual Directors.

Directors may seek independent professional advice

at the Company’s expense where they consider it

appropriate in relation to their duties. All Directors

have access to the advice and services of the Company

Secretary.

Embedding culture

At XPS, our values are embedded in everything we

do. The Board recognises the importance of its role in

setting the tone and monitoring the Group’s culture,

championing the behaviours we expect to see and

embedding these throughout the Group. In addition

to the Board, the Executive Committee upholds our

values and ensures that the importance of compliance

and integrity is recognised at all levels throughout the

Group. During the year, the Group undertook a culture

audit, to ensure that the desired culture was embedded

throughout the business. The audit included review

of various sources of information, including direct

feedback to the Group ExCo, EEG minutes, Safe Space

submissions, whistleblowing reports, employee attrition

rates, employee exit survey responses and the employee

survey. The output was reported to the Board and there

were no areas of concern highlighted.

Division of responsibilities

The Board is focused on providing entrepreneurial and

sustainable leadership to the Group. It is responsible

for directing and controlling the Group and has overall

authority for the effective and prudent management and

conduct of the Group’s business and the Group’s strategy

and development. The Board monitors performance and

is responsible for ensuring that appropriate financial and

human resources are in place for the Group to meet its

objectives and takes the lead in setting and embedding

the Group’s culture, values and standards. The Board

is also responsible for ensuring the maintenance of a

sound system of internal control and risk management

(including financial, operational and compliance controls,

and for reviewing the overall effectiveness of systems in

place), and for the approval of any changes to the capital,

corporate or management structure of the Group.

There is a formal schedule of matters reserved for Board approval

which is subject to annual review and published on the Company’s

website: www.xpsgroup.com

The matters reserved for the Board include:

• the Group’s long-term objectives, business strategy

andrisk appetite;

• the Company’s policies, culture, values and standards;

• annual business plans, budgets and forecasts;

• extension of the Group’s activities into new business

orgeographic areas;

• changes in capital structure and any form of

fundraising or asset securitisation;

• major changes to the corporate structure, including

material acquisitions and disposals;

• interim and annual financial statements and

dividend policy;

• material guarantees, indemnities and letters of comfort;

• the Group’s system of internal control and risk

management;

• contracts which are material strategically or by reason

of size or duration;

• calling of shareholder meetings and related

documentation;

• changes to the membership of the Board and its

Committees;

• Remuneration Policy for the Directors and senior

management;

• introduction of new share incentive plans or major

changes to existing plans; and

• the Company’s overall corporate governance

arrangements.

XPS Pensions Group plc Annual Report and Accounts 2025

Board division of responsibilities

Paul Cuff

Ben Bramhall

Imogen Joss

Alan Bannatyne

Board and Committee composition and operation continued

Alan Bannatyne

Chairman

• Leads the Board and manages the effective

leadership and governance of the Board

• Provides direction and focus on business

strategy, performance, value creation

andaccountability

• Ensures the Board establishes a strategy that

facilitates the entrepreneurial development

of the Group and promotes the long-term

sustainable success of the Group’s approach

• Ensures clear structure for effective operation

of the Board and its Committees

• Sets Board agenda and ensures sufficient time

is allocated to promote effective debate to

support sound decision making

• Ensures the Board receives precise, timely and

clear information

• Encourages Directors to contribute fully to

Board discussions, ensuring sufficient challenge

of major proposals

• Meets with the Non-Executive Directors

independently of the Executive Directors

• Leads the process for evaluating the

performance and development needs of the

Board, its Committees and individual Directors

• Leads the Board succession planning process

and chairs the Nomination Committee

• Acts as a sounding board for the Co-CEOs on

important business issues

• Ensures the Board sets the risk appetite it is

willing to take in the implementation of strategy

• Ensures effective communication with

shareholders to ensure that the Board

understands their views on governance and

performance against the strategy

• Ensures effective communication with other

keystakeholders

Paul Cuff

Co-Chief Executive Officer

• Primarily responsible for raising the profile

of XPS in the market and generating new

business, both in traditional service areas and

in the development of new services as the

market evolves

• Develops the Group’s strategy with regard to

M&A opportunities and technology investment

Ben Bramhall

Co-Chief Executive Officer

• Primarily responsible for the day-to-day

operation of the business, including the

provision of services to existing clients, revenue

generation and the Group’s people strategy

• Develops the Group’s internal strategy to

pursue large opportunities within the market

• The Board considers that the Co-CEO structure

works well with clear accountability of roles

between the Executive Directors

Imogen Joss

Senior Independent

Non-Executive Director

• Acts as a sounding board for the Chairman

andother Directors

• Leads the annual review of the Chairman’s

performance

• Leads any Non-Executive Director meetings

without the Chairman present

• Acts as an additional point of contact for

shareholders, if they have concerns that

contact through the normal channels have

failed to resolve or for which such contact

isinappropriate

Co-Chief Executive Officers

• The Co-CEOs have worked together for over

20 years, having both started their careers as

trainee actuaries at Punter Southall, before

spending many years in the same team at KPMG

• Their long friendship and history of working

together, and their complementary skill sets,

make the Co-CEO arrangement a success

• The Co-CEOs report to the Chairman and the

Board and are responsible for jointly leading

the Group’s business and managing it in

accordance with the business plan approved

by the Board, the Board’s overall risk appetite,

the Group policies approved by the Board and

its delegated authorities, and all applicable laws

and regulations

• The Co-CEOs, with the support of the CFO,

recommend budgets and forecasts for Board

approval, lead the investor relations programme

and maintain a dialogue with the Chairman

onsignificant business developments and

strategy issues

• Both Co-CEOs have leadership roles on

largeclients

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Annual General Meeting

The Company’s Annual General Meeting (AGM) will take

place at 12.00pm on Thursday 4 September 2025 at

Canaccord, 88 Wood Street, Barbican, London EC2V

7QR. The AGM notice setting out the resolutions to be

proposed at the meeting and including explanatory notes,

together with this Annual Report and Accounts, will be

available on the Company’s website (www.xpsgroup.com)

and distributed to shareholders who have elected to

receive hard copies of shareholder information at least

20working days prior to the date of the meeting.

Voting at the AGM will be conducted by way of a poll

and the results will be announced through the London

Stock Exchange Regulatory News Service and made

available on the Company’s website. All Board members

are expected to attend the meeting and the Chair of each

of the Board’s Committees will be present to answer any

questions put to them by shareholders.

Board evaluation

The Board acknowledges that the Code requires

an external board evaluation be completed every

three years. The latest external Board evaluation was

completed in 2023, facilitated by Ceradas Limited.

Ceradas Limited has no other connections to the

Company or the Directors. The next externally facilitated

Board evaluation will be completed in 2026.

In 2025, the Board completed an internally facilitated

evaluation, using questionnaires agreed by the Chairman

and Company Secretary. The Senior Independent

Director met with each Board member to appraise

the performance of the Chairman, and fed back to the

Chairman and the incoming Chairman in May 2025. The

Board discussed the outcome of the evaluation at the

May 2025 Board meeting, and agreed actions as follows:

• the incoming Chairman to focus on ensuring

that emphasis is on the right KPIs and issues at

Board meetings;

• the Chairman and Company Secretary to revisit

the Non-Executive Director induction and ongoing

training plan to ensure this represents the Group’s

diversification; and

• the Nomination Committee to focus on improved

succession planning for Executive and key roles,

including the development of future leaders of

the Group.

2024 Board evaluation outcomes and progress

The 2024 internally facilitated evaluation identified the following areas for improvement; progress is reported

as follows:

Actions from the 2024 evaluation Improvements

The Remuneration Committee to receive increased

internal support from the HR function.

During the year, the Remuneration Committee Chair

change resulted in a revised approach to the support of the

Committee; the Group’s Remuneration Consultants (FIT)

have increased their support to the Committee.

The Nomination Committee to agree the best way

to ensuresmooth transition when the Chairman and

Senior Independent Director reach nine years’ tenure in

January2026.

The Nomination Committee agreed that succession of

the Senior Independent Director would be accelerated

to allow for the newly appointed Senior Independent

Director to lead the Chairman succession process, as

both the Chairman and Senior Independent Director

were due to reach nine years’ tenure at the same time.

Imogen Joss was appointed as Senior Independent

Director in September 2024. The Group Chairman,

Alan Bannatyne, will not stand for re-election at the

AGM in September 2025, and current Non-Executive

Director Martin Sutherland will succeed Alan as

Chairman following the AGM. Margaret Snowdon OBE

will step down from the Board in due course, and the

Nomination Committee will consider the recruitment of

an additional Non-Executive Director.

The Sustainability Committee to report formally to the

Boardannually.

All Board members were invited and encouraged to

attend the May 2025 Sustainability Committee meeting

and will be invited annually going forward.

Committee membership Attendance

Chair

Alan Bannatyne 3/3

Members

Margaret Snowdon OBE 4/4

Sarah Ing 4/4

Aisling Kennedy 4/4

Imogen Joss 2/2

Martin Sutherland 1/1

Alan Bannatyne

Chair of the Nomination

Committee

XPS Pensions Group plc Annual Report and Accounts 2025

Nomination Committee

This year the Committee supported the Board through the

succession of the Senior Independent Non-Executive Director

and future succession of the Chairman.

Dear Shareholder,

I am pleased to present my final report as Chairman

of XPS Group and the Nomination Committee for the

year ended 31 March 2025. The Committee has met four

times during FY 2025 and all meetings were attended

by all members of the Committee, with the exception of

one meeting which Martin and I did not attend due to

a conflict of interest, as Chairman succession was the

focus. The Committee intends to continue to meet at

least twice annually with additional meetings as required.

The members of the Committee are Margaret Snowdon

OBE, Sarah Ing, Aisling Kennedy, Imogen Joss, Martin

Sutherland and myself as Chair.

The Nomination Committee supports the Board in

determining the composition and make-up of the Board,

including its skills, knowledge, experience and diversity.

It is responsible for developing and maintaining a formal,

rigorous and transparent procedure for identifying

appropriate candidates for Board appointments and

making recommendations to the Board.

The Committee is also responsible for keeping under

review the leadership needs of the Group, including

Executive, Non-Executive and senior management

roles, ensuring that succession planning focuses on the

continued ability of the Group to deliver its strategic

goals and compete effectively. The terms of reference of

the Committee are reviewed annually and available on the

Company’s website, www.xpsgroup.com.

Shaping leadership for the future

Chairman and Senior Independent Non-Executive

Director succession

This will be my final report, as I will step down as Group

Chairman and Chair of the Nomination Committee at

the Company’s next AGM in September 2025. As I have

served as a Director since 2017, and as Chairman since

2022, I would reach nine years’ tenure on the Board in

January 2026. The Nomination Committee has identified

my successor as Martin Sutherland, who will take over

the role of Chairman, and Chair of this Committee, as of

the AGM, following a handover period over the coming

months. Martin joined the Board in December 2023 and

has developed a strong understanding of our business,

our market and our culture; he is well placed to take on

the Chairman role at XPS.

Margaret Snowdon OBE will also reach nine years’ tenure

in January 2026 and will be stepping down from the

Board in due course. Ahead of Margaret stepping down,

the Committee determined that it was appropriate for

Margaret to hand over the Senior Independent Director

role to allow for the incoming Senior Independent Director

to lead the Committee through the Chairman succession

process. Imogen Joss succeeded Margaret Snowdon

as Senior Independent Director in September 2024.

Margaret remains an Independent Non-Executive Director

of the Group, and the timing of her stepping down will

be confirmed following the recruitment of an additional

Non-Executive Director; the search for an additional Non-

Executive Director will commence later this year.

TheCommittee is satisfied that the Board and its

Committees have the right balance of skills, experience,

independence and knowledge required.

Board evaluation

During the year, an internally facilitated Board evaluation

was completed; further details of the process and

the outcomes can be found on page 67. The Group

conducted an externally facilitated Board evaluation

supported by Ceradas Limited in 2023 and will continue

to conduct an externally facilitated evaluation every three

years going forward as required by the UK Corporate

Governance Code. The next evaluation in 2026 will be

conducted with external support.

Succession planning

During the year, the Nomination Committee reviewed

detailed succession plans covering the roles considered

key to the business, including those of the Executive

Directors, the Non-Executive Directors and the Executive

Committee. The Committee is satisfied that the contingency

and talent management plans in place for key positions are

appropriate and has agreed that the Group’s succession

planning will be kept under review, atleast bi-annually.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Chairman and Senior Independent Director

succession process

• In line with succession planning, the Nomination

Committee identified that Alan Bannatyne and

Margaret Snowdon OBE would reach nine years’

tenure in January 2026.

• The Nomination Committee commenced a search

for potential successors to the Senior Independent

Director and Chairman; the search was supported

by Russell Reynolds Associates.

• Martin Sutherland and Imogen Joss were appointed

to the Board as Independent Non-Executive

Directors, and as potential successors to the two

roles, in December 2023.

• The Committee determined that it would be good

governance to ensure that the Group’s Senior

Independent Director and Chairman did not

leave the business at the same time, and as such

appointed Imogen Joss as Senior Independent

Director in September 2024, with Margaret

Snowdon OBE remaining as a valued independent

Board member.

• Imogen Joss led the Nomination Committee

throughout the Chairman succession process.

• The Committee considered the desired criteria

for the Chairman role, and confirmed that Martin

Sutherland satisfied this criteria and would be the

right candidate to take on the role.

• The Nomination Committee made a recommendation

to the Board that Martin Sutherland be appointed as

Independent Non-Executive Chairman of the Group.

The Board approved the recommendation.

• Martin Sutherland will succeed Alan Bannatyne

as Chairman from 4 September 2025. A handover

process has commenced.

Induction programme and training

A formal tailored induction for Non-Executive Directors

is in place supported by a programme of training to

further their knowledge of the Group, its business, culture,

operations, employees and governance and to ensure

awareness of their regulatory duties and obligations as a

Director of a UK listed company.

Diversity, equality and inclusion

I am pleased to confirm that XPS continues to comply

with the requirements of the FCA’s diversity listing rules

in relation to the composition of the Board, with over 40%

female representation (44%), one senior position held by

a female and one member to be from an ethnic minority

background. Whilst we recognise that XPS has further

progress to make in relation to the diversity of our Board

and executive management, we are pleased to have

made progress in recent years and continue reporting

compliance with the listing rules.

The Company has an established Inclusion and Diversity

Committee chaired by a senior female within the Group. The

committee has made great progress, has a significant impact

across the business and is a key channel of communication

and engagement for employees and management.

The Company acknowledges that there remains a gender

pay gap within the business which reflects a higher

proportion of males in higher-paid roles than females.

Whilst this is partly a challenge of the UK industry in

which XPS operates, within a male-dominated actuarial

profession, the Board believes it has a responsibility

to promote change, both within XPS and the industry

moregenerally.

The Board believes that no individual should be

discriminated against, whether for reasons of gender,

ethnicity or other grounds that restrict social inclusion, and

this extends to Board appointments, which it considers

should be made on merit and on the basis of ensuring an

appropriate balance of skills and experience within the

Board. The Board recognises that greater diversity, in the

widest sense of diversity of race, experience and approach,

can generate a more diverse perspective on issues which,

in turn, has the ability to benefit Board effectiveness

through improved discussions and better decisions.

You can read more about the Group’s I&D strategy and

commitment to further progress on page 28 of our

Sustainability Report.

Alan Bannatyne

Chair of the Nomination Committee

18 June 2025

XPS Pensions Group plc Annual Report and Accounts 2025

Nomination Committee continued

Diversity, equality and inclusion continued

Table 1. Reporting table on sex/gender representation as at 31 March 2025

Number

of Board

members

Percentage

of the

Board

Number

of senior

positions

on the Board

(CEO, CFO,

SID and

Chairman)

Number in

executive

management

Percentage

of executive

management

Men 5 56% 4 7 78%

Women 4 44% 1 2 22%

Not specified/prefer not to say — — — — —

Table 2. Reporting table on ethnicity representation as at 31 March 2025

Number

of Board

members

Percentage

of the

Board

Number

of senior

positions

on the Board

(CEO, CFO,

SID and

Chairman)

Number in

executive

management

Percentage

of executive

management

White British or other White (including minority White groups) 8 89% 4 8 89%

Mixed/multiple ethnic groups — — — — —

Asian/Asian British 1 11% 1 1 11%

Black/African/Caribbean/Black British — — — — —

Other ethnic group, including Arab — — — — —

Not specified/prefer not to say — — — — —

Executive management is defined as the XPS Executive Committee.

This data was obtained from HR data held by the Group.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Audit & Risk Committee

The Audit & Risk Committee continues to provide independent

oversight of the Group’s financial reporting procedures, risk

management and internal control framework.

Dear Shareholder,

I am pleased to present the report of the Audit & Risk

Committee for the year ended 31 March 2025. The

Committee met three times during FY 2025 and intends

to continue to meet at least three times annually.

All meetings were attended by all members of the

Committee.

Membership of the Committee

The members of the Committee are Margaret Snowdon

OBE, Aisling Kennedy, Imogen Joss, Martin Sutherland

and me. The Board is satisfied that the Audit & Risk

Committee as a whole has competence relevant to the

sector in which the Company operates and that I have

recent relevant financial experience as can be seen in

our biographies included on pages 62 and 63 of the

Annual Report.

The Executive Directors are invited to each meeting as

well as the Company’s Non-Executive Chairman, Chief

Information Officer, Head of Risk, General Counsel, Head

of Compliance, Financial Controller, and other members

of the management team as the agenda dictates.

The Committee’s performance evaluation was conducted

as part of the wider Board evaluation; you can read about

this on page 67.

Delivering independent oversight

Significant accounting matters considered during the year

Matters considered

The Group has significant intangible assets on the

balance sheet in the form of goodwill, customer

relationships, brands and software. The intangible

assetshave to be reviewed for impairment at least

annually or if there are any indicators of impairment.

Action

The carrying value of all indefinite life assets is tested

for impairment annually. In reaching its conclusion that

the treatment adopted is appropriate, the Committee

has reviewed the forecasts, key assumptions and

methodology adopted by management. BDO LLP’s

findings have also been considered by the Committee

inreaching its conclusions over the appropriateness

ofthe treatment within the financial statements.

Carrying value of goodwill and intangible assets

Committee membership Attendance

Chair

Sarah Ing 3/3

Members

Margaret Snowdon OBE 3/3

Aisling Kennedy 3/3

Imogen Joss 3/3

Martin Sutherland 3/3

Sarah Ing

Chair of the Audit & Risk

Committee

Refreshing our internal control

framework whilst navigating risk

and enabling growth has been the

Committee’s focus this year.”

Sarah Ing

Chair of the Audit & Risk Committee

XPS Pensions Group plc Annual Report and Accounts 2025

Matters considered

Depending on the income stream and the nature of the

engagement, the Group recognises revenue on either

time cost incurred, fixed fee or rateably over the period

of providing the relevant services. Billing is mainly in

arrears and occurs monthly or quarterly. A judgement

is made regarding the valuation of contract assets –

accrued income with the unbilled element of pensions,

investment and administration services.

Action

The Committee reviewed the approach to revenue

recognition including the process for accrued and

deferred revenue. The Committee receives regular

updates on ageing of accrued revenue and trade

receivables. The Committee has also considered the

conclusions reached by BDO LLP as part of its audit of

this area and is satisfied that management has adopted

appropriate processes and controls over revenue

recognition, accrued revenue and tradereceivables.

Revenue recognition, accrued income and trade receivables

Matters considered

During the year, the Group acquired Polaris

Actuariesand Consultants Ltd, a UK insurance

consultancy business.

The transaction completed on 28 February 2025

for cash consideration of £13.8 million and prepaid

post-acquisition remuneration of £9.2 million, with

an additional amount up to £35 million payable in

three years contingent on achieving certain stretching

business performance criteria. Further information

can be found in note 6 to the financial statements

on page 128.

Action

The Committee has reviewed management’s assessment

of the fair value of the assets and liabilities acquired and

of the forecasts and assumptions driving the estimate of

the post-acquisition remuneration. The Committee has

reviewed the disclosures in respect of the acquisition

and considers the accounting and disclosures to be

appropriate.

Business acquisition

Matters considered

The Group classifies certain items in the income

statement as exceptional/non-trading to allow a clearer

understanding of the underlying trading performance

ofthe business.

Exceptional and non-trading items in the year totalled

£18.6 million (FY 2024: credit of £17.5 million). For

more details see note 5 to the financial statements

on page 127.

Action

As part of its assessment that the treatment of

exceptional/non-trading items in the financial

statements is appropriate, and consistent with the

Group’s accounting policies and with the guidance

issued by the FRC, the Committee has considered each

of the items treated as exceptional/non-trading and

challenged, where necessary, the treatment adopted

by management. The Committee has also considered

the conclusions reached by BDO LLP as part of its audit

inthis area and is satisfied.

Presentation and disclosure of exceptional and non-trading items

Audit & Risk Committee continued

Significant accounting matters considered during the year continued

Auditor

The Committee is responsible for making an assessment

on the independence of the Company’s auditor, BDO

LLP. In addition, the auditor has internal processes, which

include peer reviews, to ensure that independence is

maintained. The Committee will review the level of audit

fees and non-audit fees on an ongoing basis. See note 4

to the financial statements on page 126.

The Committee has reviewed the approach to the annual

audit at a meeting that the auditor attended ahead of the

start of fieldwork. The auditor then attended a further

Committee meeting at the completion stage of the audit

to present its findings.

There is an open line of communication between the

Chair of the Audit & Risk Committee and the audit

engagement partner, and a closed session between the

Audit & Risk Committee and the audit partner is held at

the beginning of each Committee meeting, without the

Executive Directors and management team present.

The audit partner is also invited to attend the Committee

meetings for the duration of the meeting. The Committee

assessed the effectiveness of the external audit process

by obtaining feedback from parties involved in the

process, including management and the external auditor.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Based on this feedback and its own ongoing assessment,

the Committee remains satisfied with the efficiency and

effectiveness of the audit.

The Committee is responsible for making

recommendations to the Board regarding the

appointment of its external auditor and its remuneration.

BDO LLP has been the Group’s auditor since 2014. The

Group audit partner is required to rotate after a maximum

of five years; the current audit partner, Andrew Radford,

was appointed in September 2020, and therefore

must be succeeded following the FY 2025 audit. The

Committee determined that this was an appropriate time

to consider the Company’s auditor arrangement and

conduct a tender process. Following considerations of

conflicts of interest, existing relationships and capacity,

the Committee invited EY and BDO LLP to participate in

the tender process. Following a robust tender process,

the Committee decided to retain BDO LLP as the Group’s

external auditor.

Internal Audit

The Internal Audit function is provided using a co-

sourcing agreement, with PwC reappointed in 2020

after a retender as it had been in place since 2017. It

offers independent oversight of operational and risk

management activities, with audit reports and relevant

findings presented to the Committee. This year it focused

on the controls in place when developing automated

system calculations and operational controls in the

administration business.

The Internal Audit programme is integrated with the

existing framework of internal and external assurance

activities, e.g. ISO 27001, CE+, AAF 01/20, IFoA QAS,

which are carried out or facilitated by the Risk and

Compliance teams. These activities focus on the design

and effectiveness of internal controls for key processes.

Annual Report review

A final draft of the Annual Report is reviewed by the

Committee prior to consideration by the Board and the

Committee considered whether the 2025 Annual Report

was fair, balanced and understandable and whether it

provided the necessary information for shareholders to

assess the Group’s position and performance, business

model and strategy.

The Committee was satisfied that, taken as a whole, the

Annual Report is fair, balanced and understandable and

provides the necessary information.

Risk Management and internal control

The existing risk management and internal control

framework deployed across the Group continues to

be developed and enhanced to ensure it manages

existing and emerging risks to the XPS Group.

Effective communication of risk appetites and key

controls is supported by clear direction from executive

management, which drives a strong risk culture and

active engagement from staff.

The framework supports a standardised risk management

approach across all businesses and support functions in

the Group, enabling clear and consistent reporting. This

includes a clear articulation of the key controls required

to ensure risks are managed within their stated appetites.

The use of a common approach for all risk types covers

the full spectrum of the Group’s activities and supports

the achievement of the organisation’s objectives. The

framework also highlights key processes and controls,

supporting their regular review, with amendments made

as required to reflect the findings of these reviews. All

review findings are recorded centrally to ensure identified

improvements are implemented consistently across the

Group. Executive management is provided with regular

updates on the Group’s overall risk profile and actions

required to keep within appetite. This is supported by

a rolling programme of deep dives on specific risks at

the Risk Management Committee. These meetings are

held on a regular basis and support the Audit & Risk

Committee to ensure that the risk management and

internal control framework meets the needs of the

Group’s stakeholders.

The Risk function supports all businesses within the

Group, ensuring that best practice is applied consistently.

The team is also responsible for co-ordinating the

existing assurance frameworks across the Group, to

ensure all risks and controls are considered and assessed

appropriately. These assurance activities include

certifications to ISO 14001 and ISO 27001, AAF 01/20, IIP

and the IoA Quality Assurance Scheme (QAS). In addition

to these, the Group has also maintained accreditation

against the PASA pensions administration standard.

The Audit & Risk Committee regularly reviews the wider

internal control processes as part of its meeting cycle.

The Committee enlists external support from specialist

advisers to support these reviews when appropriate.

Recently, the Board reviewed the principal risks in

response to the introduction of Provision 29 in the UK

Corporate Governance Code 2024 with the support of

external advisers. The review focuses on identifying risks

that are critical to XPS as a business, supporting a risk

focused approach to identifying material controls.

To recognise the importance of operational resilience and

protection of Group and client assets from cyber risks,

the Committee considers this as a standing item at each

meeting. This includes the performance of key controls

and the independent assurance frameworks in place.

Whistleblowing

The Group has a clear, formalised Whistleblowing Policy

and procedure available to all staff in order to raise

concerns about perceived wrongdoing, non-compliance

with our own standards, regulatory requirements and/

or the law. We have a confidential helpline, run by a

third party, Expolink, in order that staff can report

any concerns or perceived shortcomings within our

operations without fear of sanction or disadvantage. The

helpline is promoted through the intranet and posters.

Incidents are reported and then reviewed by the Board

at the next scheduled meeting, or sooner if required. The

Group’s Audit & Risk Committee reviews the policy and

process annually to ensure they remain fit for purpose.

Sarah Ing

Chair of the Audit & Risk Committee

18 June 2025

XPS Pensions Group plc Annual Report and Accounts 2025

Sustainability Committee

Driving progress on sustainability

In FY 2025, XPS continued to embed its sustainability framework

“shaping a better future” across the business in support of its

purpose: shaping and supporting safe, robust and well-understood

pensions schemes for the benefit of people and society. Refreshed

in FY 2024, our framework gives us a clear direction to engage

with our stakeholders – from our people and communities to our

clients, members and environment.

This year, the Committee has focused on

building on the excellent progress of the

last few years. Sustainability is, and will

continue to be, a key consideration in

the Group’s business strategy and a vital

way in which the views and interests of

key stakeholders are integrated.”

Aisling Kennedy

Chair of the Sustainability Committee

Dear Shareholder,

It is my pleasure to present the report of the

Sustainability Committee for the year ended 31 March

2025 – for the first time as Chair. The Committee met four

times during the year and all meetings were attended by

all members of the Committee. The Committee intends to

continue to meet at least twice annually with additional

meetings as required.

The Sustainability Committee considers the perspectives

and interests of all key internal and external stakeholders

of the Group. Its remit is to oversee the implementation

ofthe sustainability framework with the help of

representatives from the business and to enhance

reporting and communication regarding sustainability

factors that drive the Group’s business strategy

andperformance.

The membership of the Committee

The members of the Committee during the year were

Sarah Ing (Independent Non-Executive Director), Imogen

Joss (Senior Independent Non-Executive Director),

Snehal Shah (CFO), Charlotte West (Head of Employee

Engagement), Adrian Davison (Head of Risk), Alex

Quant (Head of ESG for the Investment business), and

myself as Chair. I took over as Chair of the Committee

from Sarah Ing at the start of the year. During the year,

Margaret Snowdon OBE stood down as a member of

theCommittee.

The focus of the Committee

In 2024, the Committee tracked performance against the

Group’s key sustainability pillars: our people, our clients

and members, our communities and our environment.

Itswork plan included the following focus areas:

1. Monitoring performance on sustainability priorities

The dynamic materiality assessment carried out in FY

2024 and the strengthened sustainability framework

launched in last year’s Annual Report ensure that

the Group’s approach remains relevant to its key

stakeholders. This year, the Committee focused on

monitoring and, where needed, steering performance to

ensure the Group made progress against its priorities.

As part of this, the Committee introduced a “sustainability

dashboard” to track key performance metrics against

our pillars each quarter. We track two to three metrics

for each pillar on a quarterly basis, with progress being

assessed at each Committee meeting. The dashboard

has made a valuable contribution to the Committee

overseeing and steering performance to ensure progress

is being made against our priorities.

Committee membership Attendance

Chair

Aisling Kennedy 4/4

Members

Imogen Joss 4/4

Margaret Snowdon OBE 1/1

Sarah Ing 4/4

Snehal Shah 4/4

Charlotte West 4/4

Adrian Davison 4/4

Alex Quant 4/4

Aisling Kennedy

Chair of the Sustainability

Committee

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

2. Strengthening sustainability communications

Following the launch of the enhanced sustainability

framework in FY 2024, the Committee took a specific

interest in strengthening internal and external

communications around sustainability. An additional

driver for this focus was the entry of the Group into the

FTSE 250 during the reporting year.

Each quarter, the Committee was informed of

communications activity around sustainability and

took an active interest in how sustainability resonated

with stakeholders. For the first time, I, as Chair of the

Sustainability Committee, participated in a “fireside chat”

podcast to discuss the importance of sustainability for

the Group and our achievements during the year. Overall,

the Committee was pleased to see increasing activity

andengagement with stakeholders on sustainability.

3. Keeping abreast of an evolving sustainability

landscape

In the dynamic landscape around environmental, social

and governance (ESG) considerations – particularly in the

capital markets – the Committee also focused on staying

abreast of the latest developments around regulation and

stakeholder expectations.

The Committee received in-depth briefings on new

regulations, including the Sustainability Disclosure

Requirements in the United Kingdom and the Corporate

Sustainability Reporting Directive in the European Union.

In addition, with the help of an external consultant, the

Committee commissioned a readiness assessment against

the standards developed by the International Sustainability

Standards Board (part of the IFRS Foundation).

Looking ahead

At a high level, the focus for the year ahead includes:

• driving further integration of our sustainability

framework across the Group, supporting our purpose

and corporate strategy;

• continuing to oversee communications and engage

with key internal and external stakeholders effectively

on sustainability; and

• monitoring the Group’s existing and emerging

sustainability risks and opportunities and updating our

management and disclosure approach as required.

I want to thank the members and the attendees of

the Sustainability Committee for their hard work and

contributions during the year. My first year as Chair of the

Committee has proved rewarding and I look forward to

leading the Committee as we continue to shape a better

future through our work.

The terms of reference of the Committee are reviewed

annually and are available on the Company’s website,

www.xpsgroup.com.

Aisling Kennedy

Chair of the Sustainability Committee

18 June 2025

Board of Directors

Margaret

Snowdon OBE

Independent

Non-Executive

Director

Snehal Shah

Chief Financial

Officer

Executive

sponsor for

sustainability,

responsible for

representing

investor views

Charlotte West

Head of

Employee

Engagement

Responsible

for employee

engagement

and I&D

strategies

Alex Quant

Head of ESG for

the investment

business

Responsible for

representing

client interests

Adrian Davison

Head of Risk

Responsible for

environmental

strategy

Imogen Joss

Senior

Independent

Non-Executive

Director

Sarah Ing

Independent

Non-Executive

Director

Supported by resources from across XPS

Sustainability Committee

Aisling Kennedy

Chair of the Sustainability Committee

Independent Non-Executive Director

XPS Pensions Group plc Annual Report and Accounts 2025

Directors’ remuneration report

The overall Remuneration Policy is designed to promote the long-term

success of the Group whilst ensuring it does not support inappropriate

risk taking. The Remuneration Committee has developed the Directors’

Remuneration Policy with the following principles in mind:

Remuneration at a glance

Aligned with shareholders – in order to motivate

Executive Directors and incentivise the delivery of

sustained performance over the long term, and to

promote alignment with shareholders’ interests.

Aligned with financial performance – to motivate

Executive Directors and support the delivery of the

Group’s financial and strategic business targets.

Aligned with colleagues – by striving for as consistent

as possible an approach between the Executive Directors

and senior management.

Aligned with clients – the continued strategy to be the

best provider of services to the UK pensions market, as

a one-stop shop for everything trustees and employers

need in this market, at the same time as achieving

sustainable growth through investing in client services,

technology and staff, demonstrates the commitment

to providing an agile, high-quality and market-leading

service that puts client satisfaction at the heart of

the business.

Competitive – remuneration packages are reviewed

annually and benchmarked by reference to the external

market. This allows us to attract and retain highly

talented people who know that good performance will

be rewarded.

Designed to encourage retention and to reward

performance – deferred variable remuneration does

not give rise to any immediate entitlement. Long-term

incentive awards normally require the participant to be

employed continuously by the Group until at least the

third anniversary of grant in order to vest in full.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

FY 2025 FY 2026

Fixed pay

Base salary

Co-CEOs CFO

£372,070 £321,797

Pension

Co-CEOs CFO Average employee

6% 6% 6%

Benefits

Benefits currently include permanent health

insurance, life insurance, private medical insurance

and car allowance.

Shareholding

Actual level % of base salary at 31 March 2024

Ben Bramhall Paul Cuff Snehal Shah

533% 317% 116%

Annual bonus

2025 annual bonus

Co-CEOs CFO

£558,105 £402,246

100% of maximum 100% of maximum

150% of salary 125% of salary

Bonus delivery

Beyond 100% of salary delivered in shares

Long-term incentive plan

2022 PSP estimated outcome*

Co-CEOs CFO

100% 100%

Performance conditions:

EPS – 75% TSR – 25%

Subject to two-year holding period.

Malus and clawback provisions apply.

* Vesting 1 July 2025.

Fixed pay

Base salary

Co-CEOs CFO Average employee

£435,322 £376,501

17.0% 17.0% 5%

Pension

No change for FY 2026.

Benefits

No change for FY 2026.

Shareholding

Actual level % of base salary at 31 March 2025

Ben Bramhall Paul Cuff Snehal Shah

496% 431% 246%

Annual bonus

2026 annual bonus

Co-CEOs

Maximum

150% of salary

CFO

Maximum

125% of salary

Bonus delivery

Beyond 100%

of salary

delivered in shares

Long-term incentiveplan

Anticipated award grants

as % of base salary

Co-CEOs CFO

150% 125%

Group adj. PBT 75%

Personal objectives 25%

Bonus

elements

EPS 70%

TSR 20%

ESG 10%

Performance

conditions

Shareholding requirement

489,016 shares

B. Bramhall

P. Cuff

S. Shah

0% 100% 200% 300% 400% 500% 600%

821,374 shares

150,902 shares

Shareholding requirement

427,852 shares

210,951 shares

B. Bramhall

P. Cuff

S. Shah

0% 100% 200% 300% 400% 500% 600%

492,246 shares

Directors’ remuneration report continued

XPS Pensions Group plc Annual Report and Accounts 2025

The Remuneration Committee continues to focus on

incentivising results, rewarding strong performance and linking

remuneration to long-term value for our shareholders.

Dear Shareholder

On behalf of the Remuneration Committee (the

“Committee”), I am pleased to present the Directors’

Remuneration Report for FY 2025. This report covers

three areas:

• my annual statement;

• the Directors’ Remuneration Policy, which was

approved at the March 2024 General Meeting; and

• the Annual Report on Remuneration which describes

how the Directors’ Remuneration Policy has been

applied in FY 2025 and how it will be implemented

in FY 2026.

As this is my first report since being appointed as Chair

of the Committee in September 2024, I would like to

take this opportunity to thank my predecessor, Margaret

Snowdon, for her valuable contribution as Chair since IPO

and her support to me during the transition.

Operational highlights

The financial year ended 31 March 2025 was another

excellent year of robust performance. At a Group level,

revenues increased 18% year on year and adjusted fully

diluted EPS rose 35% year on year. This was delivered

in a year where employee engagement and client

satisfaction remained high and our strong culture

has been recognised through the winning of various

industry awards.

The Company’s strong operational and financial progress

also continued to be reflected in the share price and

value delivered to our shareholders. XPS ended the year

again as one of the top performers in the FTSE All-Share,

delivering another total shareholder return of over 50%

across the year.

A welcomed consequence of this exceptional

performance was the Company joining the FTSE 250

Index during the year, which is regarded as a significant

milestone for the Group.

Engaging with our stakeholders

Shareholders

At last year’s Annual General Meeting held on

5September 2024, the Remuneration Committee was

pleased that shareholders approved the Remuneration

Report with 82% of votes for. The Board acknowledges

that 18% of votes received were voted against the

resolution and recognises that a small number of

shareholders have differing views.

Prior to this Directors’ Remuneration Report being

published, I contacted our largest shareholders to

Remuneration aligned with strategy and growth

Committee membership Attendance

Chair

Imogen Joss (appointed Chair September 2024) 3/3

Members

Alan Bannatyne 3/3

Sarah Ing 3/3

Aisling Kennedy 3/3

Margaret Snowdon OBE (Chair to September

2024) 3/3

Martin Sutherland 3/3

Imogen Joss

Chair of the Remuneration

Committee

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

introduce myself and to provide an update on the recent

Committee decisions, including the salary adjustments

outlined below. I would like to thank those shareholders

that provided feedback. As we will be renewing the

three-yearly Directors’ Remuneration Policy at the 2026

AGM I will be contacting shareholders again later on

this financial year to seek views on our proposals for an

updated Policy before these are finalised in preparation

for the shareholder vote at the AGM.

Employees

The Employee Engagement Group, chaired by XPS

Group’s Designated Employee Engagement Non-

Executive Director, Aisling Kennedy, considers

Executive Directors’ remuneration, taking account of

employee views.

The Employee Engagement Group was set up with the

purpose of providing an “employee voice” to the Board

by raising any matters or issues highlighted by employees.

It is a forum for employees to share ideas and concerns

with the Board in a consultative manner and is not a

decision making group. One area of focus for the Employee

Engagement Group is reward and remuneration of

Executive Directors; members are asked to provide

feedback on the Directors’ Remuneration Policy and

Executive Director objectives. The group improves

engagement between the Board and XPS employees.

Wider workforce remuneration

We continue to review the remuneration arrangements

for the wider workforce and take these into account when

considering remuneration arrangements for the Executive

Directors and other members of senior management.

The Remuneration Committee also reviewed the Group’s

gender pay gap and ethnicity pay gap analysis and

action plans.

Annual bonus payments for FY 2025

The financial element of these bonuses is based on Group

profit before tax (PBT). The reported Group adjusted PBT

for FY 2025 has resulted in a bonus payment of 100% of

the maximum for this element of the bonus.

The Committee determined that the strategic

objectives had been fully met which, therefore, led to

a bonus outturn of 100% of the maximum for the Co-

CEOs and CFO.

When considering the appropriateness of the bonus

outturn, the Committee was mindful that this was only

the third maximum bonus payment since IPO (in 2017)

and that in three of the previous seven years the bonus

had been reduced, with the agreement of the Co-CEOs, from

the formulaic outcome in order to ensure consistency

with bonus outcomes in the wider firm.

% of salary

% of

maximum

Ben Bramhall 150% 100%

Paul Cuff 150% 100%

Snehal Shah 125% 100%

Vesting outcomes for the 2022 PSP awards

The July 2022 PSP award is subject to underlying

EPS performance and relative TSR performance. The

estimated overall vesting of the award is expected to be

100% of maximum.

The Committee considers that the Policy operated

as intended during FY 2025 and that remuneration

outcomes are consistent with the Group performance

and appropriately reflect performance delivered for our

shareholders over the respective periods. The Committee

felt that no discretion needed to be applied for these

remuneration outcomes. With regard to the PSPs, the

Committee considers that the increase in share price

from the date of grant is aligned to the underlying

performance of the business.

Operation of the Directors’ Remuneration Policy for

FY 2026

Salary review

Looking forward into FY 2026, we have given

consideration to actions on pay matters which we regard

as appropriate and designed to support shareholders’

interests over the long term.

When reviewing the Executive Directors’ salaries, the

Committee considered the matter holistically, taking

into consideration the roles outlined above, the impact

of salary increases on total remuneration and increases

applicable to the wider workforce along with the strong

absolute and relative performance of the Group.

Although the Committee uses benchmarking data with

caution, the current remuneration levels have been

reviewed against those seen in similar sized companies.

The bottom half of the FTSE 250 has been used as this is

where the Company currently sits when ranked by market

capitalisation.

For the Co-CEOs, the salary for FY 2025 of £372,070

compares with the median salary in the bottom half of

the FTSE 250 of £600,000. However, when considering

the market levels, the Committee considers it appropriate

to reduce the CEO data by 15% to reflect a Co-CEO

structure. Similar data for the FTSE 250 as a whole

(i.e.showing “unadjusted” and “adjusted” data for the

Co-CEOs and unadjusted CFO data) is also included

below as an additional reference point.

This review demonstrated that at the FY 2025 levels,

the salaries are substantially below the adjusted median

position for the Co-CEOs and below the median position

for the CFO in our selected data sets.

Directors’ remuneration report continued

XPS Pensions Group plc Annual Report and Accounts 2025

Operation of the Directors’ Remuneration Policy for FY 2026 continued

Salary review continued

Noting the size of the discrepancy with market levels and the shareholder preference for any substantial increases

to be implemented over a number of years, the Committee determined that it would be appropriate to apply a 17%

increase for all the Executive Directors for FY 2026. A summary of the proposed increases and how they compare

with the market data is set out below:

The Committee is very mindful of how these increases may be perceived given that they are significantly larger than

the 5% average increase of the wider population. However, this approach is in line with that taken throughout the

wider organisation – where an individual’s base salary is deemed to be significantly below the market for a strong

performer, the appropriate recalibration will take place. Further, it should be noted that the annualised increase since

2018 remains broadly aligned with that of the general level of salary increases across the Group:

1 April

2019

1 April

2020

1 April

2021

1 April

2022

1 April

2023

1 April

2024

1 April

2025 Annualised

Co-CEOs 0% 0% 9.0% 6.0% 7.0% 4.5% 17.0% 6.1%

Average staff 3.0% 3.2% 3.2% 5.9% 12.0% 5.8% 5.0% 5.4%

The Committee was pleased that the recent feedback received from shareholders confirmed support for these

adjustments with a recognition that the rationale justified the approach for the highly regarded management team.

Iam grateful to all those who took the time to provide feedback.

For completeness, assuming that shareholder feedback remains supportive, and the strong performance of the

Company continues, a further increase above employee inflation levels may also be considered for FY 2027. This

would be further discussed with shareholders as part of the upcoming Policy review (see below) and would only be

considered following an appropriate review of business and personal performance.

Incentives

The maximum bonus opportunities for the Co-CEOs and CFO will remain unchanged at 150% and 125% of salary

respectively and no changes have been made in respect of the approach to deferral. When setting the bonus target

range for FY 2026, an adjustment to the calibration of the thresholds was applied in order to ensure the affordability

ofthe salary increases.

The PSP awards due to be made in July 2025 will be made at the ongoing award levels of 150% and 125% of salary

forthe Co-CEOs and CFO respectively.

Co-CEOs salary vs market median CFO salary vs market median

XPS Group

FY 2025

XPS Group

FY 2025

£700,000

£600,000

£500,000

£400,000

£300,000

£200,000

£100,000

£0

XPS Group

FY 2026

XPS Group

FY 2026

Bottom half

of FTSE 250

– unadjusted

Bottom half

of FTSE 250

– unadjusted

Bottom half

of FTSE 250

– adjusted

FTSE 250 –

unadjusted

FTSE 250 –

unadjusted

FTSE 250 –

adjusted

+17%

£372,070

£321,796

£376,501

£435,322

£600,000

£402,000

£439,000

£510,000

£672,000

£571,000

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Summary of implementation

A summary of the proposed implementation of the Policy is set out below:

Component Summary of approach

Base salary

and benefits

Base salary and benefits are reviewed annually on 1 April in light of a number of factors,

including the approach to salary reviews more generally across the Group and the performance

of the individuals and the Company. The base salaries of the Co-CEOs and the CFO have been

increased by 17.0% for FY 2026.

This compares with an average increase over the year awarded to all staff of 5%.

Ben Bramhall – £435,322

Paul Cuff – £435,322

Snehal Shah – £376,501

Pension

Defined contribution/cash supplements of 6% are paid and are aligned with the levels available

for new employees. This is well below the rate provided to many employees who have joined the

business through the acquisitions we have made.

Annual bonus

Payable subject to the achievement of challenging financial/strategic/personal performance

conditions. These are expected to incorporate sustainability, culture and technology-based

goals. Malus and clawback provisions apply.

Maximum bonus opportunity:

Ben Bramhall – 150% of salary

Paul Cuff – 150% of salary

Snehal Shah – 125% of salary

Bonus payments above 100% of salary will be paid in shares, deferred over two years.

Long-term

incentives

Annual awards of performance shares. Shares vest, subject to the achievement of the

performance conditions, after three years and are subject to a further two-year holding period.

Malus and clawback provisions apply.

Maximum grant levels FY 2025:

Ben Bramhall – 150% of salary

Paul Cuff – 150% of salary

Snehal Shah – 125% of salary

All-employee

share plans

Executive Directors are entitled to participate in all of the Company’s employee share plans,

including the Share Save Plan, on the same terms as other employees.

Share ownership

guidelines

Executive Directors are subject to a minimum shareholding requirement of 200% of salary with

a requirement to maintain a shareholding post-cessation of employment at 200% for one year

and 100% for a second year.

I hope that you find this year’s report a clear account of the Committee’s application of the Policy during the year.

At the forthcoming AGM there will be an advisory vote in respect of the Directors’ Remuneration Report and I look

forward to your continued support of remuneration at XPS.

I would also like to thank my fellow Committee members for their valuable contributions during the year.

Imogen Joss

Chair of the Remuneration Committee

18 June 2025

Directors’ remuneration report continued

XPS Pensions Group plc Annual Report and Accounts 2025

Directors’ Remuneration Policy

This Remuneration Policy, which has been approved by the Board, contains the material required to be set out in the

Directors’ Remuneration Report for the purposes of Part 4 of The Large and Medium-sized Companies and Groups

(Accounts and Reports) (Amendment) Regulations 2013, which amended The Large and Medium-sized Companies

and Groups (Accounts and Reports) Regulations 2008 (the “DRR Regulations”).

The Directors’ Remuneration Policy as set out in this section of the Directors’ Remuneration Report was approved in

March 2024 and took effect for all payments made to Directors with effect from the conclusion of the General Meeting

at which it was approved. The Policy as approved can be found at xpsgroup.com/investors/shareholder-information/

agms-and-general-meetings. We have reproduced the Directors’ Remuneration Policy here for the convenience of

ourshareholders.

Element and purpose Policy and operation Maximum Performance measures

Base salary

The core element of

pay, reflecting the

individual’s position

within the Company

and experience

The base salary of each Executive Director

takes into account the performance of each

individual and is set at an appropriate level

to secure and retain the talent needed to

deliver the Group’s strategic objectives.

Salaries are reviewed annually on 1 April

and are influenced by: information from

relevant comparator groups (referencing

the Group’s competitors and public

companies in other industries); the

performance of each individual Executive

Director; and average increases for

employees across the Group as a whole.

Annual increases will not

exceed 7.5% + RPI or the

average increase of

employees across the

Group in any given year,

whichever is higher. The

level of increase may

deviate from this

maximum in the case of

special circumstances,

forexample, increases in

responsibilities or

promotion. As an example,

this may occur if the

market capitalisation of

the Company increases as

the shares are “re-rated”

by investors such that

thecomparator group

changes. In this scenario,

the Board would consider

the increase and the

performance of the

Company. Other elements

of remuneration may also

change. In these cases,

any exceptional increase

will not exceed 20% of

salary a year.

n/a

Benefits in kind

To provide market-

competitive benefits

valued by recipients

Benefits currently include permanent

health insurance, life insurance, private

medical insurance and car allowance and

may also include other benefits in the

future. In certain limited circumstances,

relocation allowances may be necessary.

All benefits are subject to annual review

toensure they remain in line with

marketpractice.

Benefits (excluding any

relocation allowances)

may be provided up to

an aggregate value of

normally £35,000 for

each Executive Director

(indexed to inflation).

n/a

Pension

To provide

retirement benefits

Executive Directors participating in the

pension plan benefit from matching annual

Group contributions of 6% of base salary.

Executive Directors are entitled to take all

or part of their pension contributions as a

cash allowance.

The maximum employer’s

contribution (or cash

supplement) is 6%

ofsalary.

Executive Directors’

employer’s contribution

levels are aligned to the

contribution levels for the

majority of the workforce.

n/a

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Element and purpose Policy and operation Maximum Performance measures

Annual bonus

To motivate Executive

Directors and support

the delivery of the

Group’s financial and

strategic business

target over a one-year

operating cycle

Annual bonus plan levels and the

appropriateness of measures are reviewed

annually to ensure they continue to

support our strategy. Once set,

performance measures and targets will

generally remain unchanged for the year,

except to reflect events (e.g. corporate

acquisitions, other major transactions)

where the Committee considers it to be

necessary in its opinion to make

appropriate adjustments.

For financial years commencing following

the approval of this Policy, bonus

payments of up to 100% of salary are to be

paid as cash with amounts in excess of this

deferred into shares for two years.

The value of the deferred awards may be

increased to reflect the value of dividends

that would have been paid in respect of

any record dates falling between the grant

of awards and the expiry of any vesting

period.

Clawback and malus provisions apply as

explained in more detail in the notes to this

Policy table.

The maximum annual

bonus opportunity is

150% of base salary. For

FY 2026, the maximum

opportunity will be 150%

of base salary for the

Co-CEOs and 125% for

the CFO.

Bonuses will be payable

subjectto the achievement

ofperformance conditions

which will be set by the

Remuneration Committee.

The targets may be financial

and/or personal and strategic.

The intended weighting of

these measures is not less than

60% financial. Where a sliding

scale of targets is used,

attaining the threshold level of

performance for any measure

will not typically produce a

payout of more than 20% of the

maximum portion of overall

annual bonus attributable to

that measure, with a sliding

scale to full payout for

maximum performance.

Bonus payments will also be

subject to the Committee

considering that the proposed

bonus amounts, calculated by

reference to performance

against the targets,

appropriately reflect the

Company’s overall performance

and shareholders’ experience. If

the Committee does not believe

this to be the case, it retains the

discretion to adjust the bonus

outturn accordingly.

Performance

Share Plan

To motivate

Executive Directors

and incentivise the

delivery of sustained

performance over

the long term, and to

promote alignment

with shareholders’

interests

Awards under the PSP may be granted as

nil/nominal cost options which vest to the

extent performance conditions are

satisfied over a period normally of at least

three years.

Awards will vest at the end of the specified

vesting period at the discretion of the

Remuneration Committee and are subject

to a further holding period of two years (or

such shorter period so that the period

from the date of grant until the end of the

holding period will be equal to five years).

The PSP rules allow that the number of

shares (or the cash equivalent) subject to

vested PSP awards may be increased to

reflect the value of dividends that would

have been paid in respect of any record

dates falling between the grant of awards

and the expiry of any vesting period.

Clawback and malus provisions applied

areexplained in more detail in the notes

tothis Policy table.

The market value of

shares to be awarded to

Executive Directors in

respect of any year will

normally be up to 150%

of base salary, with

awards of a maximum

of200% allowable

inexceptional

circumstances.

The Remuneration Committee

may impose such conditions as

it considers appropriate which

must be satisfied before any

award will vest.

All awards made to Executive

Directors will be subject to

performance conditions which

measure performance over a

period normally no less than

three years.

No more than 25% of awards

vest for attaining the threshold

level of performance.

The formulaic outcome of all

PSP performance measures

willalso be subject to the

Committee considering that

theproposed levels, calculated

by reference to performance

against the targets,

appropriately reflect the

Company’s overall performance

and shareholders’ experience. If

the Committee does not believe

this to be the case, it retains the

discretion to adjust the PSP

outturn accordingly.

Directors’ remuneration report continued

XPS Pensions Group plc Annual Report and Accounts 2025

Element and purpose Policy and operation Maximum Performance measures

Share ownership

guidelines

To promote

stewardship and to

further align the

interests of

Executive Directors

with those of

shareholders

The share ownership guidelines encourage

Executive Directors to build or maintain (as

appropriate) a shareholding in the Company.

If any Executive Director does not meet the

guideline, they will be expected to retain up

to 50% of the net of tax number of shares

vesting under any of the Company’s

discretionary share incentive arrangements

(including any deferred bonus shares) until

the guideline is met.

Any performance vested shares subject to a

holding period and any shares awarded in

connection with annual bonus deferral will

be credited for the purpose of the guidelines

(discounted for anticipated tax liabilities).

Executive Directors will be required to

maintain a shareholding in the Company for

a two-year period after stepping down from

that position, being in the first year, the

lesser of the guideline level or the Executive

Directors’ actual relevant shareholding at

leaving and reducing to 50% of this

requirement in the second year.

For the purpose of this requirement, the

Executive Directors’ actual relevant

share-holding will include shares vesting

under any of the Company’s discretionary

share incentive arrangements (including any

deferred bonus shares) from awards granted

after the 2020 AGM but excludes shares

acquired and the release of shares under

share incentive plans where the grant

occurred prior to the adoption of the Policy.

The Committee will retain the discretion to

remove the holding requirement if it is

deemed to be inappropriate.

No maximum level but

not less than 200% of

base salary for any

Executive Director.

n/a

All-employee

share plans

To facilitate and

encourage share

ownership by staff,

thereby allowing

everyone to share

inthe long-term

success of the

Company and align

interests with those

of shareholders

The Executive Directors will be entitled to

participate in all of the Company’s employee

share plans, including the Share Save Plan,

on the same terms as other employees.

These all-employee share plans are

established under HMRC tax-advantaged

regimes and follow the usual form for

suchplans.

The maximum

participation levels for

all-employee share plans

will be the limits for such

plans set by HMRC from

time to time. However, the

Company may impose

lower limits on a scheme-

by-scheme basis.

Consistent with normal

practice, such awards

wouldnot be subject to

performance conditions.

Directors’ Remuneration Policy continued

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Element and purpose Policy and operation Maximum Performance measures

Chairman and

Non-Executive

Directors’ fees

To enable the

Company to recruit

and retain Company

Chairs and Non-

Executive Directors

of the highest

calibre, at the

appropriate cost

The fees paid to the Chairman and

Non-Executive Directors aim to be

competitive with other listed companies

ofequivalent size and complexity.

The fees payable to the Non-Executive

Directors are determined by the Board,

with the Chairman’s fees determined by

the Committee. No Director participates

indecisions regarding their own fees.

The Chairman and Non-Executive

Directors do not participate in any new

cash or share incentive plans.

The Chairman and Non-Executive

Directors are entitled to benefits relating

to travel and office support and such other

benefits as may be considered appropriate.

The Chairman is paid a single fee for the

role, although he will be entitled to an

additional fee if he is required to perform

any specific and additional services.

Non-Executive Directors receive a base

fee for the role. Additional fees are paid

foracting as Senior Independent Director,

Chair of the Audit & Risk, Remuneration or

other Board Committees or Designated

Employee Engagement NED to reflect the

additional time commitment. They will be

entitled to an additional fee if they are

required to perform any specific and

additional services.

The aggregate fees and

any benefits of the

Chairman and Non-

Executive Directors will

not exceed the limit from

time to time prescribed

within the Company’s

Articles of Association

for such fees, currently

£750,000 p.a. in

aggregate.

Any increases in fee

levels made will be

appropriately disclosed.

n/a

Notes to the Policy table

1. Stating maxima for each element of the

Remuneration Policy: The DRR Regulations and

related investor guidance encourage companies

to disclose a cap within which each element of the

Directors’ Remuneration Policy will operate. Where

maximum amounts for elements of remuneration have

been set within the Policy, these will operate simply as

caps and are not indicative of any aspiration.

2. Travel and hospitality: While the Committee does

not consider it to form part of benefits in the normal

usage of that term, it has been advised that corporate

hospitality, whether paid for by the Company or

another, and business travel for Directors (and

in exceptional circumstances their families) may

technically come within the applicable rules, and

so the Committee expressly reserves the right to

authorise such activities.

3. Past obligations: In addition to the above elements of

remuneration, any commitment made prior to, but due

to be fulfilled after, the approval and implementation

of this Remuneration Policy will be honoured.

4. Malus/clawback: The Committee may apply malus

(being the ability to withhold or reduce a payment/

vesting) and clawback (the ability to reclaim some

or all of a payment/vesting) to an award under the

annual bonus or PSP where there are circumstances

which would justify such action.

The relevant circumstances where these powers of

recovery may operate include:

• the Company materially misstated its financial results

for any reason and that misstatement would result or

resulted either directly or indirectly in an award being

granted or vesting to a greater extent than would have

been the case had that misstatement not been made;

• the extent to which any performance target and/or any

other condition was satisfied was based on an error, or

on inaccurate or misleading information or assumptions

which resulted either directly or indirectly in an award

being granted or vesting to a greater extent than would

have been the case had that error not been made;

• circumstances arose (or continued to arise) during

the vesting period (including any holding period) of

an award which would have warranted the summary

dismissal of the participant; or

• there is a sufficiently significant impact on the

reputation of the Company (including a Company

failure) to justify the operation of malus or clawback.

Normally, clawback can operate for up to two years

following the vesting of an award.

Directors’ remuneration report continued

XPS Pensions Group plc Annual Report and Accounts 2025

Directors’ Remuneration Policy continued

Notes to the Policy table continued

5. Performance conditions: The performance-related

elements of remuneration take into account the

Group’s risk policies and systems, and are designed

to align the senior executives’ interests with those

of shareholders. The Committee reviews the metrics

used and targets set for the Group Executive Directors

and senior management (not just the Executive

Directors) every year, in order to ensure that they

arealigned with the Group’s strategy and to ensure

anappropriate level of consistency.

6. Differences between the policy in respect of

remuneration for Directors and the policy on

remuneration for other staff: While the appropriate

benchmarks vary by role, the Company seeks to apply

the philosophy behind this Policy across the Company

as a whole. Where the Group’s pay policy for Directors

differs from its pay policies for groups of staff, this

reflects the appropriate market rate position and/or

typical practice for the relevant roles. The Company

takes into account pay levels, bonus opportunity

and share awards applied across the Group as

a whole when setting the Executive Directors’

Remuneration Policy.

7. Committee discretions: The Committee will operate

the annual bonus plan and PSP according to their

respective rules and the above Remuneration Policy

table. The Committee retains discretion, consistent with

market practice, in a number of respects, in relation to

the operation and administration of these plans. This

discretion includes, but is not limited to, the following:

• the selection of participants;

• the timing of grant of awards;

• the size of an award/bonus opportunity subject to

the maximum limits set out in the Remuneration

Policy table and the rules of the relevant plan;

• the determination of performance against targets

and resultant vesting/payouts;

• discretion required when dealing with a change

ofcontrol or restructuring of the Company;

• determination of the treatment of leavers based on

the rules of the relevant plan and the appropriate

treatment chosen;

• adjustments required in certain circumstances

(e.g.rights issue, corporate restructuring events

andspecial dividends); and

• the annual review of performance measures,

weightings and targets from year to year.

In addition, while performance measures and targets

used in the annual bonus plan and PSP will generally

remain unaltered, if events occur which the Committee

determines would make a different or amended target

a fairer measure of performance, such amended or

different targets can be set provided they are not

materially more or less difficult to satisfy, having

regard to the event in question.

Any use of the above discretion would, where relevant,

be explained in the Annual Report on Directors’

Remuneration and may, where appropriate and

practicable, be the subject of consultation with the

Company’s major shareholders.

The Committee may make minor amendments to the

Remuneration Policy set out above for regulatory,

exchange control, tax or administrative purposes or to

take account of a change in legislation, without obtaining

shareholder approval for that amendment.

Remuneration policy on recruitment

The Company’s recruitment remuneration policy aims

to give the Committee sufficient flexibility to secure the

appointment and promotion of high-calibre executives

to strengthen the management team and secure the skill

sets to deliver our strategic aims.

In terms of the principles for setting a package for a new

Executive Director, the starting point for the Committee

will be to apply the Remuneration Policy for Executive

Directors as set out above and structure a package in

accordance with that Policy. Consistent with the DRR

Regulations, any caps contained within the Policy for

fixed pay do not apply to new recruits, although the

Committee would not envisage exceeding these caps

inpractice unless absolutely necessary.

The annual bonus plan and PSP, including the maximum

award levels, will operate as detailed in the general

Remuneration Policy in relation to any newly appointed

Executive Director. For an internal appointment, any

variable pay element awarded in respect of the prior role

may either continue on its original terms or be adjusted

toreflect the new appointment as appropriate.

For both external and internal appointments, the

Committee may agree that the Company will meet

certain relocation expenses as it considers appropriate.

For external candidates, it may be necessary to make

additional awards in connection with the recruitment to

buy-out awards forfeited by the individual on leaving

a previous employer. Any recruitment-related awards

which are not buy-outs will be subject to the limits of

the annual bonus plan and PSP as stated in the general

Policy. Details of any recruitment-related awards will be

appropriately disclosed.

For any buy-outs the Company will not pay more than is

necessary in the view of the Committee and will be limited in

value to what the Committee considers to be a fair estimate

of the value of the awards foregone. The Committee will

in all cases seek, in the first instance, to deliver any such

awards under the terms of the existing annual bonus plan

and PSP. Itmay, however, be necessary in some cases to

make buy-out awards on terms that are more bespoke than

the existing annual bonus plan and PSP.

All buy-outs, whether under the annual bonus plan,

PSP or otherwise, will take due account of the service

obligations and performance requirements for any

remuneration relinquished by the individual when leaving

a previous employer.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

The Committee will seek, where it is practicable to do

so, to make buy-outs subject to what are, in its opinion,

comparable requirements in respect of service and

performance. However, the Committee may choose to relax

this requirement in certain cases, such as where the service

and/or performance requirements are materially completed,

or where such factors are, in the view of the Committee,

reflected in some other way, such as a significant discount

to the face value of the awards forfeited, and where the

Committee considers it to be in the interests of shareholders.

Service contracts

Executive Directors

Ben Bramhall and Paul Cuff entered into a service

agreement with the Company that was effective upon

admission and dated 16 February 2017. Snehal Shah

entered into a service agreement with the Company that

was effective 28 May 2019, the date of his employment

beginning, although Snehal was not appointed as Chief

Financial Officer until FCA approval was received on 9

July 2019. The policy is that each Executive Director’s

service agreement should be of indefinite duration,

subject to termination by the Company or the individual

on no more than 12 months’ notice.

The service agreements of all Executive Directors, which

are available for inspection at the Company’s registered

office, comply with this policy:

• the Executive Directors’ service agreements are

terminable by either party on not less than nine months’

written notice for the Co-CEO, six months for the CFO

or immediately upon payment in lieu of notice, and

contain a garden leave clause; and

• in each case any payment in lieu of notice will

be calculated by reference to base salary and

contractual benefits only, and will not include any

entitlement to bonus.

Chairman and Non-Executive Directors

The appointments of Alan Bannatyne and Margaret

Snowdon OBE are subject to the terms of letters of

appointment agreed between each of them and the

Company dated 24 January 2017, the appointment

of Sarah Ing is subject to the terms of a letter of

appointment dated 19 March 2019, the appointment

of Aisling Kennedy is subject to the terms of a letter

of appointment dated 22 February 2023 and the

appointments of Imogen Joss and Martin Sutherland

are subject to the terms of letters of appointment dated

7 December 2023. They are not entitled to receive any

compensation on termination of their appointment

(other than payment in respect of a notice period where

notice is served) and are not entitled to participate in

the Company’s share plans, bonus arrangements or

pension schemes.

They are entitled to be reimbursed all reasonable out-of-

pocket expenses incurred in the proper performance of

their duties.

Their appointment may be terminated at any time

upon three months’ written notice by either party and

with immediate effect in certain circumstances. The

appointment may also be terminated pursuant to the

Articles or as otherwise required by law. They are subject

to retirement by rotation every three years under the

Articles but intend to retire and submit themselves for

re-election by shareholders each year at the Annual

General Meeting.

Remuneration policy on termination

The Committee will consider treatments on a

termination having regard to all of the relevant facts and

circumstances available at that time. This policy applies

both to any negotiations linked to notice periods on a

termination and any treatments that the Committee

may choose to apply under the discretions available to

itunder the terms of the annual bonus plan and PSP.

Thepotential treatments on termination under these

plans are as follows:

Annual bonus plan

If an Executive Director resigns or is dismissed for cause

before the bonus payment date, the right to receive any

bonus normally lapses (unless the Committee determines

otherwise). If an Executive Director ceases employment

before the bonus date because of death, injury, illhealth,

disability or any other reason determined by theCommittee,

such bonus will be payable as the Committee in its

absolute discretion determines taking into account the

circumstances for leaving, time in employment and

performance. Similar treatment will apply in the event

ofachange in control of the Company.

Deferred bonus awards are normally preserved in all leaver

cases (unless an Executive Director ceases employment

due to gross misconduct or gross negligence) but release

will not typically be accelerated, except in the case of

death in service. The Committee has the ability to release

a leaver’s awards early in exceptional circumstances.

Directors’ remuneration report continued

XPS Pensions Group plc Annual Report and Accounts 2025

Directors’ Remuneration Policy continued

Remuneration policy on termination continued

Performance Share Plan (PSP)

The Committee’s Policy is in accordance with the rules of the Performance Share Plan 2017. If, during the performance

or vesting period, a participant:

• resigns or is dismissed for cause, awards will normally lapse in full; and

• ceases to be employed due to death, ill health, injury or disability, retirement with the agreement of the participant’s

employer, redundancy, the sale or transfer of the participant’s employing company or business out of the Group

(other than on change of control), or for other reasons specifically approved by the Committee, the award shall be

retained and will vest at the normal vesting date (unless the Committee exercises its discretion to allow awards to

vest early on cessation in exceptional circumstances) to the extent that the Committee determines. The Committee

will determine the extent to which an award will vest taking into account the extent to which the performance

conditions have been met and, where appropriate, the period that has expired to the date of cessation.

If a participant ceases employment during the holding period, performance-vested awards will normally be retained

and vest as normal at the end of the holding period (unless the Committee exercises its discretion to allow awards to

vest early on cessation in suitable cases).

The all-staff Share Save scheme provides treatments for leavers in line with HMRC rules for such plans.

The Company has the power to enter into settlement agreements with Directors and to pay compensation to settle

potential legal claims.

In addition, and consistent with market practice, in the event of the termination of an Executive Director, the Company

may make a contribution towards that individual’s legal fees and fees for outplacement services as part of a negotiated

settlement. Any such fees will be disclosed as part of the detail of termination arrangements.

External appointments

The Company’s policy on external appointments permits an Executive Director, subject to the approval of the

Chairman, to serve as a Non-Executive Director for normally no more than one other organisation where this does

not conflict with the individual’s duties to the Company. When an Executive Director takes such a role, they may be

entitled to retain any fees which they earn from that appointment.

Statement of consideration of employment conditions elsewhere in the Company

The Committee receives regular updates on overall pay and conditions in the Company which enable it to take the

wider workforce remuneration into account when setting the policy for executive remuneration. Whilst the Committee

does not consult directly with employees as part of the process for reviewing executive pay, the Committee does

receive insights from the broader employee population via an Employee Engagement Group. Accordingly, the

Committee confirms that the new Policy has been designed with due regard to the policy for remuneration of

employees across the Group.

The Remuneration Policy for other employees is based on broadly consistent principles as described above. Annual

salary reviews across the Company take into account Company performance, relevant pay and market conditions and

salary levels for similar roles in comparable companies.

Other members of senior management participate in similar annual bonus arrangements to the Executive Directors,

although award sizes vary by organisational level. Share incentive awards may also be granted to a broader

population than the Executive Directors although the award sizes and terms of the awards vary. The Company

operates discretionary bonus schemes for eligible groups of employees under which a bonus is payable subject to the

achievement of appropriate targets. All eligible employees may participate in the Company’s Share Save scheme on

identical terms.

Statement of consideration of shareholders’ views

The Committee considers shareholder views received during the year and at each AGM, as well as guidance from

shareholder representative bodies more broadly, when determining the Remuneration Policy and its implementation.

The Committee seeks to build an active and productive dialogue with investors on developments on the remuneration

aspects of corporate governance generally and it will consult with major shareholders in advance of any material

change to the structure and/or operation of the Policy and will seek formal shareholder approval for any such change

if required.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

100%

17%

37%

100%

£412

£475

£765

£965

Minimum

£2,500

£2,000

£1,500

£1,000

£500

£0

£1,800

£1,600

£1,400

£1,200

£1,000

£800

£600

£400

£200

£0

In line with

expectations

In line with

expectations

In line with

expectations

Maximum

Total fixed pay Annual bonus Performance Share Plan Share performance growth

Maximum with share

price growth

Maximum with

share price growth

Maximum with share

price growth

£1,781 £1,781

£1,589

£1,354

£2,108 £2,107

100%49%

54%

49%

34%

31%

34%

37%

35%

31%

30%

35%

31%

30%

15% 15%

14%

15%

26%

30%

26%

23%

26%

23%

Ben Bramhall —

Co-Chief Executive Officer

£’000s

Snehal Shah —

Chief Financial Officer

£’000s

Paul Cuff —

Co-Chief Executive Officer

£’000s

Illustrations of application of the Directors’ Remuneration Policy

The charts below show how the Remuneration Policy set out above will be applied for Executive Directors in FY 2026

based on three performance scenarios and using the assumptions below.

Minimum

Consists of base salary, benefits and pension:

• base salary is the salary to be paid in FY 2026;

• benefits measured as benefits paid in FY 2025; and

• pension measured as the defined contribution or cash allowance in lieu of Company

contributions of 6%.

Target

Based on what the Executive Director would receive if performance were in line with

expectations or on target (excluding share price appreciation and dividends):

• annual bonus: consists of the on-target bonus (50% of maximum opportunity used for

illustrative purposes); and

• PSP: consists of the threshold level of vesting (25% vesting) under the PSP.

Maximum

Based on the maximum remuneration receivable (excluding share price appreciation and

dividends):

• annual bonus: consists of maximum bonus of 150% of salary for the Co-CEOs and 125%

of salary for the CFO; and

• PSP: consists of the face value of awards (150% of base salary for Co-CEOs and 125%

ofbase salary for the CFO) under the PSP.

Maximum with 50% share

price growth

As the maximum scenario plus the value resulting from a share price growth of 50% in

relation to the PSP award.

XPS Pensions Group plc Annual Report and Accounts 2025

Annual report on remuneration

Remuneration Committee membership

The Remuneration Committee is chaired by Imogen Joss. Alan Bannatyne, Sarah Ing, Aisling Kennedy, Margaret

Snowdon OBE and Martin Sutherland are also members of the Committee. The Committee meets at least twice a year

and at such other times as the Chair of the Committee shall require or as the Board may direct. The Committee met three

times during the year. All members attended every Committee meeting they were eligible to attend throughout the year.

Other individuals, such as the Co-Chief Executive Officers, the Chief Financial Officer, the HR Director and external

professional advisers, were invited to attend for all or part of any meeting as and when appropriate and necessary. The

purpose of the Committee is to establish a formal and transparent procedure for developing the Remuneration Policy

in accordance with the Code and to set the remuneration of the Chairman and selected individuals with due account

taken of all relevant factors such as individual and Group performance as well as remuneration payable by companies

of a comparable size and complexity.

The Committee has formal terms of reference which are reviewed annually and can be viewed on the Company’s

website: www.xpsgroup.com.

Advisers

FIT Remuneration Consultants LLP (FIT), signatory to the Remuneration Consultants Group’s Code of Conduct,

was appointed by the Committee. FIT has been retained to provide advice to the Committee on matters relating to

executive remuneration. FIT provided no other services to the Company and, accordingly, the Committee was satisfied

that the advice provided by FIT was objective and independent. FIT’s fees in respect of FY 2025 were £62,258

(FY2024: £73,958). FIT’s fees are charged on the basis of the firm’s standard terms of business for advice provided.

The following (audited) section provides details of how the Directors were paid during the financial year to 31 March 2025:

Director

Salary/fees

Taxable

benefits

Bonus

Long-term

incentives

Pension

Total

remuneration

Total

fixed pay

Total

variable pay

Executive Directors

Ben Bramhall 2025 372,070 13,645 558,105 1,377,337 20,830 2,341,987 406,545 1,935,442

2024 356,048 13,320 534,072 1,156,726 19,985 2,080,151 389,353 1,690,798

Paul Cuff 2025 372,070 13,445 558,105 1,377,337 20,830 2,341,787 406,345 1,935,442

2024 356,048 13,120 534,072 1,156,726 19,985 2,079,951 389,153 1,690,798

Snehal Shah 2025 321,796 13,233 402,246 969,504 18,179 1,724,958 353,208 1,371,750

2024 300,745 12,872 375,931 814,214 17,069 1,520,831 330,686 1,190,145

Non-Executive Directors

Alan Bannatyne 2025 150,000 — — — — 150,000 150,000 —

2024 120,000 — — — — 120,000 120,000 —

Margaret

SnowdonOBE

2025 71,806 — — — — 71,806 71,806 —

2024 75,000 — — — — 75,000 75,000 —

Sarah Ing

2025 75,000 — — — — 75,000 75,000 —

2024 75,000 — — — — 75,000 75,000 —

Aisling Kennedy 2025 71,845 — — — — 71,845 71,845 —

2024 60,000 — — — — 60,000 60,000 —

Imogen Joss

2025 71,349 — — — — 71,349 71,349 —

2024 19,048 — — — — 19,048 19,048 —

Martin Sutherland

2025 60,000 — — — — 60,000 60,000 —

2024 19,048 — — — — 19,048 19,048 —

Total 2025 1,565,936 40,323 1,518,456 3,724,178 59,839 6,908,732 1,666,098 5,242,634

2024 1,380,937 39,312 1,444,075 3,127,666 57,039 6,049,029 1,477,288 4,571,741

1 Each of the Executive Directors is entitled to a range of benefits, comprising permanent health insurance, life insurance, private medical

insurance and car allowance. The Non-Executive Directors do not receive other benefits.

2 The cash element of the bonus is up to 100% of salary. The remainder (33.3% of the total bonus for Ben Bramhall and Paul Cuff, 20% for

Snehal Shah) will be deferred and awarded as a nominal cost option under the rules of the Deferred Share Bonus Plan (DSBP) in July 2025.

These awards will vest after two years and will be subject to malus and clawback provisions.

3 The outturn for the July 2022 PSP which vests in July 2025 is expected to be 100% and the vesting share price has been estimated at 358.73p,

based on the three-month average share price ended 31 March 2025. The grant share price for the award was 130p and accordingly the

relevant figures are reflective of an increase of 176% in the Company’s share price comparing the award price to the vesting price. Details of

the performance measures and targets applicable to the 2023 PSP are set out on page 93. The outturn for the July 2021 PSP which vested

on1July 2024 was 100% and the value has been updated reflecting the actual vesting share price of 316p and the dividend equivalents.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

4 Pension values shown all relate either to pension contributions or to cash allowances in lieu of pension.

5 Appointed Non-Executive Chairman on 30 November 2022.

6 Appointed to the Board on 7 December 2023.

FY 2025 annual bonus (audited)

The Executive Directors’ annual bonus targets were set at the beginning of the financial year. The financial

targets which account for 75% of the annual bonus were set based on Group PBT. The Group PBT targets set are

shown below.

Threshold

£m

Target

£m

Maximum

£m

Actual

£m

Payout

(% of this

element)

Group adj. PBT (75% of potential) 49.0 51.8 53.6 59.5 100%

The personal performance goals which account for 25% of the annual bonus were agreed with each Executive Director

and were based on a range of strategic and other objectives set at the start of the year. The targets were principally

designed to focus and reward the Executive Directors for accomplishing strategic goals which directly support the

Company’s strategy. Details of the measures and performance, to the extent they are not commercially sensitive, are

outlined below.

Ben Bramhall and Paul Cuff – Co-CEOs to be updated

Measure Target Performance Assessment

Maintain high level of staff

satisfaction and morale

Maintain high employee

satisfaction score in

employee survey

Employee Net Promoter Score of +24

achieved.

100%

Progress inclusion and

diversityagenda

Increase females in

senior management roles

Increase in the percentage offemales in the

senior management team(from 35% to

38%) achieved.

100%

Maintain high level of

clientsatisfaction

Continued effectiveness of client

care programme

High level of client

retention to be maintained

Strong Client Insight Survey results

achieved.

Client retention remained very high with no

material client losses due to service quality.

100%

Pursue and execute accretive

M&A opportunities and

diversification into the Insurance

Consulting market

Execute smoothly any

opportunities approved

by the Board

Successful growth of the Insurance

Consulting division and supporting

acquisition of Polaris Actuaries and

Consultants Ltd.

100%

Technology Smooth client transition

onto new administrative

platform to commence

Client transition is on track, around

300,000 members have moved onto the

system so far.

100%

Snehal Shah – CFO

Measure Target Performance Assessment

Support embedding improved

KPIs in certain business areas

Improved financial

reporting to the Board

and Executive Committee

Revised KPIs fully embedded in financial

reporting cycle with fuller management

information pack produced, significantly

improving wider management team’s

understanding of performance drivers and

improved decision making.

100%

Maintain OCF conversion Above 90% Achieved, with further improvement in the

billing and collection cycle year on year.

100%

Continue to strengthen Group’s

risk management and preparation

for Corporate Governance

Changes

Refreshed risk register

and implementation plan

for risk related

governance changes

Updated risk register with clearly identified

risk mitigations and controls.

Work underway to ensure compliance with

Provision 29 of 2024 UK Corporate

Governance Code.

100%

Continue to drive strong

shareholder interest and

engagement in XPS

Meet with non-holders

and secure new

institutional investors

Met with over 60 non-holders and new

institutional investors, including overseas

investors, joined the share register.

100%

Each objective is measurable (albeit some detail has been removed given the commercially sensitive nature), with target

achievement levels evidenced by activities and outcomes. The Remuneration Committee then assessed performance

against each objective in each category on the basis of evidenced outcomes and rated the level of achievement.

In light of the high standards of attainment of each of the Executive Directors, the Remuneration Committee assessed

that performance against the targets had been met in full and would result in 100% of maximum for this element of

bonus to be payable to the Co-CEOs and CFO.

XPS Pensions Group plc Annual Report and Accounts 2025

Annual report on remuneration continued

FY 2025 annual bonus (audited) continued

This results in an outcome in aggregate of 100% of maximum for the Co-CEOs and CFO.

Outcomes

Weightings

Ben

Bramhall

Paul

Cuff

Snehal

Shah

Financial performance (% of this element) 75% 100% 100% 100%

Strategic performance (% of this element) 25% 100% 100% 100%

Total actual performance outcome (% of maximum) 100% 100% 100%

Total actual performance outcome (% of salary) 150% 150% 125%

Total actual performance outcome (£) £558,105 £558,105 £402,246

Statement of Directors’ shareholding and share interests (audited)

For each Director, the total number of Directors’ interests in shares at 31 March 2025 was as follows:

Director

Ben

Bramhall

Paul

Cuff

Snehal

Shah

Alan

Bannatyne

Margaret

Snowdon

OBE

Sarah

Ing

Aisling

Kennedy

Imogen

Joss

Martin

Sutherland

Number of ordinary

shares held as at 31

March 2025

492,246 427,852 210,951 49,627 30,303 15,000 — — —

Share ownership

requirement (% of

salary)

200% 200% 200% n/a n/a n/a n/a n/a n/a

Share ownership

requirement met?

Y Y Y n/a n/a n/a n/a n/a n/a

Holding as % of March

2025 salary

496% 431% 246% n/a n/a n/a n/a n/a n/a

Number of ordinary

shares held as at 31

March 2024

821,374 489,016 150,902 36,594 30,303 15,000 — — —

The shareholdings above include those held by Directors and their respective connected persons. There were no

changes in the Directors’ interests in shares between 31 March 2025 and 18 June 2025.

Under the share ownership guidelines, the Executive Directors are required to build and maintain a shareholding

equivalent to at least 200% of salary and are required to maintain a shareholding for a period after leaving the Board.

Awards granted in the year under the PSP (audited)

The following nominal cost option PSP awards were granted in July 2024.

These awards vest in 2027 subject to performance relating to a mix of adjusted EPS, relative TSR and ESG-related

targets. The details of these targets are shown in the “Outstanding share plan awards” section below.

Director Date of grant

Basis of award

(% of salary)

Face value of

awards at grant

Number of

shares under

award

Date of

vesting

Ben Bramhall 1 July 2024 150% £558,104 186,657 July 2027

Paul Cuff 1 July 2024 150% £558,104 186,657 July 2027

Snehal Shah 1 July 2024 125% £402,248 134,531 July 2027

1 Based on the share price of £2.99 on 28 June 2024.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Outstanding share plan awards (audited)

Details of all outstanding PSP awards made to Executive Directors are set out below:

Director Date of grant

Exercise

price

Interests held

at 31 March

2024

Interests

awarded

during the

year

Interests

vested during

the year

Interests

lapsed during

the year

Interests held

at 31 March

2025

Vesting

date

Ben

Bramhall

1 July 2021 0.05p 341,217 — 341,217

— — July 2024

1 July 2022 0.05p 383,948 — — — 383,948 July 2025

17 July 2023 0.05p 333,200 — — — 333,200 July 2026

1 July 2024 0.05p — 186,657 — — 186,657 July 2027

Paul Cuff 1 July 2021 0.05p 341,217 — 341,217

— — July 2024

1 July 2022 0.05p 383,948 — — — 383,948 July 2025

17 July 2023 0.05p 333,200 — — — 333,200 July 2026

1 July 2024 0.05p — 186,657 — — 186,657 July 2027

Snehal

Shah

1 July 2021 0.05p 240,181 — 240,181

— — July 2024

1 July 2022 0.05p 270,260 — — — 270,260 July 2025

17 July 2023 0.05p 241,239 — — — 241,239 July 2026

1 July 2024 0.05p — 134,531 — — 134,531 July 2027

1 On 3 July 2024, Ben Bramhall exercised awards over 341,217 shares granted on 1 July 2021 and sold 160,965 shares to settle resultant tax

and social security obligations. The closing share price on the day of exercise was £3.13.

2 On 3 July 2024, Paul Cuff exercised awards over 341,217 shares granted on 1 July 2021 and sold 143,847 shares to settle resultant tax and

social security obligations. The closing share price on the day of exercise was £3.13.

3 On 3 July 2024, Snehal Shah exercised awards over 240,181 shares granted on 1 July 2021 and sold 113,302 shares to settle resultant tax

andsocial security obligations. The closing share price on the day of exercise was £3.13.

Vesting outcomes for the FY 2023 PSP awards (granted in July 2022)

These awards comprise nominal cost options with an exercise price of 0.05p per option and vest in July 2025 subject

to performance relating to: (i) adjusted earnings per share (EPS) targets as to 75% of the award; and (ii) relative total

shareholder return (TSR) targets as to the remaining 25% of the award.

The details of the EPS and TSR target ranges are shown in the table below:

Diluted adjusted EPS for the three-year period to the end of FY 2025 Portion of award vesting

Compound annual growth in EPS (CAG) of less than 5% 0%

CAG of 5% 25%

CAG of between 5% and 10% Between 25% and 100% on a straight-line basis

CAG of 10% or more 100%

Actual performance

CAG of 29%

100%

1 Measured on a constant tax rate basis, to ensure the outturn is an accurate reflection of operational performance.

XPS Group’s TSR ranking vs a comparator group

of companies Portion of award vesting

Below median 0%

Median 25%

Between median and upper quartile Between 25% and 100% on a straight-line basis

Upper quartile 100%

Actual performance

Above upper quartile threshold

100%

2 Based on performance to the end of May 2025. This is an estimate as TSR performance will be measured to the third anniversary of the date

of grant which is 1 July 2025.

The TSR comparator group consists of the constituents of the FTSE Small Cap Index (excluding investment trusts)

atthe start of the performance period.

XPS Pensions Group plc Annual Report and Accounts 2025

Annual report on remuneration continued

Vesting outcomes for the FY 2023 PSP awards (granted in July 2022) continued

Based on the above the expected percentage of the total award vesting is 100% of maximum. Details of the shares

under award and their estimated value (based on the three-month average share price at 31 March 2025 of 358.73p

per share) are as follows.

Executive

Maximum

number of

Number

of shares

to vest

Number

of shares

to lapse

Estimated

value

vesting

£

Ben Bramhall 383,948 383,948 — 1,377,337

Paul Cuff 383,948 383,948 — 1,377,337

Snehal Shah 270,260 270,260 — 969,504

1 Based on the three-month average share price to 31 March 2025.

The awards also receive the value of dividend equivalents.

FY 2024 PSP awards (granted in July 2023)

These awards comprise nominal cost options with an exercise price of 0.05p per option and vest in 2026. These

awards comprised a main award and a one-off additional award.

Vesting of both awards will be based on the measures as summarised in the tables below, with performance measured

over a three-year period.

For the main award, there are three performance criteria, with the vesting of 70% of the shares under this award

subject to EPS performance, 20% subject to relative total shareholder return and the remaining 10% is based on a

reduction of the Company’s CO

emissions.

The details of the target ranges are shown in the table below:

Diluted adjusted EPS

for the three-year period to the end of FY 2026 Portion of award vesting

Compound annual growth in EPS (CAG) of less than 5% 0%

CAG of 5% 25%

CAG of between 5% and 10% Between 25% and 100% on a straight-line basis

CAG of 10% or more 100%

1 Measured on a constant tax rate basis, to ensure the outturn is an accurate reflection of operational performance.

The EPS target range was set considering both the internal and external expectations for EPS performance over the

next three years.

XPS Group’s TSR ranking vs a comparator group

of companies Portion of award vesting

Below median 0%

Median 25%

Between median and upper quartile Between 25% and 100% on a straight-line basis

Upper quartile 100%

2 The TSR comparator group consists of the constituents of the FTSE Small Cap Index (excluding investment trusts) at the start of the

performance period.

XPS Group’s CO

emissions

for the three-year period to the end of the FY 2026 Portion of award vesting

Below 20% reduction 0%

20% reduction 25%

Between 20% and 30% reduction Between 25% and 100% on a straight-line basis

30% of more reduction 100%

3 The CO

emissions are based on Scope 1 and 2 emissions and will be calculated on an emissions per number of employees basis.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

For the additional award, vesting is fully based on EPS performance. The details of the EPS target range is shown in

the table below:

Diluted adjusted EPS

for the three-year period to the end of the FY 2026 Portion of award vesting

CAG of 10% 0%

CAG of between 10% and 15% Between 25% and 100% on a straight-line bases

CAG of 15% or more 100%

1 Measured on a constant tax rate basis to ensure the outturn is an accurate reflection of operational performance.

The EPS performance range of the additional award was set to ensure vesting will occur only once the EPS element

ofthe main award has vested in full.

FY 2025 PSP awards (granted in July 2024)

These awards comprise nominal cost options with an exercise price of 0.05p per option and vest in 2027 subject to

70% of the shares subject to EPS performance, 20% subject to relative total shareholder return and the remaining 10%

based on a reduction of the Company’s CO

emissions.

The details of the target ranges are shown in the table below:

Diluted adjusted EPS

for the three-year period to the end of FY 2027 Portion of award vesting

Compound annual growth in EPS (CAG) of less than 5% 0%

CAG of 5% 25%

CAG of between 5% and 10% Between 25% and 100% on a straight-line basis

CAG of 10% or more 100%

1 Measured on a constant tax rate basis, to ensure the outturn is an accurate reflection of operational performance.

The EPS target range was set considering both the internal and external expectations for EPS performance over the

next three years.

XPS Group’s TSR ranking vs a comparator group

of companies Portion of award vesting

Below median 0%

Median 25%

Between median and upper quartile Between 25% and 100% on a straight-line basis

Upper quartile 100%

2 The TSR comparator group consists of the constituents of the FTSE Small Cap Index (excluding investment trusts) at the start of the

performance period.

XPS Group’s CO

emissions

for the three-year period to the end of the FY 2027 Portion of award vesting

Below 20% reduction 0%

20% reduction 25%

Between 20% and 30% reduction Between 25% and 100% on a straight-line basis

30% of more reduction 100%

3 The CO

emissions are based on Scope 1 and 2 emissions and will be calculated on an emissions per number of employees basis.

External Board appointments

The Executive Directors did not hold any external directorships during the year. The approved Directors’ Remuneration

Policy makes provisions for them to retain any fees for one appointment.

Payments to past Directors (audited)

There were no payments to past Directors in the financial year FY 2025 (FY 2024: £nil).

Payments for loss of office (audited)

No payments were made to any Director in respect of loss of office in the financial year FY 2025 (FY 2024: £nil).

Review of past performance and CEO remuneration table (unaudited)

The graph below shows the TSR of the Company and the FTSE 250 Index (excluding investment trusts) over the

period from admission to 31 March 2025. This is considered an appropriate comparator for XPS Group, which was a

constituent of the FTSE 250 Index during the year.

XPS Pensions Group plc Annual Report and Accounts 2025

Annual report on remuneration continued

Total shareholder return

Source: Datastream (an LSEG product)

31 Mar

2017

31 Mar

2018

31 Mar

2019

31 Mar

2020

31 Mar

2021

31 Mar

2022

31 Mar

2024

31 Mar

2025

31 Mar

2023

15 Feb

2017

120

170

220

270

320

370

420

XPS Pensions Group plc FTSE 250 excl. investment trusts

Total Shareholder Return (rebased to 100)

The table below shows the Co-CEOs’ single total figure of remuneration since admission and the level (as a percentage

of maximum award) of payouts under the incentive plans:

Single total

figure of

remuneration

Annual bonus

payout as %

of maximum

Long-term

incentive

vesting rates

as % of

maximum

2025 Ben Bramhall £2,341,987 100% 100%

Paul Cuff £2,341,787 100% 100%

2024 Ben Bramhall £2,080,151 100% 100%

Paul Cuff £2,079,951 100% 100%

2023 Ben Bramhall £1,461,611 100% 66%

Paul Cuff £1,461,411 100% 66%

2022 Ben Bramhall £893,195 79%

38%

Paul Cuff £892,995 79%

38%

2021 Ben Bramhall £692,741 68% 21%

Paul Cuff £692,541 68% 21%

2020 Ben Bramhall £569,272 30%

40%

Paul Cuff £569,272 30%

40%

2019 Ben Bramhall £362,803 12%

n/a

Paul Cuff £362,803 12%

n/a

2018 Ben Bramhall £546,138 79% n/a

Paul Cuff £545,724 79% n/a

2017 Ben Bramhall £286,882 31% n/a

Paul Cuff £4,179,695 31% n/a

1 The vesting rate relates to the July 2022 award that is due to vest in July 2025 and is, in part, based on estimated vesting levels at 31 March 2025.

2 The bonus was reduced with the agreement of the Co-CEOs from the formulaic outcome of 86%.

3 The bonus was reduced with the agreement of the Co-CEOs from the formulaic outcome of 50%.

4 The bonus was reduced with the agreement of the Co-CEOs from the formulaic outcome of 54%.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Percentage change in remuneration of Directors and employees (unaudited)

The table below presents the year on year percentage change in remuneration received by each Director, compared

with the change in remuneration received by all XPS Group staff.

The percentage changes are impacted where a Director has been in role for part of a year and for Non-Executive

Directors are reflective of changes to individual Committee and other responsibilities, as well as adjustments to

fee levels.

Percentage change in

remuneration from

31/03/2020 to 31/03/2021

Percentage change in

remuneration from

31/03/2021 to 31/03/2022

Percentage change in

remuneration from

31/03/2022 to 31/03/2023

Percentage change in

remuneration from

31/03/2023 to 31/03/2024

Percentage change in

remuneration from

31/03/2024 to 31/03/2025

Base

salary

Benefits

Bonus

Base

salary

Benefits

Bonus

Base

salary

Benefits

Bonus

Base

salary

Benefits

Bonus

Base

salary

Benefits

Bonus

Ben

Bramhall — — 127% 9% 2% 27% 6% 18% 29% 7% 3% 7% 4.5% 2.4% 4.5%

Paul Cuff — (2%) 127% 9% 2% 27% 6% 18% 29% 7% 3% 7% 4.5% 2.5% 4.5%

Snehal Shah 20%

23%

177% 9% 2% 27% 6% 17% 29% 7% 3% 19% 7.0% 2.8% 7.0%

Alan

Bannatyne — — — — — — 34%

— — 20%

— — 25% — —

Margaret

Snowdon

OBE 4% — — — — — 4% — — 3% — — (4%) — —

Sarah Ing 13%

— — — — — 9% — — 6% — — — — —

Aisling

Kennedy — — — — — — — — — 860%

— — 20% — —

Imogen Joss — — — — — — — — — — — — 275%

— —

Martin

Sutherland — — — — — — — — — — — — 215%

— —

All UK

employees 3.2% (8%) 68% 5.9% (12%) 14% 10% 6% 46% 8.4% 15% 11% 6.4% 3.2% 5.0%

1 Snehal Shah was appointed as a Director on 28 May 2019; accordingly, the percentage difference shown represents a comparison between

a full year (FY 2021) and a part year (FY 2020).

2 Alan Bannatyne was appointed as Chairman on 30 November 2022, previously Non-Executive Director; accordingly, the percentage

difference shown represents a partial year of the increased fee (FY 2023) and a full year (FY 2024).

3 Sarah Ing was appointed as Non-Executive Director on 17 May 2019; accordingly, the percentage difference shown represents a comparison

between a full year (FY 2021) and a part year (FY 2020).

4 Aisling Kennedy was appointed as Non-Executive Director on 22 February 2023; accordingly, the percentage difference shown represents

acomparison between a full year (FY 2024) and a part year (FY 2023).

5 Imogen Joss and Martin Sutherland were appointed to the Board on 7 December 2023; accordingly the percentage differences shown

represent a comparison between a part year (FY 2024) and a full year (FY 2025).

CEO pay (unaudited)

The table below sets out the pay ratios for the Group Co-Chief Executive Officers in relation to the equivalent pay for

the lower quartile, median and upper quartile employees (calculated on a full-time basis).

Year Method

25th percentile

pay ratio

Median

pay ratio

75th percentile

pay ratio

2025 Option A Total pay ratio 72:1 52:1 35:1

2024 Option A Total pay ratio 53:1 39:1 25:1

2023 Option A Total pay ratio 40:1 29:1 21:1

2022 Option A Total pay ratio 31:1 22:1 15:1

2021 Option A Total pay ratio 27:1 19:1 13:1

2020 Option A Total pay ratio 24:1 13:1 11:1

Notes

The Company determined the remuneration figures at each quartile with reference to a date of 31 March 2025.

The Group used calculation option A as this is widely regarded as the method resulting in the most robust analysis. The calculation is based

onfull-time equivalent salary calculated on the same basis as the single figure table.

This year the ratios have increased compared to the previous year. This increase reflects the increase in the Co-CEOs’ single figure of

remuneration for 2025, which can be found on page 96.

The Committee has reviewed the employee data and believes the median pay ratio to be consistent with the pay, reward and progression

policies for the Company’s UK employees over the period.

XPS Pensions Group plc Annual Report and Accounts 2025

Annual report on remuneration continued

CEO pay (unaudited) continued

The total pay and benefits and the salary component of total pay and benefits for the employee at each of the 25th

percentile, median and 75th percentile are shown below:

25th percentile Median 75th percentile

Salary £29,473 £40,000 £58,275

Total pay and benefits £32,513 £44,913 £67,458

Relative importance of spend on pay (unaudited)

The table below details the change in total staff pay between FY 2024 and FY 2025 as detailed in note 9 of

thefinancial statements, compared with distributions to shareholders by way of dividends, share buy-backs or any

other significant distributions or payments. These figures have been calculated in line with those in the audited

financial statements.

£’000 FY 2025 FY 2024 % change

Total gross staff pay 110,684 97,467 14%

Distributions to shareholders 22,185 18,025 23%

Statement of shareholder voting (unaudited)

The table below shows the outcome of the binding vote on the Directors’ Remuneration Policy at the General

Meeting held on 7 March 2024 and the advisory vote on the FY 2024 Directors’ Remuneration Report held on

5September 2024.

AGM resolution Votes for % Votes against Votes withheld

Directors Remuneration Policy 131,060,632 76.44% 40,386,688 4,362,067

Directors Remuneration Report 138,806,485 82.01% 30,443,717 3,744,701

Implementation of Policy for FY 2026 (unaudited information)

This section provides an overview of how the Committee is proposing to implement the Remuneration Policy in the

year ending 31 March 2026.

Base salary

Base salaries are as follows with effect from 1 April 2025:

• Ben Bramhall – £435,322;

• Paul Cuff – £435,322; and

• Snehal Shah – £376,501.

Benefits in kind

Benefits will be paid in line with the Directors’ Remuneration Policy. Details of the benefits received by Executive

Directors are set out in the single figure table on page 96. There is no intention to introduce additional benefits

in FY 2026.

Pension

Contribution rates are currently 6% of base salary. Contributions may be made as cash supplements in full or in part.

These contributions are in line with those for the majority of employees in the Group.

Annual bonus

Bonus maxima of 150% of salary will be applied for the Co-Chief Executive Officers and 125% for the Chief Financial

Officer. Bonus payments up to 100% of salary will be paid as cash with amounts in excess of this deferred into shares

for two years.

The performance weightings are as follows: 75% of the bonus will be payable by reference to performance based on

adjusted PBT, with performance against personal/strategic targets determining the extent to which the remaining 25%

of the overall bonus opportunity is payable.

In addition:

• no bonus will be payable unless the Committee is satisfied that the Company’s underlying performance

warrants it; and

• as set out in the Policy table, bonus payments will also be subject to the Committee considering that the proposed

bonus amounts, calculated by reference to performance against the targets, appropriately reflect the Company’s

overall performance and shareholders’ experience. If the Committee does not believe this to be the case, it may

adjust the bonus outturn accordingly.

XPS Pensions Group plc Annual Report and Accounts 2025

Governance

Owing to the Board’s concerns about commercial sensitivity, we do not believe it is in shareholders’ interests to

disclose any further details of these targets on a prospective basis. However, the Company is committed to adhering

to principles of transparency and will, provided disclosure of targets is not deemed to be commercially sensitive, make

appropriate and relevant levels of disclosure of bonus targets and performance against these targets for the FY 2026

bonus in next year’s report. The targets will be set to ensure both consistency and fairness to all stakeholders.

PSP awards

It is intended that PSP awards will be made in FY 2026. The award levels will be no more than 150% of salary for the

Co-CEOs and 125% for the CFO.

Vesting of the awards will be based on three performance criteria, with the vesting of 70% of the shares subject to

EPS performance, 20% subject to relative total shareholder return and the remaining 10% based on a reduction of the

Company’s CO

emissions.

The details of the target ranges are shown in the table below:

Diluted adjusted EPS

for the three-year period to the end of FY 2027 Portion of award vesting

Compound annual growth in EPS (CAG) of less than 5% 0%

CAG of 5% 25%

CAG of between 5% and 10% Between 25% and 100% on a straight-line basis

CAG of 10% or more 100%

1 Measured on a constant tax rate basis, to ensure the outturn is an accurate reflection of operational performance.

The EPS target range was set considering both the internal and external expectations for EPS performance over the

next three years.

XPS Group’s TSR ranking vs a comparator group

of companies Portion of award vesting

Below median 0%

Median 25%

Between median and upper quartile Between 25% and 100% on a straight-line basis

Upper quartile 100%

2 The TSR comparator group consists of the constituents of the FTSE 250 Index (excluding investment trusts) as at the start of the

performance period.

XPS Group’s CO

emissions

for the three-year period to the end of the FY 2027 Portion of award vesting

Below 20% reduction 0%

20% reduction 25%

Between 20% and 30% reduction Between 25% and 100% on a straight-line basis

30% of more reduction 100%

3 The CO

emissions are based on Scope 1 and 2 emissions and will be calculated on an emissions per number of employees basis.

Minimum shareholding requirement

To align the interests of Executive Directors with those of shareholders, they are required to build and maintain

significant holdings of shares in the Group over time. The minimum shareholding requirement for Executive Directors

is 200% of base salary for the Co-CEOs and for the CFO.

In addition, Executive Directors will be required to maintain their full minimum shareholding requirement for one year

post-cessation of employment and hold 50% of the requirement for a second year.

The Chairman’s and the Non-Executive Directors’ fees

The following fees remain effective for FY 2026.

Alan Bannatyne receives an annual fee of £150,000 for his role as Board Chairman.

The Non-Executive Directors are entitled to a fee of £60,000 p.a., with an additional fee of £15,000 p.a. for the

Chair of the Audit & Risk Committee and £10,000 p.a. for each of the Senior Independent Director, Chair of the

Remuneration Committee and Chair of the Sustainability Committee. The Designated Employee Engagement

Non-Executive Director receives an additional fee of £5,000 p.a.

This report was reviewed and approved by the Board of Directors on 18 June 2025 and was signed on its behalf by:

Imogen Joss

Chair of the Remuneration Committee

18 June 2025

XPS Pensions Group plc Annual Report and Accounts 2025

100

Directors’ report

The Directors present their Annual Report on the activities of

XPS Pensions Group plc (the “Group”), together with the audited

financial statements for the year ended 31 March 2025.

The Governance section on pages 60 to 104 forms part

of this Directors’ Report. Other requisite components of

this report are set out elsewhere in this Annual Report.

The Strategic Report provides information relating to the

Group’s activities, its business and strategy, engagement

with stakeholders, the principal risks and uncertainties

faced by the business and environmental and employee

matters. These sections, together with the Statement

of Corporate Governance and Directors’ Remuneration

Report, provide an overview of the Group and give an

indication of future developments in the Group’s business,

so providing a balanced assessment of the Group’s

position and prospects. These reports and this Directors’

Report have been drawn up and presented in accordance

with, and in reliance upon, applicable English company

law and any liability of the Directors in connection with

such reports shall be subject to the limitations and

restrictions provided by such law. XPS Pensions Group

plc is a member of the FTSE 250, trading under the ticker

symbol XPS.

The table on page 103 details where certain other

information, which forms part of the Directors’ Report,

can be found within this Annual Report.

Going concern

Please refer to the Going Concern Statement in the

Strategic Report on page 49 and the Viability Statement

on page 59 for details on the assessment carried out by

the Directors with regard to going concern.

Results and dividend

The Group’s audited financial statements for the year

ended 31 March 2025 are set out on pages 113 to 149 and

the Company’s audited financial statements are set out

on pages 150 to 157. The Group’s profit after taxation

for the year ended 31 March 2025 was £30.3 million (FY

2024: £54.2 million). An interim dividend of 3.7p per

ordinary share (FY 2024: 3.0p) was paid on 7 February

2025. The Directors recommend a final dividend for the

year of 8.2p per ordinary share (FY 2024: 7.0p) to be paid

on 22 September 2025 to shareholders on the register on

22 August 2025.

Further information regarding dividend policy and

payments can be found in the Financial Review on page

49 and in note 34 to the financial statements on page 149.

Post-balance sheet events

There have been no significant post-balance sheet events

to report since 31 March 2025.

Directors

The current Directors of the Company, with summaries

of their key strengths and experience, are set out in the

Governance section on pages 62 and 63. Directors on the

Board during the year and up to the date of this report

are as follows:

Alan Bannatyne

Ben Bramhall

Paul Cuff

Snehal Shah

Margaret Snowdon OBE

Sarah Ing

Aisling Kennedy

Imogen Joss

Martin Sutherland

Details of the Directors’ service contracts are shown in

the report of the Remuneration Committee on page 87.

Details of share options granted to Directors and the

interests of the Directors in the ordinary shares of the

Company are set out in the Remuneration Report on

pages 92 to 95.

In accordance with its Articles of Association, the

Company made qualifying third-party indemnity

provisions for the benefit of its Directors against any

liability that attaches to them in defending proceedings

brought against them, to the extent permitted by

company law, which were in place throughout the

year and remain in force at the date of this report. In

addition, Directors’ and Officers’ liability insurance cover

was maintained throughout the year at the Company’s

expense and remains in force at the date of this report.

XPS Pensions Group plc Annual Report and Accounts 2025

101

Governance

Information Location within Annual Report

Likely future developments in the business of the Company Strategic Report (pages 10 to 19)

Inclusion and diversity Sustainability (page 28), Nomination Committee (page 69)

Employee involvement Sustainability (pages 26 to 29), Co-Chief Executive Officers’

Review (page 18) and S172 Statement (pages 22 and 23)

Directors’ share interests Directors’ Remuneration Report (pages 92 and 93)

Emissions and energy consumption Strategic Report (page 43)

Financial risk management objectives and policies Note 2 to the financial statements (page 125)

Directors’ regard to foster business relationships Strategic Report (pages 22 and 23)

Capital structure

The Company’s issued ordinary share capital and total

voting rights at 31 March 2025 and the date of this report

were 208,355,415 ordinary shares (each with a par value

of 0.05p and all fully paid). There were no ordinary shares

held in treasury. As at 31 March 2025, 4,701,149 ordinary

shares were held in the Employee Benefit Trust, and as at

the date of this report, 5,657,597 shares were held in the

Employee Benefit Trust. Further details of the Company’s

issued share capital are given in note 27 of the financial

statements on page 145.

The Company’s ordinary shares rank pari passu in

all respects with each other, including for voting

purposes and for all dividends. Each share carries the

right to one vote at general meetings of the Company.

Further information on the voting and other rights of

shareholders, including deadlines for exercising voting

rights, is set out in the Company’s Articles of Association

and in the explanatory notes that accompany the Notice

of the Annual General Meeting, which are available on the

Company’s website at www.xpsgroup.com.

Restrictions on shares

The Company’s ordinary shares are freely transferable

and there are no restrictions on the size of a holding.

Transfers of shares are governed by the provisions of

the Articles of Association and prevailing legislation.

The ordinary shares are not redeemable; however, the

Company may purchase any of the ordinary shares,

subject to prevailing legislation and the requirements

ofthe Listing Rules.

The Directors are not aware of any agreements

between holders of the Company’s shares that may

result in restrictions on the transfer of securities or on

voting rights. Awards of shares under the Company’s

Performance Share Plan incentive arrangement are

subject to restrictions on the transfer of shares prior

to vesting.

As at the date of this report, the Trustee of the Group’s

Employee Benefit Trust holds 5,657,597 ordinary shares in

the Company but has waived its entitlement to dividends

and does not seek to exercise the voting rights on

those shares.

Major interests in shares

The table on page 92 shows the interests in shares

(whether directly or indirectly held) notified to the

Company in accordance with Chapter 5 of the Disclosure

Guidance and Transparency Rules as at 31 March 2025

and 31 May 2025 (being the latest practicable date prior

to publication of this Annual Report).

Appointment and retirement of Directors

The Board may from time to time appoint one or more

additional Directors so long as the total number of

Directors does not exceed the limit of 12 prescribed in

the Articles of Association. Any person so appointed will

retire at the next Annual General Meeting and then be

eligible for re-election. The UK Corporate Governance

Code recommends that all Directors be subject to annual

re-election by shareholders. All Directors, except Alan

Bannatyne, will offer themselves for re-election at the

2025 Annual General Meeting. Alan Bannatyne will retire

from the Board following the AGM in September 2025,

due to shortly reaching nine years’ tenure.

Powers of Directors

The business of the Company shall be managed by the

Directors, who may exercise all powers of the Company,

subject to legislation, the provisions of the Articles

of Association and any directions given by special

resolution. The Articles of Association contain specific

provisions governing the Company’s power to borrow

money and also provide the powers to issue shares and

to make purchases of its own shares. In accordance

with the authorities granted at the 2024 Annual General

Meeting, the Directors are authorised, within certain

limits, to allot shares or grant rights to subscribe for

shares in the Company and to make market purchases

of the Company’s own shares representing up to 10%

of its sharecapital at that time. Details of the proposed

renewalof authorities of the Directors are set out in the

Notice of the 2025 Annual General Meeting.

XPS Pensions Group plc Annual Report and Accounts 2025

102

Political donations

No political contributions were made, or political

expenditure incurred, by the Company and its

subsidiaries during the year (FY 2024: £nil).

Provisions on change of control

The Company is subject to a change of control provision

in the following significant agreement:

The Company’s £120 million agreement with HSBC UK

Bank plc, Barclays Bank plc, Lloyds Bank plc, Credit

Industrial et Commercial–London Branch and Northern

Bank Ltd t/a Danske Bank in multicurrency revolving

facilities, with a further uncommitted facility of up to

£50 million, includes a customary provision permitting a

lending counterparty to (upon notice) cancel its lending

commitment to the Group and requires repayment

of its related loans following a change of control of

the Company.

The Company does not have agreements with any

Director or employee that would provide specific

compensation for loss of office or employment resulting

from a takeover, except that provisions of the Company’s

Performance Share Plan incentive arrangement may

cause awards to vest on a takeover.

Articles of Association

A copy of the full Articles of Association is available

on the Company’s website. The Company’s Articles of

Association may only be amended by a special resolution

of shareholders in a general meeting.

Auditor and disclosure of information to the auditor

In accordance with Section 418 of the Companies Act

2006, each of the Directors who were members of

the Board at the date of the approval of this report

confirms that:

• so far as the Director is aware, there is no relevant

audit information of which the Company’s auditor is

unaware; and

• the Director has taken all steps that they ought to have

taken as a Director to make themselves aware of any

relevant audit information and to establish that the

Company’s auditor is aware of that information.

The Company’s auditor, BDO LLP, has expressed its

willingness to continue in office and the Board has

agreed, based on the recommendation of the Audit & Risk

Committee, that a resolution for its reappointment will be

proposed at the forthcoming Annual General Meeting.

Annual General Meeting

Details of the forthcoming Annual General Meeting

are given in the Statement of Corporate Governance

on page 67.

Directors’ report continued

As at 31 March 2025 As at 31 May 2025

Shareholder

Number

of ordinary

Percentage

of total voting

rights

Number of

ordinary

Percentage

of total voting

rights

Abrdn 26,436,529 12.69% 24,672,241 11.84%

BlackRock 22 ,117,954 10.62% 22,432,675 10.77%

Mawer Investment Management 19,311,208 9.27% 20,442,033 9.81%

J.P. Morgan Asset Management 18,430,585 8.85% 18,352,599 8.81%

Gresham House Asset Management 15,060,542 7. 23% 12,007,524 5.76%

Montanaro Asset Management 8,660,000 4.16% 8,480,000 4.07%

XPS Pensions Group plc Annual Report and Accounts 2025

103

Governance

Listing Rule (LR) disclosures

The information required to be disclosed by LR6.6.1R can be found in the following locations:

Item Location

Interest capitalised None

Publication of unaudited financial information Not applicable

Details of long-term incentive schemes Details of the Company’s long-term incentive scheme can be

found in the Remuneration Committee Report on page 81

Waiver of emoluments by a Director None

Waiver of future emoluments by a Director None

Non-pre-emptive issues of equity for cash Not applicable

Non-pre-emptive issues of equity for cash in relation to major

subsidiary undertakings

Not applicable

Contracts of significance in which a Director is or was interested None

Provision of services by a controlling shareholder Not applicable

Shareholder waiver of dividend for the year and future dividends Dividend waiver by the Trustee of the Group’s Employee

Benefit Trust – see page 101 of this report

Agreements with controlling shareholder Not applicable

The Directors’ Report was approved by the Board of Directors of XPS Pensions Group plc. By order of the Board:

Snehal Shah

Chief Financial Officer

18 June 2025

XPS Pensions Group plc Annual Report and Accounts 2025

104

Directors’ responsibility statement

The Directors are responsible for preparing the Annual

Report and Accounts in accordance with applicable laws

and regulations.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the

Directors are required to prepare the Group financial

statements and have elected to prepare the Company

financial statements in accordance with UK-adopted

International Financial Reporting Standards. Under

company law the Directors must not approve the financial

statements unless they are satisfied that they give a true

and fair view of the state of affairs of the Group and

Company and of the profit or loss for the Group and

Company for that period. In preparing these financial

statements, the Directors are required to:

• select suitable accounting policies and then apply

themconsistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• state whether they have been prepared in accordance

with UK-adopted International Financial Reporting

Standards subject to any material departures disclosed

and explained in the financial statements;

• prepare the financial statements on the going concern

basis unless it is inappropriate to presume that the

Company will continue in business; and

• prepare a Directors’ Report, a Strategic Report and a

Directors’ Remuneration Report which comply with the

requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate

accounting records that are sufficient to show and explain

the Company’s transactions and disclose with reasonable

accuracy at any time the financial position of the

Company and enable them to ensure that the financial

statements comply with the Companies Act 2006 and,

as regards the Group financial statements, Article 4

of the IAS Regulation. They are also responsible for

safeguarding the assets of the Company and hence for

taking reasonable steps for the prevention and detection

of fraud and other irregularities.

The Directors are responsible for the maintenance and

integrity of the corporate and financial information

included on the Company’s website. Legislation in

the UK governing the preparation and dissemination

of financial statements may differ from legislation in

otherjurisdictions.

Statement of the Directors in respect of the

AnnualReport and Accounts

As required by the UK Corporate Governance Code, the

Directors confirm that they consider that the Annual

Report and Accounts, taken as a whole, is fair, balanced

and understandable and provides the information

necessary for shareholders to assess the Group’s position

and performance, business model and strategy. When

arriving at this position the Board was assisted by a

number of processes, including the following:

• the Annual Report is drafted by appropriate senior

management with overall co-ordination by Internal

Communications and Company Secretarial teams to

ensure consistency across sections;

• an extensive verification process is undertaken to

ensure factual accuracy;

• comprehensive reviews of drafts of the Annual Report

are undertaken by members of the Executive Board

and senior management team; and

• the final draft is reviewed by the Audit & Risk

Committee prior to consideration by the Board.

Responsibility statement

The Directors confirm that to the best of their knowledge:

• the Group financial statements, prepared in accordance

with UK-adopted International Accounting Standards,

give a true and fair view of the assets, liabilities,

financial position and profit or loss of the Group; and

• the Annual Report includes a fair review of the

development and performance of the business and the

financial position of the Group and the Parent Company

as a whole, together with a description of the principal

risks and uncertainties that they face.

Snehal Shah

Chief Financial Officer

18 June 2025

Financial statements

105

XPS Pensions Group plc Annual Report and Accounts 2025

Independent auditor’s report

to the members of XPS Pensions Group plc

Opinion on the financial statements

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31

March 2025 and of the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted international

accounting standards;

• the Company financial statements have been properly prepared in accordance with UK adopted international

accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of XPS Pensions Group plc (the “Company”) and its subsidiaries

(the“Group”) for the year ended 31 March 2025 which comprise the Consolidated Statement of Comprehensive

Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity, the

Consolidated Statement of Cash Flows, the Statement of Financial Position – Company, the Statement of Changes

in Equity – Company, the Statement of Cash Flows – Company, and notes to the financial statements, including

material accounting policy information. The financial reporting framework that has been applied in their preparation is

applicable law andUK adopted international accounting standards and as regards the Company financial statements,

asapplied in accordance with the provisions of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable

law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit

ofthe financial statements section of our report. We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the

Audit&Risk Committee.

Independence

Following the recommendation of the Audit & Risk Committee, we were appointed by the Members on 27 February 2013

to audit the financial statements for the year ended 31 March 2014 and subsequent financial periods, noting the listing

of the Company in the year ended 31 March 2017. The period of total uninterrupted engagement including retenders

and reappointments is 12 years, covering the years ended 31 March 2014 to 31 March 2025. We remain independent of

the Group and the Company in accordance with the ethical requirements that are relevant to our audit of the financial

statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have

fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by

that standard were not provided to the Group or the Company.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment

ofthe Group and the Company’s ability to continue to adopt the going concern basis of accounting included:

• assessing the reasonableness of assumptions in preparation of cash flow forecasts, with consideration of historical

performance, review and challenge of revenue growth rate assumptions and the Group’s ability to meet working

capital requirements over the going concern period;

• assessing the current period actuals against the prior period forecasts and also assessing the period to May 2025

actuals against current period forecast to determine forecasting ability;

• assessing the Directors’ going concern assessment and mathematical accuracy of cash flow forecasts and sensitivity

used in respect of the worst case scenario model using our knowledge of the business;

• reviewing the terms and period of the Group’s bank facility agreement and consideration of the sufficiency of the

facility available throughout the going concern period;

• considering the Group’s compliance with banking covenants and related headroom in light of the Directors’ worst

case scenario modelled;

• considering the options available to the Directors’ to mitigate the impact of the worst case scenario and whether

such actions are within their control; and

• considering the adequacy of the disclosures in the financial statements against the requirements of the accounting

standards and consistency of the disclosure with the forecast and worst case scenario.

106

XPS Pensions Group plc Annual Report and Accounts 2025

Independent auditor’s report continued

to the members of XPS Pensions Group plc

Conclusions relating to going concern continued

Based on the work we have performed, we have not identified any material uncertainties relating to events or

conditions that, individually or collectively, may cast significant doubt on the Group and the Company’s ability to

continue as a going concern for a period of at least twelve months from when the financial statements are authorised

for issue.

In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing

material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether

the Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the

relevant sections of this report.

Overview

Key audit matters

2025 2024

Valuation of contract assets – accrued income  

Materiality

Group financial statements as a whole

2025: £1,730,000 based on 3% of EBITDA

2024: £1,410,000 based on 3% of Total EBITDA less gain on disposal

(EBITDA – calculated as profit before tax, less depreciation, amortisation and finance costs)

An overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, the applicable financial

reporting framework and the Group’s system of internal control. On the basis of this, we identified and assessed the

risks of material misstatement of the Group financial statements including with respect to the consolidation process.

We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risks to

the group financial statements. We continually assessed risks throughout our audit, revising the risks where necessary,

with the aim of reducing the group risk of material misstatement to an acceptable level, in order to provide a basis for

our opinion.

Components in scope

There are 24 entities within the Group, including the Company. The nature of the entities in the group is as follows:

• 10 are trading entities which have a financial impact on the financial statements;

• 8 are dormant entities, and have no financial impact on the financial statements; and

• 6 entities are holding companies which hold investments in the trading entities in the Group, 4 of which have no

financial impact, being XPS Financing Limited, XPS Holding Limited, XPS Administration Holdings Limited and

XPSReading Limited.

With the exception of XPS SIPP Services Limited, whose revenue stream is managed from Stirling, Scotland, the

control environment is consistent across the Group as the finance and IT teams are centralised in one location, being

Reading, England.

Based on the nature of the entities within the Group, the relevant control environments, and the processes of the

entities, we identified 5 components of the Group, with each entity being assigned to one component.

We determined the 5 components to be in scope. We used a combination of audit and risk assessment procedures to

obtain sufficient appropriate evidence. Ouraudit procedures included:

• procedures on the entire financial information of the component including performing substantive procedures and

tests of operating effectiveness of controls; and

• procedures on one or more classes of transactions, account balances or disclosures.

Financial statements

107

XPS Pensions Group plc Annual Report and Accounts 2025

Components in scope continued

Procedures performed at the component level

We performed procedures to respond to Group risks of material misstatements at the component level that included

the following:

Component Component Name Entities Group Audit Scope

1 Company XPS Pensions Group Plc – the companyand

holding entity

Statutory audit and procedures on

the entire financial information of

thecomponent.

2 Core Pensions • XPS Pensions Limited – trading entity

• XPS Administration Limited – trading entity

• XPS Consulting Limited formerly called

XPS Consulting (Reading) Limited –

holding entity

• XPS Investment Limited – trading entity

• XPS Pensions Consulting Limited –

trading entity

• Penfida Limited – trading entity

• Pensions Software Solutions Limited –

trading entity

• XPS Pensions (Trigon) Limited – trading entity

• XPS Pensions (RL) Limited– trading entity

Procedures on the entire financial

information of the component.

3 SIPP Services XPS SIPP Services Limited – trading entity Procedures on one or more classes

of transactions, account balances or

disclosures.

4 Polaris

Actuaries and

Consultants

Polaris Actuaries and Consultants Limited –

trading entity

Procedures on one or more classes

of transaction, account balances

or disclosures and risk assessment

procedures.

5 Dormant and

other holding

entities

All other entities in the Group Risk assessment procedures.

The Group engagement team has performed all procedures directly and has not involved component auditors in the

Group audit.

Procedures performed centrally

We considered there to be a high degree of centralisation of financial reporting and commonality of controls, and

similarity of the group’s activities and business lines in relation to all financial statement areas. We therefore designed

and performed procedures centrally in all areas.

The group operates a centralised IT and finance system that supports IT processes for the components, with the

exception of Polaris following its acquisition. This IT and finance system was subject to specified risk-focused audit

procedures, predominantly the testing of the relevant IT general controls andITapplication controls.

Changes from the prior year

There have been no significant changes to the Group’s audit scope from the prior year.

Climate change

Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial

statements included:

• enquiries and challenge of management to understand the actions they have taken to identify climate-related risks

and their potential impacts on the financial statements and adequately disclose climate-related risks within the

annual report;

• our own qualitative risk assessment taking into consideration the sector in which the Group operates and how

climate change affects this particular sector; and

• review of the minutes of Board, Audit & Risk Committee and Sustainability Committee meetings and performed

arisk assessment as to how the impact of the Group’s commitment as set out in the Strategic Report may affect

thefinancial statements and our audit.

108

XPS Pensions Group plc Annual Report and Accounts 2025

Independent auditor’s report continued

to the members of XPS Pensions Group plc

Climate change continued

We challenged the extent to which climate-related considerations, including the expected cash flows from the

initiatives and commitments have been reflected, where appropriate, in management’s going concern assessment

andviability assessment.

We also assessed the consistency of management’s disclosures included as ‘Statutory Other Information’ including

Task Force on Climate-related Financial Disclosures (TCFD) and the streamlined Energy and Carbon Reporting (SECR)

from page 43 within the Annual Report and with our knowledge obtained during the audit.

Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters that were materially

affected by climate-related risks and related commitments.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the

financial statements of the current period and include the most significant assessed risks of material misstatement

(whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit

strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters

wereaddressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,

and we do not provide a separate opinion on these matters.

Key audit matter How the scope of our audit addressed the key audit matter

Valuation of

contract assets –

accrued income

Refer to the “Critical

accounting estimates

and judgements” section

and the “Revenue”

section in Note 1. Further

information is disclosed

in Note 19 of the

Financial Statements.

The Group has a total contract asset – accrued

income of £19.9 million (FY 2024: £16.7 million) as

disclosed in note 19 of the financial statements.

Valuation of contract assets – accrued

income was considered a fraud risk due to

the recognition being highly subjective and

involving management’s judgements around the

amount of revenue to be billed in the future.

Management’s judgement relates to the amount

expected to be invoiced after the year end,

taking account of various inputs including

the time recorded against each client project,

expected recoverability levels based on past

experience, the nature of the work undertaken,

and to what extent the performance obligations

have been met.

The risk around the valuation of contract

assets – accrued income has been determined

to be both over and understatement through

judgements made by management in its

valuation at year end.

This results in the valuation of contract assets

– accrued income being assessed as an area of

significant risk of material misstatement, and

therefore a key audit matter.

The key audit matter was assessed by selecting

a sample of contract assets – accrued income

balances from the accrued income listing

and obtaining evidence to corroborate the

judgements made in relation to the valuation of

each contract asset balance selected, as at the

year end. The evidence obtained included:

• underlying gross timesheet data

recorded on the project from the time

recording system;

• subsequent invoices raised post-year end;

• source contracts including contract

variations;

• other evidence communicating agreed

project rates or fees; and

• the related statement of activity that

accompanies certain invoices; and

• subsequent cash receipt in the bank

statements.

From the above we critically analysed the suite

of evidence available against the management

judgements to corroborate the contract assets –

accrued income recognised.

We have challenged those transactions where

the contract asset - accrued income value is

different from the subsequent invoice raised.

We have evaluated the design and

implementation of the relevant controls within

the time recording system.

Key observations:

Based on the procedures undertaken, we

did not identify any evidence that suggests

that the judgement applied by management

isinappropriate.

Financial statements

109

XPS Pensions Group plc Annual Report and Accounts 2025

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of

misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could

influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a

lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements

below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified

misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial

statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and

performance materiality as follows:

Group financial statements Company financial statements

2025 2024 2025 2024

Materiality 1,730,000 1,410,000 1,300,000 1,057,000

Basis for

determining

materiality

3% of EBITDA 3% of Total EBITDA less

gain on disposal

4% of Company Net

Assets capped at 75%

of Group Materiality

4% of Company Net

Assets capped at 75%

of Group Materiality

Rationale for the

benchmark applied

EBITDA is considered to be the consistent

benchmark that is of interest to the majority of

users of the financial statements based on

investor and stakeholder expectations.

75% of Group materiality is considered appropriate

given the assessment of the component’s

aggregation risk.

Performance

materiality

1,300,000 1,057,000 975,000 790,000

Basis for

determining

performance

materiality

75% 75% 75% 75%

Rationale for the

percentage applied

for performance

materiality

These thresholds are based on our knowledge of the Group and Company, control environment over

financial reporting, history of misstatements in previous periods and management’s attitude to

proposed adjustments.

Component materiality

For the purposes of our Group audit opinion, we set performance materiality for each component of the Group,

apart from the Company whose materiality and performance materiality are set out above, based on a percentage

of between 12% and 85% of Group performance materiality (FY 2024: 32% and 60% of Group materiality) dependent

on a number of factors including size and our assessment of the risk of material misstatement of those components.

Component performance materiality ranged from £150,000 to £1,100,000 (FY 2024: £450,000 to £850,000).

Reporting threshold

We agreed with the Audit & Risk Committee that we would report to them all individual audit differences in excess

of £69,000 (2024: £56,000). We also agreed to report differences below this threshold that, in our view, warranted

reporting on qualitative grounds.

Other information

The directors are responsible for the other information. The other information comprises the information included in the

document entitled “Annual Report and Accounts” other than the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise

explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to

read the other information and, in doing so, consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially

misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine

whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we

have performed, we conclude that there is a material misstatement of this other information, we are required to report

that fact.

We have nothing to report in this regard.

110

XPS Pensions Group plc Annual Report and Accounts 2025

Independent auditor’s report continued

to the members of XPS Pensions Group plc

Corporate governance statement

The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability

and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the

UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the

Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained

during the audit:

Going concern

andlonger-term

viability

• the Directors’ statement with regards to the appropriateness of adopting the going concern

basis of accounting and any material uncertainties identified set out on page 49;

• the Directors’ explanation as to their assessment of the Group’s prospects, the period this

assessment covers and why the period is appropriate set out on page 59; and

• the Directors statement on whether they have a reasonable expectation that the Group will be

able to continue in operation and meet its liabilities set out on page 59.

Other Code

provisions

• the Directors’ statement on fair, balanced and understandable set out on page 104;

• the Board’s confirmation that it has carried out a robust assessment of the emerging and

principal risks set out on page 58;

• the section of the annual report that describes the review of effectiveness of risk management

and internal control systems set out on pages 52 to 58; and

• the section describing the work of the Audit & Risk Committee set out on pages 71 to 73.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required

by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below:

Strategic report

and Directors’

report

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the financial year for

which the financial statements are prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable

legal requirements.

In the light of the knowledge and understanding of the Group and Company and its environment

obtained in the course of the audit, we have not identified material misstatements in the strategic

report or the Directors’ report.

Directors’

remuneration

In our opinion, the part of the Directors’ remuneration report to be audited has been properly

prepared in accordance with the Companies Act 2006.

Matters on which

we are required

to report by

exception

We have nothing to report in respect of the following matters in relation to which the Companies

Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Company, or returns adequate for our

audit have not been received from branches not visited by us; or

• the Company financial statements and the part of the Directors’ remuneration report to be

audited are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation

of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as

the Directors determine is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease

operations, or have no realistic alternative but to do so.

Financial statements

111

XPS Pensions Group plc Annual Report and Accounts 2025

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error

and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line

with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

• our understanding of the Group and the industry in which it operates;

• discussion with management and those charged with governance; and

• obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations.

We considered the significant laws and regulations to be the applicable accounting framework, UK tax legislation, UK

Listing Rules, Companies Act 2006, and labour regulations and tax laws in key territories which the Group operates in.

The Group is also subject to laws and regulations where the consequence of non-compliance could have a material

effect on the amount or disclosures in the financial statements, for example through the imposition of fines or

litigations. We identified such laws and regulations to be the health and safety legislation, employment law, consumer

protection laws and regulations, and the Financial Conduct Authority regulations, including client money rules.

Our procedures in respect of the above included:

• review of minutes of meetings of the Board of Directors for any instances of non-compliance with laws and

regulations;

• review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws

andregulations;

• review of financial statement disclosures and agreeing to supporting documentation;

• involvement of tax specialists in the audit; and

• review of legal expenditure accounts to understand the nature of expenditure incurred.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk

assessment procedures included:

• enquiry with management, those charged with governance, and the Audit & Risk Committee regarding any known

or suspected instances of fraud;

• obtaining an understanding of the Group’s policies and procedures relating to:

• detecting and responding to the risks of fraud; and

• internal controls established to mitigate risks related to fraud;

• review of minutes of meetings of the Board of Directors for any known or suspected instances of fraud;

• discussion amongst the engagement team as to how and where fraud might occur in the financial statements;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of

material misstatement due to fraud; and

• performing an assessment of the Group’s IT general control environment and as part of this work, we tested the

operating effectiveness of IT general controls over the financial systems including the general ledger system and

the time recording system. We also tested IT application level controls in relation to the time recording system in the

revenue cycle.

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of

controls, specifically the risk of management overriding the control environment to either overstate or understate the

EBITDA reported, and to overstate or understate the valuation of contract assets – accrued income.

112

XPS Pensions Group plc Annual Report and Accounts 2025

Independent auditor’s report continued

to the members of XPS Pensions Group plc

Auditor’s responsibilities for the audit of the financial statements continued

Fraud continued

Our procedures in respect of the above included:

• testing a sample of journal entries throughout the year, which met defined risk criteria, by agreeing to supporting

documentation;

• in response to the risk of fraud in contract assets – accrued income, performing the procedures set out in the

‘KeyAudit Matters’ section of this report; and

• assessing in aggregate material estimates and judgements made by management that affect EBITDA for bias.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team

members who were all deemed to have appropriate competence and capabilities and remained alert to any indications

of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements,

recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting

one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations

or through collusion. There are inherent limitations in the audit procedures performed and the further removed

non-compliance with laws and regulations is from the events and transactions reflected in the financial statements,

theless likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members

those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s

members as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Radford (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, United Kingdom

19 June 2025

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Financial statements

113

XPS Pensions Group plc Annual Report and Accounts 2025

Consolidated statement of comprehensive income

for the year ended 31 March 2025

				Year ended 31 March 2025	Year ended 31 March 2024
			Non-trading		Non-trading
			and			and
		Trading	exceptional		Trading	exceptional
		items	items 1	Total	items	items 1	Total
	Note	£’000	£’000	£’000	£’000	£’000	£’000
Revenue	7	231 ,785	—	231 ,785	1 99, 432	—	1 9 9,432
Other operating income	5	—	988	988	—	92	92
Operating expenses	8	(168, 888)	(19,7 03)	(1 8 8 , 591)	(1 4 9 , 9 6 0)	(1 5 ,1 2 8)	(1 6 5 ,0 8 8)
Gain on disposal		—	—	—	—	32, 5 3 8	32, 5 38
Profit/(loss) from operating activities		62 , 8 97	(18,71 5)	4 4 ,1 8 2	4 9 , 47 2	1 7, 5 0 2	6 6 , 974
Finance income	13	109	—	109	50	—	50
Finance costs	13	(3 , 5 41)	—	(3 , 5 41)	(4 , 5 4 3)	—	(4 , 5 4 3)
Profit/(loss) before tax		59,4 65	(18,715)	40,750	4 4 , 97 9	1 7, 5 0 2	62,4 8 1
Income tax (expense)/credit	14	(14, 3 53)	3,946	(1 0, 4 07)	(11,48 3)	3 ,1 69	(8 , 3 1 4)
Profit/(loss) after tax and total
comprehensive income/(loss) for the year		4 5 ,11 2	(14 , 769)	30, 343	3 3 ,49 6	20, 67 1	5 4,1 6 7
Memo
EBITDA		69,676	(11,666)	58 ,01 0	55 ,295	24 , 5 3 6	79, 83 1
Depreciation and amortisation	15, 16, 17	(6, 7 7 9)	(7, 0 4 9)	(13, 8 28)	(5,823)	(7, 0 3 4)	(12 ,8 57)
Profit/(loss) from operating activities		62 , 8 97	(18,71 5)	4 4 ,1 8 2	4 9 , 47 2	1 7, 5 0 2	6 6 , 974
		Pence		Pence	Pence		Pence
Earnings per share attributable to the ordinary equity holders of the Company:		Adjusted			Adjusted
Profit or loss:
Basic earnings per share	32	21.9	—	14.7	16. 2	—	26 . 2
Diluted earnings per share	32	20. 6	—	13 . 8	15 .3	—	24 .7

1 See note 5 for additional information regarding non-trading and adjusting items.

The notes on pages 117 to 149 form part of these financial statements.

114

XPS Pensions Group plc Annual Report and Accounts 2025

Consolidated statement of financial position

as at 31 March 2025

Note

		31 March	31 March
		2025	2024
		£’000	£’000
Assets
Non-current assets
Property, plant and equipment	15	5 , 278	3 , 976
Right-of-use assets	16	13,8 35	8 ,8 92
Intangible assets	17	222,998	2 0 8 , 07 0
Other long-term receivables	18	5 , 97 1	—
		248 ,08 2	2 20 , 938
Current assets
Trade and other receivables	19	60,6 83	50,922
Cash and cash equivalents	20	14 ,7 17	10 ,00 5
		75,4 00	60 ,9 27
Total assets		323 ,48 2	281 , 865
Liabilities
Non-current liabilities
Loans and borrowings	21	5 4 ,021	23,3 8 6
Lease liabilities	16	12 ,03 8	7, 2 9 5
Provisions	23	2 , 903	1, 802
Trade and other payables	25	670	—
Deferred tax liabilities	24	16,138	1 5 , 593
		85 , 7 70	4 8 , 07 6
Current liabilities
Lease liabilities	16	2 ,915	1 , 872
Provisions	23	2 , 70 0	1, 914
Trade and other payables	25	46, 456	4 3, 722
Current income tax liabilities	26	234	427
		52 , 305	4 7, 9 3 5
Total liabilities		13 8 ,07 5	9 6 ,011
Net assets		1 8 5 , 4 07	185, 854
Equity
Equity attributable to owners of the Parent
Share capital	27	104	104
Share premium	28	1 ,78 6	1 ,7 8 6
Merger relief reserve	28	4 8 ,6 87	4 8 , 6 87
Investment in own shares held in trust	28	(1 5 ,14 2)	(2,925)
Retained earnings	28	1 49, 97 2	13 8 , 202
Total equity		1 8 5 , 4 07	185, 854

The notes on pages 117 to 149 form part of these financial statements.

The financial statements were approved by the Board of Directors on 18 June 2025 and were signed on its behalf by:

Snehal Shah

Chief Financial Officer

18 June 2025

Registered number: 08279139

Financial statements

115

XPS Pensions Group plc Annual Report and Accounts 2025

Consolidated statement of changes in equity

for the year ended 31 March 2025

			Merger	Investment
	Share	Share	relief	in own	Retained	Total
	capital	premium	reserve	shares	earnings	equity
	£’000	£’000	£’000	£’000	£’000	£’000
Balance at 1 April 2023	104	1 ,78 6	4 8 , 6 87	(1 , 3 5 0)	1 0 0,057	149, 28 4
Profit after tax and total comprehensive income for the year	—	—	—	—	5 4 ,1 67	5 4,1 6 7
Contributions by and distributions to owners:
Dividends paid (note 34)	—	—	—	—	(18 ,025)	(1 8 ,025)
Dividend equivalents paid on vested share options	—	—	—	—	(576)	(576)
Shares purchased by Employee Benefit Trust for cash	—	—	—	(5 , 621)	—	(5 , 62 1)
Exercise of share options settled from the Employee
BenefitTrust	—	—	—	4,046	(4,019)	27
Share-based payment expense – IFRS 2 charge (note 12)	—	—	—	—	4 ,91 0	4, 910
Deferred tax movement in respect of share-based payment
expense (note 24)	—	—	—	—	1 ,1 67	1 ,1 67
Current tax movement in respect of share-based
paymentexpense	—	—	—	—	52 1	52 1
Total contributions by and distributions to owners	—	—	—	(1 , 575)	(1 6 , 02 2)	(1 7, 59 7)
Balance at 31 March 2024	104	1 ,78 6	4 8 ,6 87	(2,925)	13 8 , 202	185, 854
Balance at 1 April 2024	104	1 ,78 6	4 8 ,6 87	(2,925)	1 38 , 202	185, 854
Profit after tax and total comprehensive income for the year	—	—	—	—	30, 3 43	30, 343
Contributions by and distributions to owners:
Dividends paid (note 34)	—	—	—	—	(2 2 ,1 8 5)	(2 2 ,1 8 5)
Dividend equivalents paid on vested share options	—	—	—	—	(591)	(591)
Shares purchased by Employee Benefit Trust for cash	—	—	—	(1 8 ,7 1 5)	—	(1 8 ,7 1 5)
Exercise of share options settled from the Employee
BenefitTrust	—	—	—	6,49 8	(5 , 6 3 0)	868
Share-based payment expense – IFRS 2 charge (note 12)	—	—	—	—	5 ,946	5,946
Deferred tax movement in respect of share-based
paymentexpense (note 24)	—	—	—	—	2,36 6	2, 366
Current tax movement in respect of share-based
paymentexpense	—	—	—	—	1 , 521	1, 52 1
Total contributions by and distributions to owners	—	—	—	(1 2, 2 17)	(1 8 ,57 3)	(3 0 , 7 9 0)
Balance at 31 March 2025	104	1, 786	48 , 6 87	(15 ,1 42)	149 , 972	1 8 5 , 407

The notes on pages 117 to 149 form part of these financial statements.

116

XPS Pensions Group plc Annual Report and Accounts 2025

Consolidated statement of cash flows

for the year ended 31 March 2025

Note

		Year ended	Year ended
		31 March	31 March
		2025	2024
		£’000	£’000
Cash flows from operating activities
Profit for the year		30, 34 3	5 4 ,1 67
Adjustments for:
Depreciation	15	1 ,03 4	892
Depreciation of right-of-use assets	16	2 ,9 62	2 , 8 87
Amortisation	17	9, 832	9,06 1
Finance income	13	(1 0 9)	(5 0)
Finance costs	13	3 , 5 41	4,5 43
Gain on acquisition of business	5	(98 8)	—
Gain on sale of business, before tax		—	(3 4 , 6 3 9)
Loss on disposal of right-of-use assets		—	1 17
Share-based payment expense	12	5,946	4 ,91 0
Other operating income	5	—	(9 2)
Income tax expense	14	1 0 , 4 07	8, 314
		62 ,9 68	5 0 ,11 0
Increase in trade and other receivables		(13 , 5 09)	(7, 4 6 2)
Increase in trade and other payables		2 ,06 0	1 1 , 9 93
Increase/(decrease) in provisions		1, 4 49	(3 7 9)
		52 ,9 68	5 4, 262
Income tax paid		(11, 1 52)	(1 1, 33 1)
Net cash inflow from operating activities		41 , 8 1 6	42 , 93 1
Cash flows from investing activities
Finance income received	13	109	50
Acquisition of subsidiary, net of cash acquired	6	(1 3 , 7 74)	(4 0 5)
Purchases of property, plant and equipment	15	(2 ,101)	(1 , 8 51)
Purchases of intangibles	17	(6 ,0 8 9)	(5,655)
Disposal of business		—	3 7, 0 3 5
Net cash (outflow)/inflow from investing activities		(21, 8 55)	2 9 , 1 74
Cash flows from financing activities
Proceeds from loans net of capitalised costs		39,333	8,000
Repayment of loans		(9 ,000)	(5 2, 000)
Payment relating to extension of loan facility		(33 2)	(2 0 0)
Exercise of share options settled from the EBT		868	27
Purchase of ordinary shares by EBT		(18,71 5)	(5 , 621)
Interest paid		(2, 312)	(3 ,9 05)
Lease interest paid		(3 18)	(3 3 1)
Payment of lease liabilities		(1,99 7)	(2 , 7 5 4)
Dividends paid to the holders of the Parent	34	(22 ,185)	(1 8,025)
Dividend equivalents paid on vesting of share options		(591)	(576)
Net cash outflow from financing activities		(15 , 249)	(75,385)
Net increase/(decrease) in cash and cash equivalents		4 ,7 12	(3 , 2 8 0)
Cash and cash equivalents at start of year		1 0,005	13, 285
Cash and cash equivalents at end of year	20	14 ,7 17	10 ,00 5

The notes on pages 117 to 149 form part of these financial statements.

Financial statements

117

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements

for the year ended 31 March 2025

1 Accounting policies

XPS Pensions Group plc (the “Company”) is a public limited company incorporated in the UK. The principal activity of

the Group is consulting and administration services relating to UK pension schemes and insurers. The registered office

is Phoenix House, 1 Station Hill, Reading RG1 1NB. The Group financial statements consolidate those of the Company

and its subsidiaries (together referred to as the “Group”).

Basis of preparation

These consolidated financial statements have been prepared in accordance with UK-adopted International Accounting

Standards. The consolidated financial statements have been prepared under the going concern basis.

The preparation of financial statements in accordance with the requirements of International Financial Reporting

Standards (IFRS) requires management to exercise its judgement in the process of applying the Group’s accounting

policies. The critical areas involving a higher degree of judgement or complexity, or areas where assumptions and

estimates are significant to the financial statements, are disclosed at the end of this section.

The material accounting policies adopted in the preparation of the financial statements are set out below. The policies

have been consistently applied to all the periods presented, unless otherwise stated.

Functional and presentation currency

The financial statements are presented in British pounds which is the Company’s functional currency. Figures are

rounded to the nearest thousand.

Measurement convention

The financial information is prepared on the historical cost basis.

Basis of consolidation

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if

all three of the following elements are present: power over the investee; exposure to variable returns from the investee;

and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts

and circumstances indicate that there may be a change in any elements of control.

The consolidated financial information presents the results of the Company and its subsidiaries (the “Group”) as

if they formed a single entity. Intercompany transactions and balances between Group companies are therefore

eliminated in full.

The consolidated financial information incorporates the results of business combinations using the acquisition method.

In the statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially

recognised at their fair values at the acquisition date, with the exception of right-of-use assets and lease liabilities,

which are measured at the present value of the lease liability discounted at acquisition date incremental borrowing

rate (a rate that represents the amount that would be charged to acquire an asset of similar value for a similar period),

with an adjustment to right-of-use assets to reflect favourable/non-favourable lease terms. The results of the acquired

operations are included in the consolidated statement of comprehensive income from the date on which control is

obtained. They are deconsolidated from the date on which control ceases.

Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation. For items acquired as part

of a business combination, cost comprises the deemed fair value of those items at the date of acquisition. Depreciation

on those items is charged over their estimated remaining useful lives from that date.

Depreciation is charged to profit and loss in the statement of comprehensive income on a straight-line basis over the

estimated useful lives of each part of an item of property, plant and equipment. Estimated useful lives are as follows:

• Office equipment 3 to 10 years

• Leasehold improvements Over the remaining life of the lease

• Fixtures and fittings 3 to 10 years

118

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

1 Accounting policies continued

Going concern

IFRS accounting standards require the Directors to consider the appropriateness of the going concern basis when

preparing the financial statements. The Directors have taken notice of the Financial Reporting Council guidance,

“Guidance on the going concern basis of accounting and reporting on solvency and liquidity risks”, which requires the

reasons for this decision to be explained.

Management has prepared cash flow forecasts up to 31 October 2026, which the Directors have approved. This

includes the 12-month period from the date of approval of these financial statements. These forecasts show that

during that period the Group is expected to generate sufficient cash from its operations to settle its liabilities as they

fall due without the requirement for additional borrowings. This period has been chosen as October is the lowest

point in the Group’s working capital and cash cycle. Inflationary increases have been modelled using the OBR inflation

forecasts for that period, and interest rate changes have been included in the forecasts based on latest market projections.

The Group agreed a new revolving credit facility in March 2025, which replaced the previous facility, which was due

to end in October 2026. The new facility gives the Group access to a revolving credit facility of £120 million with

an accordion of £50 million, and this facility is in place for four years. The facility is subject to two covenants – net

leverage and interest cover. These covenants were not breached during the financial year, nor are any breaches

expected in the cash flow forecast. The Group does not have any non-financial covenants.

Management has also performed some scenario modelling to further assess the going concern position of the Group.

Firstly, management has modelled a scenario which threatens the going concern position, considering the sooner

of the point at which the banking covenants are breached or the Group requiring additional funding. In this worst

case scenario, revenue is modelled to decrease significantly, partially offset with a reduction in staff bonuses. The

headroom between this scenario and current performance, and the budget, is significant and a decrease of this

magnitude is considered to be extremely unlikely. In addition, the Group has several additional cost reduction and

cash preservation levers it could utilise, which include managing staff costs through a hiring freeze or reduction in

workforce, a reduction in capital expenditure, and a reduction of dividends if this worst case scenario was to happen.

Another scenario modelled was a reasonable downside scenario, where no growth is experienced in revenues not

related to compliance. The result of this reasonable downside scenario was that even with no actions to reduce

costs in line with the revenue decrease, the Group remained profitable and complied comfortably with its banking

covenants. This reasonable downside scenario is considered to be very unlikely, as historically the Group has always

performed discretionary work for its customers.

The Directors have reviewed the historical accuracy of the Group’s budgets. The Group’s performance was compared

to the budget, and actual revenue was within 1% of the forecast figure, and adjusted EBITDA was within 4% of the

forecast figure. Actual results were ahead of forecast in both cases. This demonstrates that the Group’s forecasting

process is at a sufficient standard to be able to place reliance on it when making a going concern assessment. The

results of the two months post-year end are in line with forecasts. The Directors, after reviewing the Group’s budget

and longer-term forecast models, including the worst case scenario referred to above, conclude that the Group has

adequate resources to continue in operational existence for the foreseeable future and they continue to adopt the

going concern basis of accounting in preparing these annual financial statements.

In terms of the wider macroeconomic and financial situation, the increase in the rate of inflation has fallen significantly

since the prior year although management is monitoring the situation with Russia and Ukraine as well as the situation

in the Middle East as any further escalations could trigger further price increases with potential for related interest rate

increases. The Group does have protection for any increases in the inflation rate built into customer contracts, which

stipulate that the price charged can be increased by an inflationary amount. Pricing on indexation-linked contracts

continues to be reviewed and was uplifted accordingly as the contracts were renewed throughout the current year,

and into the following year. The Group demonstrated its ability to perform strongly in a high-inflation environment in

recent years. Whilst higher interest rates have led to higher finance expenses, this has been modelled in the Group’s

forecasts and is not considered a significant risk.

Intangible assets and goodwill

Goodwill represents amounts arising on acquisition, being the difference between the cost of the acquisition and the

net fair value of the identifiable assets and liabilities acquired on a business combination. If those amounts are less

than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit

or loss as a gain on purchase. Identifiable intangibles are those which can be sold separately or which arise from legal

rights regardless of whether those rights are separable.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units for

the purposes of impairment testing and is not amortised. It is tested annually for impairment.

Externally acquired intangible assets are stated at cost less accumulated amortisation and impairment losses.

Acquired software is valued based on replacement cost valuations where identifiable or at cost less accumulated amortisation

and impairment. Internally produced software is valued at cost less accumulated amortisation and impairment.

Customer relationships are valued based on the net present value of the excess earnings generated by the revenue

streams over their estimated useful lives.

Financial statements

119

XPS Pensions Group plc Annual Report and Accounts 2025

1 Accounting policies continued

Intangible assets and goodwill continued

Amortisation is included in operating expenses in the statement of comprehensive income over the estimated useful

lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life, such as goodwill,

are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the

date they are available for use. Estimated useful lives are as follows:

• Goodwill Indefinite life

• Customer relationships 7 to 20 years, straight-line method

• Brands 10 years, straight-line method

• Software 5 to 10 years, straight-line method

Impairment of non-financial assets

Assets that have an indefinite useful life, for example goodwill or intangible assets not ready for use, are not subject

to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for

impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable

amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the

purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable

cash inflows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are

reviewed for possible reversal of the impairment at each reporting date .

Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for

which the asset was acquired.

Amortised cost

Amortised cost includes non-derivative financial assets where they are held within a business model whose objective

is to hold the financial asset in order to collect contractual cash flows and those contractual terms give rise to cash

flows on specified dates that are solely payments of principal and interest on the principal amount outstanding. These

assets are included in non-current assets if their maturity is greater than 12 months. Trade receivables are stated

initially at fair value then measured at amortised cost less provisions for impairment. The Group applies the IFRS 9

simplified approach to measuring expected credit losses using a lifetime expected credit loss provision. The expected

loss rates are based on the Group’s historical credit losses experienced over the three-year period prior to year end.

The historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors

affecting the Group’s customers. Any impairment required is recorded in the statement of comprehensive income.

Cash and cash equivalents comprise cash balances.

Financial liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability

was acquired. The Group’s accounting policy for each category is as follows:

Fair value through profit or loss

The Group does not currently have any liabilities which fall into this category.

Other financial liabilities

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to

initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and

redemption value being recognised in the statement of comprehensive income over the period of the borrowings on

an effective interest basis. When borrowings are extinguished, any difference between the cash paid and the carrying

value is recognised in the statement of comprehensive income.

Trade payables and other short-term monetary liabilities represent liabilities for goods and services received by the

Group prior to the end of the financial year which are unpaid. The amounts within trade payables are unsecured. They

are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

120

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

1 Accounting policies continued

Provisions

The Group has provisions for the following items:

• dilapidations provisions relate to the estimated cost to put leased premises back to the required condition expected

under the terms of the lease. These include provisions for required dilapidations along with provisions where

leasehold improvements have been made that would require reinstatement back to the original status on exit.

These are uncertain in timing as leases may be terminated early or extended. To the extent that exits of premises

are expected within 12 months of the end of the year they are shown as current;

• professional indemnity provisions relate to complaints against the Group. The amount provided is based on

management’s best estimate of the likely liability. These are recognised as a gross amount, with any amounts

covered by insurance recognised as an asset within current assets, in line with IAS 37; and

• social security costs provisions represent estimates of the Group’s National Insurance contributions liability on the

cost of the Group’s Performance Share Plans and Senior Equity Plans.

Employee Benefit Trust (EBT)

As the Group is deemed to have control of its EBT, it has been aggregated within the accounts of XPS Pensions Group

plc, and therefore consolidated for the purposes of the consolidated financial statements. The EBT’s investment in the

Group’s shares is deducted from equity in the consolidated statement of financial position as if it were treasury shares.

Consideration paid (or received) for the purchase (or sale) of these shares is recognised directly in equity. The cost

of shares held is presented as a separate reserve (the “investment in own shares”). As the shares are typically used to

satisfy vested share options, the difference between the option cost and the weighted average cost of the shares is

charged to retained earnings.

The equity-settled share-based payment expense represents the amount of share awards made by the EBT on behalf

of the sponsoring entity (XPS Pensions Group plc).

EBT equity-settled awards, which vest immediately on issue, are measured at the fair value of the shares issued on

the date of the award, representing the bid price of the shares. The share-based payment expense is charged to the

consolidated statement of comprehensive income.

Revenue

Revenue, which excludes value added tax, represents the value of employee benefit consultancy and related business

services supplied. Revenue is derived mainly from sales made in the United Kingdom. Revenue derived from outside

the United Kingdom is immaterial.

Amounts recognised as revenue but not yet billed are reflected in the consolidated statement of financial position as

contract assets. This is work where there is no unconditional right to receive the cash, but work has been performed in

line with performance obligations. Amounts billed in advance of work performed are recognised as deferred income

and presented in the statement of financial position as contract liabilities.

Performance obligations and timing of revenue recognition

Performance obligations in contracts with customers are typically satisfied as services are rendered. Where work

performed in a period has not yet been billed, the value of this will be included in contract assets – accrued income at

the period end. In most cases, revenue is recognised on an over time basis. This is because effort has been expended

by the business on fulfilling the performance obligations in the contract and the contracts would require payment for

time and effort spent by the Group on progressing the contracts in the event of the customer cancelling the contract

for any reason other than the Group’s failure to perform its obligations under the contract. Invoices are in most cases

raised monthly, based on timesheet data for Actuarial and consulting and Investment consulting. For Administration

services, invoices are typically raised monthly based on services provided. Payment is typically due 30 days from date of

invoice. Additionally, the Group has a SSAS and SIPP business which provides services to small self-administered pension

schemes and self-invested pensions plans. The Group also receives income on corporate and customer bank deposits

within the SSAS and SIPP business based on a rate linked to the Bank of England base rate.

The Group has a number of customers who are on a fixed price contract. This contract covers a number of services

(actuarial, administration and investment), most of which are ongoing and therefore require no revenue recognition

adjustment to the regular invoice issued to the customer. These are recognised monthly at the time of billing, as the

benefit the customer receives as the work is done is largely in line with the amount billed each month.

For some fixed price customers, an element of the fixed fee includes the triennial valuation of their defined benefit

pension schemes, which is a distinct performance obligation. Under IFRS 15, the Group has assessed these contracts

and has determined that an adjustment is needed to recognise the revenue for the performance obligation relating to

the triennial valuations in the specific periods that the work is undertaken.

For the fixed fee customers where an adjustment is required, payment is made monthly over a three-year period. The

revenue recognition for triennial valuations takes place over the 15-month period after the valuation date, so there can

be up to 35 months’ variance between the date of billing and revenue recognition. Any variance between the timing of

payment and the timing of revenue recognition will be recognised as either a contract asset (where the performance

obligations met to date exceed the value billed from the contract to date) or a contract liability (where the value billed

to date from the contract exceeds the performance obligations met to date).

Financial statements

121

XPS Pensions Group plc Annual Report and Accounts 2025

1 Accounting policies continued

Revenue continued

Determining the transaction price and allocating amounts to performance obligations

For the contracts where an adjustment is required, the Group has identified the element of the fixed fee that is

attributable to the triennial valuation. This has been calculated based on the expected time required to perform these

obligations for each specific customer. To ensure that the revenue is allocated to the relevant period, the Group has

determined the timespan for the triennial valuation work, and the separate stages of this work. A percentage has been

applied to each stage, based on the proportion of total effort.

Judgement is required for these contracts in determining the value attributable to the triennial valuation work, and

also to the stage of completion at each reporting period. The judgements made are based on experience, and have

been validated by comparison to timesheet data to measure work performed over the three-year contract window.

For the McCloud work being performed by the Administration business, judgement is required to assess the cost to

complete and therefore the revenue to be recognised at a point in time.

The remainder of revenue from fixed fee contracts is recognised on a monthly basis, as the services provided tend

to be evenly spread over the life of the contract.

Services provided under contracts which do not include a fixed fee are recognised at a price quoted within the

contract which typically varies depending on the level of seniority of the employee providing the service. Commission

income is recognised on renewal of scheme membership, as the performance obligations are met at the time the

contract is won or renewed with the insurer.

There are no significant judgements relating to revenue recognition for the SIP business.

Alternative performance measures (APMs)

The Group presents APMs within its Annual Report and Accounts; these APMs are not defined under the requirements

of IFRS. These include those that are visible from the consolidated statement of comprehensive income and the

following key APMs: adjusted EBITDA, Net debt/adjusted EBITDA, adjusted diluted earnings per share, and cash

conversion. Management believes that the presentation of these APMs provides stakeholders with additional

information on the underlying performance of the business, as well as aiding comparability between reporting periods

by adjusting for factors which affect IFRS performance measures. These APMs are not a substitute for or superior to

IFRS measures. The Group’s APMs are defined, explained and reconciled to the nearest statutory measure within the

Chief Financial Officer’s Review.

Exceptional and non-trading items

To assist in understanding its underlying performance, the Group has defined the following items of pre-tax income

and expense as exceptional or non-trading as they either reflect items which are exceptional in nature or size or are

associated with the amortisation of acquired intangibles. Items treated as non-trading or exceptional include:

• profits or losses on disposal of assets or businesses, which are considered to be non-trading in nature as these do

not reflect the underlying performance of the Group. These transactions tend to be material in value, and the timing

can be uncertain. The impact on the financial statements can be significant and can distort certain key performance

indicators, such as basic EPS;

• corporate transaction and restructuring costs are considered to be exceptional in nature as these can be material

and are not a reflection of the underlying performance of the Group. The timing of these costs can vary and

amounts can differ significantly year on year, which can have a distortive impact on the statutory measures of

performance;

• amortisation of acquired intangibles is considered to be non-trading as this is a material number and does not

reflect the underlying performance of the Group, and users of the accounts expect to be able to assess the

profitability and growth of the Group excluding this figure. Additionally this is a significant non-cash cost;

• changes in the fair value of contingent consideration – these movements do not reflect underlying trade and the

timing of these items can be significantly different from the date of the original transaction to which they relate.

They do not reflect the underlying performance of the Group as a whole;

• expenses deemed as acquisition-related remuneration under IFRS 3 are considered to be exceptional in nature.

Without the link to continuing employment, these costs would have been treated as consideration and are material;

• share-based payments, which are considered a non-trading cost as they are a significant non-cash cost which are

excluded from the results for the purposes of measuring performance for PSP awards and also dividend amounts.

Additionally, the large non-cash-related credits go directly to equity and so have a limited impact on the reserves of

the Group; and

• the related tax effect of these items.

122

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

1 Accounting policies continued

Exceptional and non-trading items continued

Any other non-recurring items are considered individually for classification as non-trading or exceptional by virtue of

their nature or size.

The separate disclosure of these items allows a clearer understanding of the trading performance on a consistent and

comparable basis, together with an understanding of the effect of non-recurring or large individual transactions upon

the overall profitability of the Group.

The non-trading items have been included within the appropriate classifications in the consolidated income statement.

Further details are given in note 5.

Leases and payments

Identifying leases

The Group accounts for a contract, or a portion of a contract, as a lease when it conveys the right to use an asset for

a period of time in exchange for consideration. Leases are those contracts that satisfy the following criteria:

(a) there is an identified asset;

(b) the Group obtains substantially all the economic benefits from use of the asset; and

The Group considers whether the supplier has substantive substitution rights. If the supplier does have those rights,

the contract is not identified as giving rise to a lease.

In determining whether the Group obtains substantially all the economic benefits from use of the asset, the Group

considers only the economic benefits that arise from use of the asset, not those incidental to legal ownership or other

potential benefits.

In determining whether the Group has the right to direct use of the asset, the Group considers whether it directs

how and for what purpose the asset is used throughout the period of use. If there are no significant decisions to be

made because they are predetermined due to the nature of the asset, the Group considers whether it was involved in

the design of the asset in a way that predetermines how and for what purpose the asset will be used throughout the

period of use. If the contract or portion of a contract does not satisfy these criteria, the Group applies other applicable

IFRSs rather than IFRS 16.

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

• leases of low-value assets; and

• leases with a duration of 12 months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term,

with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is

not readily determinable, in which case the lessee company’s incremental borrowing rate on commencement of the

lease is used. Other variable lease payments are expensed in the period to which they relate.

Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received,

and increased for the amount of any provision recognised where the Group is contractually required to dismantle,

remove or restore the leased asset (typically leasehold dilapidations – see note 23).

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the

balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line

basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to

be shorter than the lease term. When the Group revises its estimate of the term of any lease (because, for example, it

re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount

of the lease liability to reflect the payments to make over the revised term, which are discounted at the same discount

rate that applied on lease commencement. The carrying value of lease liabilities is also revised when the variable

element of future lease payments dependent on a rate or index is revised, using the original discount rate. In both

cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying

amount being amortised over the remaining (revised) lease term.

Financial statements

123

XPS Pensions Group plc Annual Report and Accounts 2025

1 Accounting policies continued

Leases and payments continued

Identifying leases continued

When the Group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature

of the modification:

• if the renegotiation results in one or more additional assets being leased for an amount commensurate with the

standalone price for the additional rights-of-use obtained, the modification is accounted for as a separate lease in

accordance with the above policy;

• in all other cases where the renegotiated lease increases the scope of the lease (whether that is an extension to the

lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount rate

applicable on the modification date, with the right-of-use asset being adjusted by the same amount; and

• if the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease liability

and right-of-use asset are reduced by the same proportion to reflect the partial or full termination of the lease with

any difference recognised in profit or loss. The lease liability is then further adjusted to ensure its carrying amount

reflects the amount of the renegotiated payments over the renegotiated term, with the modified lease payments

discounted at the rate applicable on the modification date. The right-of-use asset is adjusted by the same amount.

For contracts that both convey a right to the Group to use an identified asset and require services to be provided to

the Group by the lessor, the Group has elected to account for the entire contract as a lease, i.e. it does not allocate any

amount of the contractual payments to, and account separately for, any services provided by the supplier as part of

the contract.

When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a

lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect

the payments to make over the revised term, which are discounted at the same discount rate that applied on lease

commencement.

Where the lease liability changes due to a change in the lease term (for example, due to utilisation of an extension

option) a new discount rate is used. This rate is determined as the interest rate implicit in the lease for the remainder

of the lease term, if that rate can be readily determined, or the Group’s incremental borrowing rate at the date of

reassessment if the interest rate implicit in the lease cannot be readily determined. The same rate is used for changes

in index rates.

Share-based payment costs – Performance Share Plan and Senior Equity Plan

Share-based payment costs as referred to throughout these financial statements are a long-term employee benefit.

The Group operates equity-settled, share-based compensation plans, under which the entity receives services from

the Executive Directors and certain senior employees in consideration for equity instruments of the Group. The fair

value of the services received in exchange for the grant of the awards is recognised as an expense. The total amount

to be expensed is determined by reference to the fair value of the awards granted:

• including any market performance conditions (for example, an entity’s share price); and

• excluding the impact of any service and non-market performance vesting conditions (for example, profitability and

remaining a Director for a specified period of time).

The Senior Equity Plans (SEPs) do not have any market performance conditions or non-market performance vesting

conditions, they only have service vesting conditions. The fair value for SEPs is the share price on the date of grant.

The total amount expensed to the Group is recognised over the vesting period of the award. Where a share award is

cancelled, the share-based payment charge is accelerated at that point in time and all remaining unvested charge is

immediately expensed to the Group.

Where a share award includes dividend equivalents, these are included within the IFRS 2 charge described above.

The Group may settle these via cash or shares.

See the Employee Benefit Trust (EBT) policy above for information on the Employee Benefit Trust element of

share-based payment costs.

124

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

1 Accounting policies continued

Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in profit and loss in the

statement of comprehensive income except to the extent that it relates to items recognised in equity, in which case it

is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively

enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are

not provided for: the initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither

accounting nor taxable profit other than in a business combination, and differences relating to investments in

subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax

provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities,

using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available

against which the asset can be utilised.

Changes in accounting policies – new standards, interpretations, and amendments effective from 1 April 2024

New and amended standards and interpretations issued by the IASB that apply for the first time in these annual

financial statements do not impact the Group as they are either not relevant to the Group’s activities or require

accounting which is consistent with the Group’s current accounting policies. These include:

• liability in a sale and leaseback (Amendments to IFRS 16 Leases);

• classification of liabilities as current or non-current (Amendments to IAS 1 Presentation of financial statements);

• non-current liabilities with covenants (Amendments to IAS 1 Presentation of financial statements); and

• supplier finance arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:

Disclosures).

New standards and interpretations not yet adopted

A number of new standards, amendments to standards, and interpretations are not effective for 2025, and therefore

have not been applied in preparing XPS Group’s financial statements. They are not expected to have a material impact

on the Group’s consolidated financial statements. These include the following amendments effective for the year

beginning 1 April 2025:

• Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates).

The following amendments are effective for the annual reporting period beginning 1 April 2026:

• Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial

Instruments and IFRS 7 Financial Instruments: Disclosures); and

• Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7).

The following standards and amendments are effective for the annual reporting period beginning 1 April 2027:

• IFRS 18 Presentation and Disclosure in Financial Statements; and

• IFRS 19 Subsidiaries without Public Accountability: Disclosures.

The Group is currently assessing the impact of these new accounting standards and amendments.

IFRS 18 Presentation and Disclosure in Financial Statements, which was issued by the IASB in April 2024, supersedes

IAS 1 and will result in major consequential amendments to IFRS Accounting Standards including IAS 8 Basis of

Preparation of Financial Statements (renamed from Accounting Policies, Changes in Accounting Estimates and

Errors). Even though IFRS 18 will not have any effect on the recognition and measurement of items in the consolidated

financial statements, it is expected to have a significant effect on the presentation and disclosure of certain items.

These changes include categorisation and sub-totals in the statement of profit or loss, aggregation/disaggregation

and labelling of information, and disclosure of management-defined performance measures.

Critical accounting estimates and judgements

The Group makes certain estimates and assumptions within the course of business. Estimates and judgements are

continually evaluated based on historical experience and other factors, including expectations of future events that

are believed to be reasonable under the circumstances. The estimates and underlying assumptions are reviewed

on an ongoing basis. In the future, actual experience may differ from these estimates and assumptions. Significant

judgements are separately identified where applicable. The Directors have reviewed the accounting estimates and

judgements made, and have determined that there is one critical estimate relating to business combinations, and

one critical judgement relating to the valuation of contract assets – accrued income within the unbilled element of

pensions, investment and administration services.

Financial statements

125

XPS Pensions Group plc Annual Report and Accounts 2025

1 Accounting policies continued

Critical accounting estimates and judgements continued

Business combinations (note 6)

Management determines and allocates the purchase price of an acquired business to the assets acquired and liabilities

assumed as of the business combination date. The purchase price allocation process requires the use of significant

estimates and assumptions, including the estimated fair value of the acquired intangible assets.

Whilst management uses its best estimates and assumptions as part of the purchase price allocation process to

accurately value assets acquired and liabilities assumed at the date of acquisition, the estimates and assumptions are

inherently uncertain and subjective. Critical estimates in valuing certain of the intangible assets include but are not

limited to:

• growth rate assumptions applied to the cash flow forecasts in the customer relationships; and

• discount rates applied to arrive at the value of customer relationship assets.

Contract assets – accrued income (note 19)

Management will make a judgement as to whether a project is in an accrued or deferred position at the end of each

month/reporting period. This judgement is based on the time recorded against each client project versus the amount

billed, as well as other factors including expected recoverability levels based on past experience, the nature of the

work undertaken, and to what extent the performance obligations have been met, all in line with IFRS 15.

2 Financial risk management

The Group’s operations expose it to a variety of financial risks including credit risk, liquidity risk, market risk and the

effects of changes in interest rates on debt. The Group has in place a risk management programme that seeks to limit

the adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related

finance costs.

The Group’s principal financial instruments comprise sterling cash, lease liabilities and bank loans together with trade

receivables and trade payables that arise directly from its operations.

Risk management policies are established for the XPS Group of companies and the Group Audit & Risk Committee

oversees how management monitors compliance with these policies and procedures and reviews the adequacy of the

Risk Management Framework in relation to the risks faced by the Group. Further details relating to the current year

position are provided in note 29.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty, including brokers, to a financial

instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

Due to the nature of the business, the majority of the trade receivables are with trustees of pension schemes and large

institutions and losses have occurred infrequently over previous years.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s

approach to managing liquidity is to ensure, as far as possible, that the Group will have sufficient liquidity to meet

its liabilities when due, within the going concern period, under both the normal and worst case scenarios modelled.

Cash flow forecasts are updated daily and reviewed regularly by management. Trade debtor balances are managed to

ensure debtors are kept to terms as much as is possible, and management ensures sufficient cash is available to meet

expected cash outflows. The Group has significant headroom within its current revolving credit facility.

Market risk

Market risk is the risk that changes in market prices will affect the Group’s income or the value of its financial

instruments. Market risk comprises three elements – interest rate risks, foreign exchange risks, and pricing risks.

Interest rate risks are discussed in the cash flow interest rate risk below. The Group is exposed to movements in

interest rate in its net finance costs and also in a small element of its operating revenue. Loans and borrowings are

based on a rate linked to SONIA. The Group earns income in relation to client deposits as well as interest income on

its own deposits.

The Group’s financial instruments are currently in sterling; hence foreign exchange movements do not have a material

effect on the Group’s performance.

Pricing risks are considered to be low – an element of resetting fees regularly includes an inflation measure, but as this

is contractual it does not present a significant risk to the Group.

The Group does not hold its own position in trading securities, being involved only in advising clients on transactions

that they undertake.

The Group does not engage in holding speculative financial instruments or derivatives. Further quantitative disclosures

are included in note 29.

126

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

2 Financial risk management continued

Cash flow interest rate risk

The Group is exposed to cash flow interest rate risk in two main respects: firstly, corporate and client bank deposits,

which earn interest at a variable rate, although not at a material level; and secondly, interest expense arising on the

revolving credit facility at a margin over SONIA.

3 Capital risk management

The Group is focused on delivering value for its shareholders whilst ensuring that it is able to continue effectively as a

going concern. Value adding opportunities to grow the business are continually assessed, although strict and careful

criteria are applied.

The policy for managing capital is to increase shareholder value by maximising profits and cash. Budgets and

forecasts are set in the short and medium term that the Group feels are achievable. The processes for managing

capital are regular reviews of financial data to ensure that the Group is tracking the targets set and to reforecast as

necessary based on the most up-to-date information. This then contributes to the Group’s forecast which ensures

future covenant test points are met. The Group continues to meet these test points and they have been achieved over

the last year.

Due to the nature of some of the services provided, two subsidiaries within the Group were regulated by the Financial

Conduct Authority (FCA) during the year. They are required to hold a minimum level of capital and this is monitored

on a monthly basis. Formal compliance returns are submitted to the FCA in line with their reporting requirements.

The Group was compliant with its capital requirements throughout the year.

4 Auditor’s remuneration

During the period the following services were obtained from the Group’s auditor at a cost detailed below:

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Audit services
Fees payable in respect of the Parent Company and consolidated accounts	412	394
Fees payable in respect of the subsidiary accounts	174	166
	586	560
Audit-related services	42	42
Other assurance services	13	12
Other non-audit services	—	10
Total	641	624

Financial statements

127

XPS Pensions Group plc Annual Report and Accounts 2025

5 Non-trading and exceptional items

		Year ended 31 March 2025			Year ended 31 March 2024
		Total	Tax on	Adjusting	Total	Tax on	Adjusting
		before	adjusting	items after	before	adjusting	items after
		tax	items 8	taxation	tax	items 8	taxation
	Note	£’000	£’000	£’000	£’000	£’000	£’000
Corporate transaction costs 1		(1,810)	—	(1,810)	—	—	—
Acquisition-related remuneration 2		(2,080)	—	(2,080)	(1,718)	(212)	(1,930)
Gain on purchase 3		988	—	988	—	—	—
Exceptional items		(2,902)	—	(2,902)	(1,718)	(212)	(1,930)
Share-based payment costs 4	12	(8,764)	2,184	(6,580)	(6,376)	1,623	(4,753)
Amortisation of acquired intangibles 5	17	(7,049)	1,762	(5,287)	(7,034)	1,758	(5,276)
Gain on disposal 6		—	—	—	32,538	—	32,538
Contingent consideration write back 7		—	—	—	92	—	92
Non-trading items		(15,813)	3,946	(11,867)	19,220	3,381	22,601
Total		(18,715)	3,946	(14,769)	17, 502	3,169	20,671

1 The Group incurred total corporate transaction costs of £1,810,000 (2024: £nil) in the year, which relate to deal fees associated with the

Polaris acquisition. These amounts are material in size and one-off in nature. As such, in line with the Group’s accounting policies, they have

been classified as exceptional items. The overall transaction costs are material and do not reflect the underlying performance of the Group.

Users of the accounts expect these costs to be disclosed separately, to aid visibility of underlying performance. The timing of these costs

can also vary and are normally not aligned with the related benefits of the transaction.

2 Acquisition-related remuneration of £919,000 (2024: £nil) relates to the acquisition of Polaris, and contingent amounts owed to the vendor

as acquisition-related remuneration in respect of the acquisition of Penfida Limited totalling £1,161,000 (2024: £1,718,000). For both the

Polaris and the Penfida acquisitions, as continued employment is one condition of the share purchase agreements, then in accordance with

IFRS 3, the entire additional amount must be treated as a post-transaction employment cost accruing over the deferment period (to March

2028 for Polaris, and to September 2024 for Penfida). These additional amounts are material in size and one-off in nature. As such, in line

with the Group’s accounting policies, and the treatment adopted in prior periods, they have been classified as exceptional items. The entire

Penfida contingent acquisition-related remuneration of £3,500,000 was paid in October 2024. Users of the accounts expect these costs

to be disclosed separately, to aid visibility of underlying performance. The timing of these costs can also vary and are normally not aligned

with the related benefits of the transaction.

3 A gain on purchase of Polaris Actuaries and Consultants Ltd was recognised in the year. Due to the criteria set out in IFRS 3 that determine

consideration that includes a continuing employment clause to be treated as post-acquisition remuneration, only £13.8 million of the total

purchase price can be recognised as such. After a purchase price allocation exercise allocated amounts to intangible assets and related

deferred tax, the Group is left with a gain on purchase, which is presented as other operating income. This item is exceptional by nature, as

management does not consider this gain to reflect the performance of the Group in the year, and so it is presented as an exceptional item.

4 Share-based payment expenses and related National Insurance are included in non-trading and exceptional costs as they are a significant

non-cash cost which is excluded from the results for the purposes of measuring performance for PSP awards and dividend amounts.

Additionally, the largely non-cash-related credits go directly to equity and so have a limited impact on the reserves of the Group. They are

therefore shown as a non-trading item to give clarity to users of the accounts on the profit figures that dividends and PSP performance are

based on.

5 During the year the Group incurred £7,049,000 of amortisation charges in relation to acquired intangible assets (customer relationships and

brand) (2024: £7,034,000). As this figure is material, and is linked to non-trading activity, management excludes this cost when reviewing

and reporting on the underlying performance of the Group. Similarly, users of the accounts expect to be able to assess the profitability and

growth of the Group excluding this figure.

6 The gain on disposal in the prior year relates to the NPT business disposal. This is a material figure which does not reflect the underlying

performance of the Group and is non-recurring.

7 The contingent consideration write back in the prior year relates to the revaluation of the contingent consideration for the MJF acquisition.

This income is deemed to be exceptional in nature as it is linked to a payment set out in the business transfer agreement for the Michael

J Field acquisition in February 2022. This income is not related to underlying business performance and so is disclosed as non-trading

income. Management does not include this figure in income when reviewing overall business performance. There are no further payments

to be made in respect of this acquisition.

8 The tax credit on exceptional and non-trading items of £3,946,000 (2024: £3,169,000) represents 21% (2024: 18%) of the exceptional and

non-trading items incurred of £18,715,000 (2024: £17,502,000). This is different to the expected tax credit of 25% (2024: charge of 25%),

as various adjustments are made to tax including for deferred tax, and the exclusion of amounts not allowable for tax.

128

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

6 Business combinations during the period

On 28 February 2025, the Group acquired 100% of the share capital of Polaris Actuaries and Consultants Ltd

(“Polaris”) from the shareholders of Polaris Actuaries and Consultants Limited for £23.0 million cash upon completion

(of which £9.2 million is subject to certain rights of clawback) and a further payment of up to £35.0 million which

is payable after three years, contingent on achieving certain stretching business performance criteria. Due to the

requirements of IFRS 3 which result in all consideration with an employment service condition being treated as a

post-acquisition remuneration expense, the £9.2 million cash paid on completion, as well as the earn out accrual,

will be treated as post-acquisition remuneration and will be an expense to the Group over the three-year period

to 28 February 2028. This expense will be treated as an exceptional cost, as it meets the Group’s definition of an

exceptional item (see note 5).

Polaris was established in 2015 with the strategy to provide insurance clients with high-quality actuarial and technical

services, supporting them on complex financial, risk and regulatory projects. Today, Polaris is at the forefront of its

field, providing a range of services from large-scale, multi-disciplined transformation programmes to specialist project

support for some of the UK’s largest insurance companies.

Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are

as follows:

	Book value	Adjustment	Fair value
	£’000	£’000	£’000
Trade and other receivables	2,223	—	2,223
Cash	32	—	32
Trade and other payables	(957)	—	(957)
Corporation tax payable	(351)	—	(351)
Customer relationships	—	18,500	18,500
Deferred tax	(1)	(4,625)	(4,626)
Total net assets	946	13,875	14,821

The fair value and the gross value of acquired receivables are the same. The receivables have been reviewed and it is

expected that all contractual cash flows will be collected.

Fair value of consideration paid

	£’000
Cash (excluding amount with rights of clawback which are not treated as consideration under IFRS 3)	13,806
Accrued additional consideration	27
Total consideration	13,833
Gain on acquisition	(988)

Due to the restrictions under IFRS 3 on recognising consideration with a continuing employment clause as

consideration, a gain on acquisition has arisen, instead of having an element of goodwill in the balance sheet. This

gain on acquisition has been presented as other operating income and is shown as an exceptional item, as it does not

represent the performance of the Group and is one-off in nature.

Since the acquisition date, Polaris has contributed £1.2 million to Group revenues and £0.4 million to Group profit

before tax, before taking into account the post-acquisition remuneration referred to above. Including this figure,

Polaris has contributed a loss of £0.6 million since the acquisition date.

If the acquisition had occurred on 1 April 2024, Group revenue would have been £247.4 million and Group profit

before tax would have been £45.9 million, excluding the impact of the post-acquisition remuneration disclosed above.

Including this, and assuming the transaction had taken place on 1 April, Group profit before tax would have been

£45.0 million.

Acquisition expenses

Costs relating to this acquisition (excluding the post-acquisition remuneration) totalled £1,810,000 and are included

within exceptional costs as corporate transaction costs.

Financial statements

129

XPS Pensions Group plc Annual Report and Accounts 2025

7 Operating segments

In accordance with IFRS 8 Operating Segments, an operating segment is defined as a business activity whose

operating results are reviewed by the chief operating decision-maker (CODM) and for which discrete information is

available. The Group’s CODM is the Board of Directors.

The Group has one operating segment, and one reporting segment due to the nature of services provided across

the whole business being the same: consulting and administration services to UK pension schemes and insurance

companies. The Group’s revenues, costs, assets, liabilities and cash flows are therefore totally attributable to this

reporting segment. The table below shows the disaggregation of the Group’s revenue, by product line.

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Actuarial & Consulting	106,108	93,411
Administration	93,654	71,929
Investment Consulting	19,443	20,316
SIP 1	12,580	11,017
National Pension Trust (NPT) 2	—	2,759
Total	231,785	199,432

1 Self Invested Pensions (SIP) business, incorporating both SIPP and SSAS products.

2 NPT business was sold on 20 November 2023 and so revenue in the prior year is up to that date.

8 Operating expenses

Included in the operating profit for the year are the following:

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Expenses by nature
Staff costs (note 9)	138,367	120,386
Depreciation and amortisation	13,828	12,857
Short term and low value lease costs	240	308
Premises costs (excluding rent accounted for under IFRS 16 Leases)	3,398	3,233
Professional fees	7,603	7,652
IT costs	14,964	13,167
Exceptional items excluding acquisition-related remuneration (note 5)	822	—
Other general business costs	8,381	7,485
Total	187,603	165,088

9 Staff numbers and costs

The average number of people employed by the Group (including Directors) during the year, analysed by category,

was as follows:

	Year ended	Year ended
	31 March	31 March
	2025	2024
	Number of	Number of
	employees	employees
Operational	1,711	1,557
Administration	148	137
Sales and marketing	28	27
Total	1 , 8 87	1,721

130

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

9 Staff numbers and costs continued

The aggregate payroll costs of these persons were as follows:

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Wages and salaries	108,865	95,425
Social security contributions	11,555	10,175
Defined contribution pension cost	5,284	4,650
Other long-term employee benefits	1,819	2,042
Acquisition-related remuneration (note 5)	2,080	1,718
Share-based payment costs (note 12)	8,764	6,376
Total	138,367	120,386

10 Employee benefits

Defined contribution plan

The Company operates a defined contribution pension plan. Outstanding contributions at the year end were £nil

(2024: £nil).

11 Directors’ emoluments

The Directors were remunerated for their services by the Group and their emoluments are disclosed below.

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Aggregate emoluments excluding gain on exercise of share options	3,155	2,854
Gain on exercise of share options	3,724	2,024
Company contributions to defined contribution pension scheme	30	30
Total	6,909	4,908

Share-based payment expense for Directors was £1,340,000 (2024: £1,233,000).

	Year ended	Year ended
	31 March	31 March
	2025	2024
	Number of	Number of
	Directors	Directors
At 31 March 2025, retirement benefits are accruing to the following number of Directors under:
Defined contribution pension schemes	3	3

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
The emoluments of the highest-paid Director, including benefits and share-based payment charge	1,458	1,379

12 Share-based payment costs

The Group operates a number of equity-settled share-based remuneration schemes for employees: Performance Share

Plans (PSP) for Executive Directors and other key senior personnel, and Senior Equity Plans (SEP). All employees are

also eligible to participate in the Save as You Earn (SAYE) scheme, the only vesting condition being that the individual

remains an employee of the Group over the savings period.

The Executive PSP award expense relates to annual awards over shares that vest subject to certain, stretching

performance conditions, measured over a three-year period. The maximum “normal” grant level is 150% of salary,

capped at a maximum of 200% in exceptional circumstances. Malus and clawback provisions apply. The fair value of

awards granted during the year was determined using certain assumptions around vesting. More information about the

Executive PSP can be found in the Remuneration Report section of this Annual Report.

The Staff PSP award expense relates to annual awards over shares that vest subject to certain performance conditions,

measured over a three-year period. The fair value of awards granted during the year was determined using certain

assumptions around vesting.

Financial statements

131

XPS Pensions Group plc Annual Report and Accounts 2025

12 Share-based payment costs continued

The only vesting criterion for the SEP is a service criterion. The fair value of awards under this scheme was determined

using the share price on the date of grant.

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
PSP awards, SEP awards and SAYE scheme	5,946	4,910
Social security cost on PSP awards and SEP awards (note 23)	2,818	1,466
Total share-based payments	8,764	6,376

The fair value of Executive PSP options granted during the period was calculated using different methods for different

elements – the Black-Scholes method for the EPS and ESG elements, the Stochastic method for the TSR element, and

the Chaffe method for the holding period. There is no change in the valuation methodology since the prior year. In the

prior year there was also an additional award which is solely based on an EPS target. The fair value for this additional

award was calculated using the Black-Scholes method. The inputs to the model were as follows:

			Year ended 31 March 2025				Year ended 31 March 2024
			20%				20%		Additional
	70%	10%	relative			10%	relative		award:
	earnings	environmental,	total		70%	environmental,	total		100%
	per	social and	shareholder	Two -year	earnings	social and	shareholder	Two-year	earning
	share	governance	return	holding	per share	governance	return	holding	per share
	(EPS)	(ESG)	(TSR)	period	(EPS)	(ESG)	(TSR)	period	(EPS)
Weighted average exercise
price of options issued
during the period (pence)	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.05
Expected volatility (%)	n/a	n/a	33.92%	33.68%	n/a	n/a	36.44%	37.02%	n/a
Expected life beyond
vesting date (years)	3	3	3	2	3	3	3	2	3
Risk-free rate (%)	n/a	n/a	4.44%	4.26%	n/a	n/a	4.88%	4.64%	n/a
Dividend yield (%)	—	—	—	—	—	—	—	—	—

For the TSR element, the volatility is calculated over the period of time commensurate with the remainder of the

performance period immediately prior to the date of grant. For the holding period, this is calculated over the period

commensurate with the holding period immediately prior to the date of grant.

The risk-free rate is calculated using the rate of interest obtainable from government securities (i.e. gilts in the UK)

over a period commensurate with the expected term. For the holding period the risk-free rate is the rate obtained over

a term equal to the vesting period plus the holding period.

The fair value of Staff PSP options granted during the period was calculated using the Monte Carlo valuation method.

The inputs to the model were as follows:

	Year ended
	31 March
	2025
Weighted average exercise price of options issued during the period (pence)	0.05
Dividend yield (%)	—

No Staff PSP options were granted during the prior year.

The fair value of SAYE options granted during the year was calculated using the Black-Scholes valuation method.

The inputs to the model were as follows:

	Year ended
	31 March
	2025
Weighted average exercise price of options issued during the period (pence)	240.0
Expected volatility (%)	33.56%
Expected life beyond vesting date (years)	3.35
Risk-free rate (%)	4.22%
Dividend yield (%)	3.13%

The volatility assumption has been calculated over the period of time commensurate with the expected award term

immediately prior to the date of grant.

No SAYE options were granted during the prior year.

132

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

12 Share-based payment costs continued

As at 31 March 2025, in respect of the Group’s ordinary shares of 0.05p each, 2,453,641 Executive PSP options had

been granted and remained outstanding, at an exercise price of 0.05p per share, 377,099 Staff PSP options had been

granted and remained outstanding, at an exercise price of 0.05p per share, 6,042,551 Staff SEP options had been

granted and remained outstanding, at an exercise price of 0.05p per share, 8,108 SAYE options had been granted and

remained outstanding, at an exercise price of 111p per share, 2,185,830 SAYE options had been granted and remained

outstanding, at an exercise price of 104p per share, and 1,230,915 SAYE options had been granted and remained

outstanding, at an exercise price of 240p per share. The table below includes dividend equivalent shares on the PSP

and SEP option figures where applicable.

		2025		2024
		Weighted		Weighted
		average		average
		exercise		exercise
		price	2025	price	2024
		(pence)	Number	(pence)	Number
Executive PSP	Outstanding at 1 April	0.05	3,015,959	0.05	3,037,475
	Granted during the year	0.05	530,699	0.05	948,483
	Forfeited during the year	0.05	—	0.05	(327, 860)
	Exercised during the year	0.05	(940,463)	0.05	(620,424)
	Cancelled during the year	0.05	(42,142)	0.05	(21,715)
	Outstanding at 31 March	0.05	2,564,053	0.05	3,015,959
Staff PSP	Outstanding at 1 April	0.05	184,907	0.05	329,242
	Granted during the year	0.05	355,593	—	—
	Forfeited during the year	—	—	0.05	(3,869)
	Exercised during the year	0.05	(141,836)	0.05	(135,716)
	Cancelled during the year	0.05	(4,965)	0.05	(4,750)
	Outstanding at 31 March	0.05	393,699	0.05	184,907
Staff SEP	Outstanding at 1 April	0.05	6,858,417	0.05	6,306,014
	Granted during the year	0.05	1,282,634	0.05	2,590,302
	Forfeited during the year	0.05	(71,309)	0.05	(84,425)
	Exercised during the year	0.05	(1,681,626)	0.05	(1,887,415)
	Cancelled during the year	0.05	(74,156)	0.05	(66,059)
	Outstanding at 31 March	0.05	6,313,960	0.05	6,858,417
SAYE	Outstanding at 1 April	111.17	3,050,366	110.79	3,173,969
	Granted during the year	240.00	1,263,240	—	—
	Forfeited during the year	121.08	(73,058)	105.61	(50,382)
	Exercised during the year	110.86	(781,171)	87.47	(29,081)
	Lapsed during the year	111.00	(9,469)	—	—
	Cancelled during the year	230.61	(25,055)	106.01	(44 ,140)
	Outstanding at 31 March	157.67	3,424,853	111.17	3,050,366

The exercise price of options outstanding at 31 March 2025 ranged between £0.0005 (i.e. the nominal value of an

ordinary share) in the case of the PSPs and SEPs and £2.40 in the case of the SAYE scheme (2024: £0.0005 to £1.11).

Their weighted average contractual life was three years (2024: three years), and their weighted average exercise price

was £0.43 (2024: £0.25).

Across all schemes, of the total number of options outstanding at 31 March 2025, 210,009 (2024: 403,985) had vested

and were exercisable.

The weighted average fair value of each option granted during the year was £2.20 (2024: £1.74). The weighted

average exercise price for exercisable options was 4.33 pence per share (2024: 0.05 pence per share). The weighted

average share price at the date of exercise for share options exercised during the year was £3.08 (2024: £1.88).

Financial statements

133

XPS Pensions Group plc Annual Report and Accounts 2025

13 Finance income and expense

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Interest income on bank deposits	109	50
Finance income	109	50
Interest expense on bank loans	2,052	3,629
Other costs of borrowing	742	542
Interest on leases	634	323
Other finance expense	113	49
Finance expenses	3,541	4,543

14 Income tax expense

Recognised in the statement of comprehensive income

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Current tax expense
Current year	13,275	10,133
Adjustment in respect of prior year	(1,154)	(131)
Total current tax expense	12,121	10,002
Deferred tax credit
Origination and reversal of temporary differences	(2,234)	(2,231)
Adjustment in respect of prior year	520	543
Total income tax expense	10,407	8,314

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Profit for the year	30,343	54,167
Total tax expense	10,407	8,314
Profit before income tax	40,750	62,481
Tax using the UK corporation tax rate of 25% (2024: 25%)	10,188	15,620
Non-deductible expenses	1,189	510
Other operating income not taxable	(247)	(23)
Gain on disposal not taxable	—	(8,135)
Fixed asset permanent differences	(89)	(70)
Adjustment in respect of prior periods	(634)	412
Total tax expense	10,407	8,314

The standard rate of corporation tax in the UK was 25% (2024: 25%). The average effective tax rate was 26% (2024: 13%).

The average effective rate in the prior year is impacted by the non-taxable gain on sale of the NPT business. Excluding

this, the effective tax rate in the prior year was 28%. This is higher than the standard rate due to the impact of costs

not allowable for tax. Deferred tax assets and liabilities have been measured at the rate they are expected to unwind

at, using a rate substantively enacted at 31 March 2025, which is 25% (2024: 25%). Deferred tax not recognised relates

to £6.7 million (2024: £6.7 million) of finance expense losses in a prior year and their future recoverability is uncertain.

At 31 March 2025 the total unrecognised deferred tax asset in respect of these losses was approximately £1.7 million

(2024: £1.7 million).

£1,521,000 (2024: £521,000) of current year tax, and £2,366,000 (2024: £1,167,000) of deferred tax was recognised

directly in equity; this relates to employee share options accounted for under IFRS 2.

134

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

15 Property, plant and equipment

	Leasehold	Office	Fixtures
	improvements	equipment	and fittings	Total
	£’000	£’000	£’000	£’000
Cost
Balance at 1 April 2024	4,456	2,080	906	7,442
Additions	1,704	568	64	2,336
Disposals	(1,089)	(318)	(214)	(1,621)
Balance at 31 March 2025	5,071	2,330	756	8,157
Accumulated depreciation
Balance at 1 April 2024	2,141	846	479	3,466
Depreciation charge for the year	495	448	91	1,034
Disposals	(1,089)	(318)	(214)	(1,621)
Balance at 31 March 2025	1,547	976	356	2,879
Net book value
Balance at 1 April 2024	2,315	1,234	427	3,976
Balance at 31 March 2025	3,524	1,354	400	5,278

	Leasehold	Office	Fixtures
	improvements	equipment	and fittings	Total
	£’000	£’000	£’000	£’000
Cost
Balance at 1 April 2023	3,502	1,595	901	5,998
Additions	992	733	64	1,789
Disposals	(38)	(248)	(59)	(345)
Balance at 31 March 2024	4,456	2,080	906	7,442
Accumulated depreciation
Balance at 1 April 2023	1,755	739	425	2,919
Depreciation charge for the year	424	355	113	892
Disposals	(38)	(248)	(59)	(345)
Balance at 31 March 2024	2,141	846	479	3,466
Net book value
Balance at 1 April 2023	1,747	856	476	3,079
Balance at 31 March 2024	2,315	1,234	427	3,976

Financial statements

135

XPS Pensions Group plc Annual Report and Accounts 2025

16 Leases

Nature of leasing activities (in the capacity as lessee)

The Group leases a number of properties in the UK. In some instances the rent is reviewed and may be reset

periodically to market rental rates. In other cases the periodic rent is fixed over the lease term. The Group also leases

electric vehicles on behalf of employees, who reimburse the Company for the cost. Leases of electric vehicles comprise

only fixed payments over the lease terms. The percentages in the table below reflect the current proportions of lease

payments that are either fixed or variable. The sensitivity reflects the impact on the carrying amount of lease liabilities

and right-of-use assets if there was an uplift of 5% on the balance sheet date to lease payments that are variable.

	Lease	Fixed	Variable
	contracts	payments	payments	Sensitivity
31 March 2025	Number	%	%	£’000
Property leases with periodic uplifts to market rentals	8	—	70	± 408
Property leases with fixed payments	7	28	—	—
Leases of electric vehicles	25	2	—	—
	40	30	70	± 408

	Lease	Fixed	Variable
	contracts	payments	payments	Sensitivity
31 March 2024	Number	%	%	£’000
Property leases with periodic uplifts to market rentals	8	—	85	± 337
Property leases with fixed payments	7	11	—	—
Leases of electric vehicles	19	4	—	—
	34	15	85	± 337

The Group sometimes negotiates break clauses in its property leases. On a case-by-case basis, the Group will consider

whether the absence of a break clause would expose the Group to excessive risk. Typically factors considered in

deciding to negotiate a break clause include:

• the length of the lease term; and

• whether the location represents a new area of operations for the Group.

At 31 March 2025, the carrying amounts of lease liabilities are not reduced by the amount of payments that would be

avoided from exercising break clauses because on both dates it was considered reasonably certain that the Group

would not exercise its right to break the lease. Total undiscounted lease payments of £8,162,566 (2024: £6,747,875)

are potentially avoidable were the Group to exercise break clauses at the earliest opportunity.

136

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

16 Leases continued

Nature of leasing activities (in the capacity as lessee) continued

	Land and	Electric
	buildings	vehicles	Total
Right-of-use assets	£’000	£’000	£’000
At 1 April 2024	8,538	354	8,892
Additions	7,608	188	7,796
Depreciation	(2,810)	(152)	(2,962)
Effect of modification to lease terms	148	2	150
Disposal of lease	—	(41)	(41)
At 31 March 2025	13,484	351	13,835

	Land and	Electric	Office
	buildings	vehicles	equipment	Total
Right-of-use assets	£’000	£’000	£’000	£’000
At 1 April 2023	9,640	—	44	9,684
Additions	2,576	476	—	3,052
Depreciation	(2,740)	(103)	(44)	(2,887)
Effect of modification to lease terms	(311)	—	—	(311)
Disposal of lease	(627)	(19)	—	(646)
At 31 March 2024	8,538	354	—	8,892

Lease liabilities

	Land and	Electric
	buildings	vehicles	Total
	£’000	£’000	£’000
At 1 April 2024	8,806	361	9,167
Additions	7,312	188	7, 500
Interest expense	614	20	634
Effect of modification to lease term	6	2	8
Disposal	—	(41)	(41)
Lease payments	(2,147)	(168)	(2,315)
At 31 March 2025	14,591	362	14,953

Lease liabilities

	Land and		Office
	buildings		equipment	Total
	£’000	Cars	£’000	£’000
At 1 April 2023	9,880	—	55	9,935
Additions	2,359	476	—	2,835
Interest expense	304	18	1	323
Effect of modification to lease term	(311)	—	—	(311)
Disposal	(511)	(19)	—	(530)
Lease payments	(2,915)	(114)	(56)	(3,085)
At 31 March 2024	8,806	361	—	9,167

	31 March	31 March
	2025	2024
	£’000	£’000
Short-term lease expense	225	285
Low-value lease expense	15	23
Aggregate expense for short-term leases	240	308

Financial statements

137

XPS Pensions Group plc Annual Report and Accounts 2025

16 Leases continued

Nature of leasing activities (in the capacity as lessee) continued

The maturity of the lease liabilities are as follows:

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Up to 3 months	841	471
Between 3 and 12 months	2,074	1,401
Between 1 and 2 years	2,642	1,640
Between 2 and 5 years	4,902	3,869
More than 5 years	4,494	1,786
	14,953	9,167

The cash flows above are discounted and reconcile back to the lease liability. For the undiscounted cash flows, please

see note 29.

17 Intangible assets

		Customer
	Goodwill	relationships	Brands	Software	Total
Group	£’000	£’000	£’000	£’000	£’000
Cost
Balance at 1 April 2024	125,296	130,484	295	18,619	274,694
Acquired through business combinations	—	18,500	—	—	18,500
Additions	—	—	—	6,260	6,260
Disposals	—	—	—	(1,722)	(1,722)
Balance at 31 March 2025	125,296	148,984	295	23,157	297,732
Accumulated amortisation
Balance at 1 April 2024	—	62,092	295	4,237	66,624
Amortisation for the year	—	7,049	—	2,783	9,832
Disposals	—	—	—	(1,722)	(1,722)
Balance at 31 March 2025	—	69,141	295	5,298	74,734
Net book value
Balance at 1 April 2024	125,296	68,392	—	14,382	208,070
Balance at 31 March 2025	125,296	79,843	—	17, 859	222,998

		Customer
	Goodwill	relationships	Brands	Software	Total
Group	£’000	£’000	£’000	£’000	£’000
Cost
Balance at 1 April 2023	125,367	130,484	295	14,589	270,735
Adjustment to prior year business combinations	(71)	—	—	—	(71)
Additions	—	—	—	5,450	5,450
Disposals	—	—	—	(1,420)	(1,420)
Balance at 31 March 2024	125,296	130,484	295	18,619	274,694
Accumulated amortisation
Balance at 1 April 2023	—	55,254	99	3,279	58,632
Amortisation for the year	—	6,838	196	2,027	9,061
Disposals	—	—	—	(1,069)	(1,069)
Balance at 31 March 2024	—	62,092	295	4,237	66,624
Net book value
Balance at 1 April 2023	125,367	75,230	196	11,310	212,103
Balance at 31 March 2024	125,296	68,392	—	14,382	208,070

138

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

17 Intangible assets continued

Material customer relationship assets are broken down as follows:

		31 March 2025		31 March 2024
	Remaining	Net book	Remaining	Net book
	UEL	value	UEL	value
	years	£’000	years	£’000
Acquisitions prior to January 2018 (CGU 1)	8	13,261	9	14,937
Acquisitions prior to January 2018 (CGU 2)	8	969	9	1,091
Punter Southall actuarial (CGU 1)	13	35,338	14	38,104
Punter Southall administrative (CGU 1)	3	2,721	4	3,699
Kier (CGU 1)	4	1,113	5	1,423
XPS Pensions RL Limited (CGU 1)	5	1,269	6	1,574
XPS Pensions Trigon Limited (CGU 1)	5	987	6	1,202
Michael J Field (CGU 2)	7	1,342	8	1,538
Penfida Limited (CGU 1)	18	4,563	19	4,824
Polaris Actuaries and Consultants Ltd (CGU 1)	7	18,280	—	—

Software assets held by the Group comprise internally generated or enhanced software for use in providing

services to customers. The largest group of software assets relates to the Administration business, specifically the

development of an in-house administration system. Software disposals in the year related to software which has

reached the end of its useful economic life and is no longer in use.

Impairment test

Goodwill represents the excess of the consideration over the fair value of the net assets acquired on the purchase of

the subsidiary companies listed in note 33, as well as goodwill which has arisen on the purchase of trade and assets

by the Group. In accordance with IFRS, this balance is not amortised and is subject to annual impairment reviews.

During the year, management undertook a review of the cash-generating units (CGUs) within the Group, and

concluded that a change was required. In prior years, four CGUs were identified:

• CGU 1 – Former Xafinity businesses, Royal London, Trigon, and Michael J Field acquisitions;

• CGU 2 – PS Actuarial;

• CGU 3 – PS Admin; and

• CGU 4 – Penfida.

IAS 36 requires the Group to divide into as many CGUs as possible, and the lowest aggregation of assets that generate

largely independent cash inflows must be identified. IAS 36 allows for an element of flexibility over what constitutes a

CGU, as this area involves judgement. Management has critically reviewed the current CGU structure and determined

that this is no longer appropriate – instead there are two CGUs – one for Advisory and Administration, which covers

the majority of the Group’s activities, and one for the SIP business. The SIP business has its own discrete customer

set and independent cash inflows. For the other revenue streams, clients are billed in line with their contract, through

one legal entity; however, the revenue is recognised in the entity fulfilling the performance obligation, and so the cash

inflows cannot really be split any further.

As a part of this exercise, management has considered whether smaller groups of assets exist, for example along the

lines of the revenue disaggregation, and has concluded that they do not. The standard does allow a change to the

CGUs as long as it is justified. Management has performed an impairment test on the basis of the new CGUs, as well

as under the previous CGU basis. The testing shows that there were no indications of impairment under either the new

or the old basis.

The carrying value of goodwill was therefore assessed based on two new CGUs:

• CGU 1 – Advisory and Administration; and

• CGU 2 – SIP.

Financial statements

139

XPS Pensions Group plc Annual Report and Accounts 2025

17 Intangible assets continued

Impairment test continued

The CGUs at each year end were assessed on the basis of value in use using the following assumptions, which reflect

past experience of the Group:

		2025			2024
	CGU 1	CGU 2	CGU 1	CGU 2	CGU 3	CGU 4
Discount rate pre-tax	12.0%	12.0%	12.6%	12.6%	12.6%	12.6%
Terminal rate after period 8	2.0%	2.0%	2.0%	2.0%	2.0%	2.0%
Period on which detailed forecasts are based	3 years	3 years	3 years	3 years	3 years	3 years
Growth rate during detailed forecast period (average)	12.1%	20.2%	10.4%	8.5%	30.2%	20.8%
Growth rate applied beyond approved forecast period
to year 8	5%	5%	5%	5%	5%	5%

The discount rate comprises two elements, the cost of debt and the cost of equity, to derive a blended cost of capital

demanded by all providers of capital. The cost of equity is based on the following components:

• beta: calculated to estimate how volatile the Group’s equity is compared to a peer group;

• risk-free rate: using a ten-year UK government bond yield as a proxy for the risk-free rate; and

• equity risk premium: the implied rate as at 31 March 2025 is used to assess the price of risk in equity markets.

The cost of debt represents the cost of capital for the Group’s drawn revolving credit facility and is based on average

borrowings during the year.

The cash flows used for the value in use calculations incorporate the impact of inflation, and future assumptions

regarding inflation which are based on the latest outlook from the UK government.

The growth rate beyond the forecast period is based on a blend of average growth rates experienced by the Group

and management’s assessment of industry and macroeconomic outlooks. Such forecast rates have been accurate in

the past, so the Directors believe they will be sufficiently representative of actual results.

The growth rate is applied up to eight years; this is due to the longevity of the customer relationships held by the

Group. The growth rate of 5% is higher than the terminal rate due to expectations of market conditions and higher

inflation in the medium term.

The impairment exercise demonstrated that there was significant headroom in all CGUs on this basis, and so the

Directors are satisfied that no impairment has arisen during the financial period.

		2024
		Represented
		for new
	2025	CGU split
Goodwill allocated to cash-generating units:	£’000	£’000
Goodwill – CGU 1:	121,258	121,258
Goodwill – CGU 2:	4,038	4,038
Total	125,296	125,296

Sensitivity analysis of assumptions

The Group performed further sensitivity analysis by recalculating the fair value of the net assets of the Group on a

“worst case” basis. For the Group, the worst case would be breaching the banking covenants on leverage, as that

could lead to the Group’s revolving credit facility being withdrawn. The size of the impact on revenue to reach this

point was considered, alongside mitigating factors that the Group would take if necessary. This analysis showed

that this potential worst case scenario is considered unlikely to materialise, and so there was no requirement for

impairment. The Group has also assessed the sensitivity of the discount rate and growth rates used in the impairment

testing, and determined that these were not sensitive.

18 Other long-term receivables

	31 March	31 March
	2025	2024
	£’000	£’000
Prepayments	5,971	—

The prepayment amount represents the non-current element of the cash paid to the previous owners of Polaris

Actuaries and Consultants Limited, who are now employees of XPS Group. This amount is subject to a clawback

provision and so will be amortised over the clawback period of three years.

140

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

19 Trade and other receivables

	31 March	31 March
	2025	2024
	£’000	£’000
Trade receivables	30,206	27,650
Less: provision for impairment of trade receivables	(539)	(602)
Net trade receivables	29,667	27,048
Contract assets – accrued income	19,875	16,706
Contract assets – amounts recognised for triennial reviews	1,278	1,355
Total contract assets	21,153	18,061
Total financial assets other than cash and cash equivalents carried at amortised cost	50,820	45,109
Prepayments	9,664	5,530
Other receivables	199	283
Total trade and other receivables	60,683	50,922

The carrying value of trade and other receivables carried at amortised cost approximates to fair value.

				Past due
		Past due	Past due	more than
	Current	0–30 days	31–90 days	90 days	Total
31 March 2025	£’000	£’000	£’000	£’000	£’000
Expected loss rate	0%	1%	4%	12%
Gross carrying amount	23,743	3,932	1,805	726	30,206
Loss provision	71	32	66	86	255
Amendment for specific bad debt provision	(71)	(32)	(66)	453	284
Total	—	—	—	539	539

				Past due
		Past due	Past due	more than
	Current	0–30 days	31–90 days	90 days	Total
31 March 2024	£’000	£’000	£’000	£’000	£’000
Expected loss rate	0%	1%	7%	41%
Gross carrying amount	20,046	4,788	1,867	949	27,650
Loss provision	72	50	129	389	640
Amendment for specific bad debt provision	(72)	(50)	(129)	213	(38)
Total	—	—	—	602	602

The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit

loss provision for trade receivables and contract assets. The expected loss rates are based on the Group’s historical

credit losses experienced over the three-year period prior to the period end. The historical loss rates are then adjusted

for current and forward-looking information affecting the Group’s customers.

Once the IFRS 9 approach has been calculated, the Group then calculates a specific debt provision based on age of

debt and specific client knowledge. The provision is then adjusted to take this detail into account.

Of the March 2024 contract asset balance relating to triennial reviews of £1,355,000, £1,119,000 was billed in the year,

reducing the brought forward amount. A further £1,042,000 of revenue was recognised in the year. There are no other

significant movements in the contract assets balance in the year. The March 2025 contract asset balance is expected

to be billed in the year ending 31 March 2026 (£1,013,000), the year ending 31 March 2027 (£257,000), and the year

ending 31 March 2028 (£8,000).

Prepayments include an asset of £2,985,000 (2024: £nil) in respect of the current portion of the clawback provision

on the Polaris prepaid acquisition-related remuneration. This receivable is amortised over the clawback period of

three years.

Financial statements

141

XPS Pensions Group plc Annual Report and Accounts 2025

20 Cash and cash equivalents

	31 March	31 March
	2025	2024
	£’000	£’000
Cash and cash equivalents per statement of financial position	14,717	10,005
Cash and cash equivalents per statement of cash flows	14,717	10,005

The balance comprises solely cash at bank and on hand.

21 Loans and borrowings

		Due
	Due within	between		Sub-total
	1 year	1 and 2	Due after	(non-
	(current)	years	2 years	current)	Total
31 March 2025	£’000	£’000	£’000	£’000	£’000
Drawn revolving credit facility	—	—	55,000	55,000	55,000
Capitalised debt arrangement fees	—	—	(979)	(979)	(979)
Total	—	—	54,021	54,021	54,021

	Due	Due
	within	between		Sub-total
	1 year	1 and 2	Due after	(non-
	(current)	years	2 years	current)	Total
31 March 2024	£’000	£’000	£’000	£’000	£’000
Drawn revolving credit facility	—	—	24,000	24,000	24,000
Capitalised debt arrangement fees	—	—	(614)	(614)	(614)
Total	—	—	23,386	23,386	23,386

The book value and fair value of loans and borrowings are not materially different.

Terms and debt repayment schedule

	Amount			Year of
31 March 2025	£’000	Currency	Nominal interest rate	maturity
Revolving credit facility	55,000	GBP	1.20% above SONIA	2029

	Amount		Nominal interest	Year of
31 March 2024	£’000	Currency	rate	maturity
Revolving credit facility	24,000	GBP	1.25% above SONIA	2026

At 31 March 2025 the Group had drawn down £55,000,000 (2024: £24,000,000) of its £120,000,000 (2024:

£100,000,000) revolving credit facility. The Group’s revolving facility agreement is for £120 million with an accordion

of £50 million. This facility had a four-year term which started in March 2025. This facility replaces the Group’s

previous facility which was due to expire in October 2026. Interest is calculated at a margin above SONIA, subject

to a net leverage test. The related fees for access to the facility are included in the consolidated statement of

comprehensive income.

Capitalised loan-related costs are amortised over the life of the loan to which they relate.

Bank debt is secured by way of debentures in the Group companies which are obligors to the loans. These are XPS

Pensions Group plc, XPS Consulting Limited, XPS Pensions Consulting Limited, XPS SIPP Services Limited, XPS

Holdings Limited, XPS Pensions Limited, XPS Investment Limited, XPS Administration Limited, and Polaris Actuaries

and Consultants Ltd. The security is over all the assets of the companies which are obligors to the loans.

22 Reconciliation of liabilities arising from financing activities

				Non-cash
				change:
			Other	new leases/
	31 March	Cash	non-cash	interest		31 March
	2024	flows	changes	this year 2025
	£’000	£’000	£’000	£’000	£’000
Drawn revolving credit facility	24,000	31,000	—	—	55,000
Capitalised debt arrangement fees	(614)	(999)	634	—	(979)
Interest payable on long-term borrowings	89	(1,818)	—	1,775	46
Lease liabilities	9,167	(2,315)	—	8,101	14,953
Total liabilities from financing activities	32,642	25,868	634	9,876	69,020

142

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

22 Reconciliation of liabilities arising from financing activities continued

				Non-cash
				change:
			Other	new leases/
	31 March	Cash	non-cash	interest		31 March
	2023	flows	changes	this year 2024
	£’000	£’000	£’000	£’000	£’000
Drawn revolving credit facility	68,000	(44,000)	—	—	24,000
Capitalised debt arrangement fees	(690)	(200)	276	—	(614)
Interest payable on revolving credit facility	49	(3,905)	—	3,945	89
Lease liabilities	9,935	(3,085)	—	2,317	9,167
Total liabilities from financing activities	77, 294	(51,190)	276	6,262	32,642

Net debt for bank reporting purposes:

	31 March	31 March
	2025	2024
	£’000	£’000
Drawn revolving credit facility	55,000	24,000
Less: cash	(14,717)	(10,005)
Net debt	40,283	13,995

For banking covenant purposes, net debt includes any amounts owed as contingent consideration, but excludes

lease liabilities.

23 Provisions for other liabilities and charges

	Social
	security
	costs on		Professional
	PSP/SEPs	Dilapidations	indemnity	Total
31 March 2025	£’000	£’000	£’000	£’000
Balance at 1 April 2024	1,857	1,353	506	3,716
Provisions made during the year	2,818	438	605	3,861
Provisions used during the year	(1,269)	—	(401)	(1,670)
Provisions released unused during the year	—	—	(304)	(304)
Balance at 31 March 2025	3,406	1,791	406	5,603
Due within one year or less	1,929	365	406	2,700
Due after more than one year:
Between one and three years	1,477	165	—	1,642
Over three years	—	1,261	—	1,261
	3,406	1,791	406	5,603

	Social
	security
	costs on		Professional
	PSP/SEPs	Dilapidations	indemnity	Total
31 March 2024	£’000	£’000	£’000	£’000
Balance at 1 April 2023	1,155	1,911	812	3,878
Provisions made during the year	1,466	317	923	2,706
Provisions used during the year	(764)	(675)	(986)	(2,425)
Provisions released unused during the year	—	(200)	(243)	(4 43)
Balance at 31 March 2024	1,857	1,353	506	3,716
Due within one year or less	954	454	506	1,914
Due after more than one year:
Between one and three years	903	73	—	976
Over three years	—	826	—	826
	1,857	1,353	506	3,716

Financial statements

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XPS Pensions Group plc Annual Report and Accounts 2025

23 Provisions for other liabilities and charges continued

Social security costs (National Insurance) are payable on gains made by employees on exercise of share options

granted to them. The eventual liability to National Insurance is dependent on:

• the market price of the Group’s shares at the date of exercise;

• the number of options that will be exercised; and

• the prevailing rate of National Insurance at the date of exercise.

Dilapidations relate to the estimated cost of returning a leasehold property to its original state at the end of the lease in

accordance with the lease terms. The cost is recognised within the depreciation of the right-of-use asset over the remaining

term of the lease. The main uncertainty relates to estimating the cost that will be incurred at the end of the lease.

The dilapidations provision will be utilised after the end of the lease of the asset to which it relates.

The Group is involved in a small number of potential professional indemnity claims. The amount provided represents

the Directors’ best estimate of the Group’s liability, after having taken legal advice. Uncertainties relate to whether

claims will be settled out of court or, if not, whether the Group is successful in defending any action. Because of the

nature of the disputes, the Directors have not disclosed future information on the basis that they believe that this

would be seriously prejudicial to the Group’s position in defending the cases brought against it. The provision relating

to potential professional indemnity claims is updated depending on the status of each individual claim.

24 Deferred tax

Analysis of the breakdown and movement of deferred tax during the year is as follows:

	Balance at	Recognised	Recognised	Acquired	31 March
	1 April 2024	in income	in equity	in period	2025
	£’000	£’000	£’000	£’000	£’000
Property, plant and equipment	319	129	—	—	448
Capital gains	943	(943)	—	—	—
Other temporary and deductible differences – share-based payments	(3,499)	(486)	(2,366)	—	(6,351)
Other temporary and deductible differences – other	496	406	—	—	902
Customer relationships	17,334	(820)	—	4,625	21,139
	15,593	(1,714)	(2,366)	4,625	16,138

	Balance at	Recognised	Recognised		31 March
	1 April 2023	in income	in equity 2024
	£’000	£’000	£’000	£’000
Property, plant and equipment	226	93	—	319
Capital gains	943	—	—	943
Other temporary and deductible differences – share-based payments	(1,806)	(526)	(1,167)	(3,499)
Other temporary and deductible differences – other	(10)	506	—	496
Customer relationships	19,092	(1,758)	—	17,334
	18,445	(1,685)	(1,167)	15,593

Deferred tax assets are recognised to the extent that the realisation of the related tax benefit through future taxable

profits is probable. Deferred tax assets and liabilities have been measured at the rate they are expected to unwind at,

using a rate substantively enacted at 31 March 2025, which is not lower than 25% (2024: 25%) .

144

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

25 Trade and other payables

	31 March	31 March
	2025	2024
	£’000	£’000
Trade payables	7,888	2,839
Accrued expenses	21,234	17,215
Accrued acquisition-related remuneration (note 5)	670	2,534
Interest payable	46	89
Other payables	299	495
Total financial liabilities excluding leases, loans and borrowings, classified as financial liabilities at amortised cost	30,137	23,172
Other payables – tax and social security payments	2,830	2,411
Other payables – VAT	7,131	7,358
Contract liabilities	7,028	10,781
Total trade and other payables	47,126	43,722
Current	46,456	43,722
Non-current	670	—
Total trade and other payables	47,126	43,722

The carrying value of trade and other payables classified as financial liabilities measured at amortised cost

approximates to fair value.

The March 2025 contract liability balance is expected to be recognised in the year ended 31 March 2026 (£6,611,000),

31 March 2027 (£377,000), and 31 March 2028 (£40,000). Of the March 2024 contract liability balance of £10,781,000,

£10,435,000 was recognised in revenue in the year to 31 March 2025, £250,000 will be recognised in the year to

31 March 2026, and £96,000 in the year to 31 March 2027.

The non-current trade and other payables relate to acquisition-related remuneration for the Polaris acquisition,

which is payable in three years’ time. The amount accrued represents one month’s worth of the expected payout

based on certain performance criteria. This will be reviewed and updated if the expected payout changes over the

three-year period.

26 Current income tax liabilities

	31 March	31 March
	2025	2024
	£’000	£’000
Tax payable	234	427

27 Share capital

		31 March 2025		31 March 2024
	Ordinary	Ordinary	Ordinary	Ordinary
	shares	shares	shares	shares
	’000	£’000	’000	£’000
In issue at the beginning of the year	207,545	104	207,443	104
Issued during the year	810	—	102	—
In issue at the end of the year	208,355	104	207, 545	104

	31 March 2025		31 March 2024
	’000	£’000	’000	£’000
Allotted, called up and fully paid
Ordinary shares of 0.05p (2024: 0.05p) each Shares held by the Group’s Employee Benefit Trust	203,654	102	206,032	103
Ordinary shares of 0.05p (2024: 0.05p) each	4,701	2	1,513	1
Shares classified in shareholders’ funds	208,355	104	207, 545	104

The number of shares allotted in the year is 810,440 (2024: 101,835).

The Group has invested in the shares for its Employee Benefit Trust (EBT). These shares are held on behalf of

employees and legal ownership will transfer to those employees on the exercise of an award. This investment in own

shares held in trust is deducted from equity in the consolidated statement of changes in equity.

Financial statements

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XPS Pensions Group plc Annual Report and Accounts 2025

28 Reserves

The following describes the nature and purpose of each reserve within equity:

Reserve	Description and purpose
Retained earnings:	All net gains and losses recognised through the consolidated statement of comprehensive
	income.
Share premium:	Amounts subscribed for share capital in excess of nominal value.
Merger relief reserve:	The merger relief reserve represents the difference between the fair value and nominal value
	of shares issued on the acquisition of subsidiary companies.
Investment in own shares held	Cost of own shares held by the EBT.
in trust:

29 Financial instruments

The fair values and the carrying values of financial assets and liabilities are the same.

Credit risk

The maximum exposure to credit risk at the reporting date was:

	Carrying	Carrying
	amount	amount
	31 March	31 March
	2025	2024
	£’000	£’000
Trade receivables	30,206	27,650
Provision for impairment of trade receivables	(539)	(602)
Net trade receivables due	29,667	27,048
Contract assets – accrued income	19,875	16,706
Contract assets – amounts recognised for triennial reviews	1,278	1,355
Cash and cash equivalents	14,717	10,005
Total	65,537	55,114

Credit risk mitigation

The ageing of trade receivables at the reporting date was:

	31 March	31 March
	2025	2024
	£’000	£’000
Not past due	23,743	20,046
Past due 0–30 days	3,932	4,788
Past due 31–90 days	1,805	1,867
Past due more than 90 days	726	949
Total	30,206	27,650
Movement in impairment allowance for trade receivables
Balance at start of the year	602	363
Increase during the year	539	510
Receivable written off during the year as uncollectable	(34)	(107)
Reversal of allowances	(568)	(164)
Balance at end of the year	539	602

The Group prepared a forward-looking impairment model using a provision matrix based on historical data. Using

this, the Group believes that an impairment allowance of £539,000 (2024: £602,000) is adequate in respect of

trade receivables. Those debts which have not been provided against are considered recoverable by the Group.

In accordance with IFRS 9, the expected credit loss (ECL) model was used to calculate the impairment loss.

The Group has considered whether any provision needs to be made for credit losses on contract assets, and

concluded that there are none.

Cash flow risk

The Group is exposed to cash flow interest rate risk in two main respects: firstly, corporate and client bank deposits,

which earn interest at a variable rate, although not at a material level; and secondly, interest expense arising on the

Group’s revolving credit facility at a margin over SONIA.

146

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

29 Financial instruments continued

Interest rate risk

The interest rate on the Group’s revolving credit facility is a margin over SONIA and as such the Company is at risk

from SONIA increases. The sensitivity of the interest rate risk has been assessed and it is not material.

Liquidity risk

Liquidity risk arises from the Group’s working capital and the finance charges and principal repayments on its debt

instruments. It is the risk the Group will encounter difficulty in meeting its financial obligations as they fall due.

The following table sets out the contractual maturities (representing undiscounted cash flows) of financial liabilities:

		Between	Between	Between
	Up to 3	3 and 12	1 and 2	2 and 5	Over	31 March
	months	months	years	years	5 years	2025
	£’000	£’000	£’000	£’000	£’000	£’000
Trade and other payables	30,137	—	—	—	—	30,137
Leases	965	2,526	3,145	5,909	4,956	17, 501
Loans and borrowings	—	—	—	55,000	—	55,000
Bank interest	807	2,268	2,109	2,354	—	7, 538
	31,909	4,794	5,254	63,263	4,956	110,176

		Between	Between	Between
	Up to 3	3 and 12	1 and 2	2 and 5	Over	31 March
	months	months	years	years	5 years	2024
	£’000	£’000	£’000	£’000	£’000	£’000
Trade and other payables	23,172	—	—	—	—	23,172
Leases	555	1,604	1,888	4,321	1,952	10,320
Loans and borrowings	—	—	—	24,000	—	24,000
Bank interest	396	1,127	1,522	973	—	4,018
	24,123	2,731	3,410	29,294	1,952	61,510

The Group does not have any concerns over meeting its liabilities as they fall due, as the forecasts prepared indicate

sufficient cash receipts in each period to cover liabilities.

Capital risk

The Group’s objective when managing capital is to maximise shareholder value whilst safeguarding the Group’s ability

to continue as a going concern. Total capital is calculated as total equity in the statement of financial position.

Management of capital

	31 March	31 March
	2025	2024
	£’000	£’000
Total equity	185,407	185,854

30 Notes supporting statement of cash flows

Cash and cash equivalents for the purposes of the statement of cash flows comprise:

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Cash at bank available on demand	14,717	10,005

Financial statements

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XPS Pensions Group plc Annual Report and Accounts 2025

31 Related party transactions

Key management emoluments during the year

Key management personnel are those persons having authority and responsibility for planning, directing and

controlling the activities of the Group, being the Board of Directors.

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Emoluments	6,379	4,509
Share-based payment	1,340	1,233
Company contributions to defined contribution pension plans	30	30
Social security costs	783	530
	8,532	6,302

Non-Executive emoluments during the year

	Year ended	Year ended
	31 March	31 March
	2025	2024
	£’000	£’000
Emoluments	500	368
Social security costs	61	45
	561	413

32 Earnings per share

	31 March	31 March
	2025	2024
	£’000	£’000
Profit for the year	30,343	54,167

	31 March	31 March
	2025	2024
	’000	’000
Weighted average number of ordinary shares in issue	206,453	206,760
Diluted weighted average number of ordinary shares	219,437	219,621
Basic earnings per share (pence)	14.7	26.2
Diluted earnings per share (pence)	13.8	24.7

The calculation of basic earnings per share is based on the earnings attributable to ordinary shareholders divided by

the weighted average number of shares in issue during the period.

The decrease compared to the prior year is largely due to the large gain on disposal in the year to 31 March 2024.

Reconciliation of weighted average ordinary shares in issue to diluted weighted average ordinary shares:

	Year	Year
	ended	ended
	31 March	31 March
	2025	2024
	’000	’000
Weighted average number of ordinary shares in issue	206,453	206,760
Dilutive impact of share options vested up to exercise date	792	940
Dilutive impact of PSP and SEP options not yet vested	8,334	9,226
Dilutive impact of dividend yield shares for PSP and SEP options	1,125	1,246
Dilutive impact of SAYE options not yet vested	2,733	1,449
Diluted weighted average number of ordinary shares	219,437	219,621

Share awards were made to the Executive Board members and key management personnel in each year since the

year ending 31 March 2017; these are subject to certain conditions, and each tranche of awards vests three years after

the award date. Dividend yield shares relating to these awards will also be awarded upon vesting of the main awards.

Further shares have been issued under SAYE share schemes in the years ending 31 March 2023 and 2025; these will

vest in the years ending 31 March 2026 and 2028 respectively. These shares are reflected in the diluted number of

shares and diluted earnings per share calculations.

148

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the consolidated financial statements continued

for the year ended 31 March 2025

32 Earnings per share continued

Adjusted earnings per share

	31 March	31 March
	2025	2024
	£’000	£’000
Adjusted profit after tax	45,112	33,496
Adjusted earnings per share (pence)	21.9	16.2
Diluted adjusted earnings per share (pence)	20.6	15.3

The adjusted profit after tax is taken from the trading column of the income statement and excludes the impact of the

exceptional and non-trading items disclosed in note 5.

33 Subsidiaries

The following are the wholly owned companies consolidated within the financial statements of XPS Pensions Group plc:

	Company
Company name	number	Principal activity	Registered address
XPS Financing Limited	08279274	Holding company	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
XPS Consulting Limited	08287502	Holding company	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB

The subsidiaries below are indirectly owned by other Group companies:

	Company
Company name	number	Principal activity	Registered address
XPS Reading Limited	08279362	Holding company	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
XPS Pensions Consulting Limited	02459442	Employee benefit	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
		consultancy
XPS SIPP Services Limited	SC069096	Employee benefit	Scotia House, Castle Business Park, Stirling, Stirlingshire
		consultancy	FK9 4TZ
Xafinity Pensions Trustees Limited	01450089	Dormant	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
Hazell Carr (AT) Services Limited	SC420031	Employee benefit	Scotia House, Castle Business Park, Stirling, Stirlingshire
		consultancy	FK9 4TZ
Hazell Carr (SG) Services Limited	01867603	Dormant	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
Hazell Carr (ES) Services Limited	02372343	Dormant	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
Hazell Carr (PN) Services Limited	00236752	Dormant	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
Hazell Carr (SA) Services Limited	SC086807	Dormant	Scotia House, Castle Business Park, Stirling, Stirlingshire
		FK9	4TZ
Xafinity Employee Benefit Trust	N/A	Trust	JTC Trustees Limited, Elizabeth House, 9 Castle Street,
2013			St Helier, Jersey JE4 2QP
XPS Holdings Limited	04807951	Holding company	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
XPS Administration Holdings	09655671	Holding company	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
Limited
XPS Administration Limited	09428346	Employee benefit	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
		consultancy
XPS Investment Limited	06242672	Employee benefit	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
		consultancy
XPS Pensions Limited	03842603	Employee benefit	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
		consultancy
XPS Pensions (RL) Limited	05817049	Employee benefit	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
		consultancy
XPS Pensions (Trigon) Limited	12085392	Employee benefit	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
		consultancy
MJF Pension Trustees Limited	03394648	Dormant	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
MJF SSAS Trustees Limited	04089958	Dormant	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
Penfida Limited	08020393	Employee benefit	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
		consultancy
Polaris Actuaries and Consultants	09640309	Management	Phoenix House, 1 Station Hill, Reading, Berkshire RG1 1NB
Ltd		consultancy
		activities

Financial statements

149

XPS Pensions Group plc Annual Report and Accounts 2025

33 Subsidiaries continued

Subsidiary audit exemptions

The following UK subsidiary undertakings are exempt from the requirements of the Companies Act 2006 (the “Act”)

relating to the audit of individual accounts by virtue of Section 479A of the Act.

Company name	Company number
XPS Financing Limited	08279274
XPS Reading Limited	08279362
Hazell Carr (AT) Services Limited	SC420031
XPS Holdings Limited	04807951
XPS Administration Holdings Limited	09655671
XPS Pensions (RL) Limited	05817049
XPS Pensions (Trigon) Limited	12085392
Penfida Limited	08020393
Polaris Actuaries and Consultants Ltd	09640309

The Company will guarantee all outstanding liabilities that these subsidiaries are subject to as at the financial year

ended 31 March 2025 in accordance with Section 479C of the Act, as amended by the Companies and Limited Liability

Partnerships (Accounts and Audit Exemptions and Change of Accounting Framework) Regulations 2012. In addition,

the Company will guarantee any contingent and prospective liabilities that these subsidiaries are subject to.

34 Dividends

Amounts recognised as distributions to equity holders of the Parent in the year

	31 March	31 March
	2025	2024
	£’000	£’000
Final dividend for the year ended 31 March 2024: 7.0p per share (2023: 5.7p per share)	14,577	11,825
Interim dividend for the year ended 31 March 2025: 3.7p (2024: 3.0p) per ordinary share was paid
during the year	7,608	6,200
	22,185	18,025

The recommended final dividend payable in respect of the year ended 31 March 2025 is £17.0 million or 8.2p per share

(2024: £14.6 million or 7.0p per share).

The proposed dividend has not been accrued as a liability as at 31 March 2025 as it is subject to approval at the Annual

General Meeting.

	31 March	31 March
	2025	2024
	£’000	£’000
Proposed final dividend for year ended 31 March 2025	16,961	14,630

The Trustee of the Xafinity Employee Benefit Trust has waived its entitlement to dividends.

The Company statement of changes in equity shows that the Company has positive reserves of £183,236,000.

Therefore, there are sufficient distributable reserves in XPS Pensions Group plc in order to pay the proposed

final dividend.

35 Ultimate controlling party

The Directors do not consider that there is an ultimate controlling party.

150

XPS Pensions Group plc Annual Report and Accounts 2025

Statement of financial position – Company

as at 31 March 2025

Note

31 March

2025

£’000

31 March

2024

£’000

Assets

Non-current assets

Investments 5 44,823 38,478

Trade and other receivables 6 268,654 259,006

313,477 297,484

Current assets

Trade and other receivables 6 1 —

Cash and cash equivalents 7 2 1,623

3 1,623

Total assets 313,480 299,107

Liabilities

Non-current liabilities

Trade and other payables 8 46,666 44,464

46,666 44,464

Current liabilities

Current tax liabilities 9 4,592 3,294

4,592 3,294

Total liabilities 51,258 47,758

Net assets 262,222 251,349

Equity and liabilities

Share capital 10 104 104

Share premium 11 1,786 1,786

Merger relief reserve 11 48,687 48,687

Investment in own shares 11 (15,142) (2,925)

Other reserve 11 43,551 37,616

Retained profit 11 183,236 166,081

Total equity 262,222 251,349

The notes on pages 153 to 157 form part of these financial statements.

Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own

statement of comprehensive income. The profit for the financial year of the holding company, as approved by the

Board, was £4 4 , 970,00 0 (2024: £33 , 85 5 , 0 0 0).

These financial statements were approved by the Board of Directors on 18 June 2025 and were signed on its behalf by:

Snehal Shah

Chief Financial Officer

18 June 2025

Registered number: 08279139

Financial statements

151

XPS Pensions Group plc Annual Report and Accounts 2025

Statement of changes in equity – Company

for the year ended 31 March 2025

capital

£’000

premium

£’000

Merger

relief

reserve

£’000

Investment

in own

£’000

Other

reserve

£’000

Retained

profit

£’000

Total

£’000

Balance at 1 April 2023 104 1,786 48,687 (1,350) 32,969 154,270 236,466

Comprehensive income and total comprehensive

income for the year — — — — — 33,855 33,855

Contributions by and distributions to owners

Shares purchased by Employee Benefit Trust

forcash — — — (5,621) — — (5,621)

Exercise of share options settled from the

Employee Benefit Trust — — — 4,046 — (4,019) 27

Share-based payment expense – IFRS 2 charge

in respect of long-term incentives — — — — 4,910 — 4,910

Deferred tax movement in respect of long-term

incentives — — — — (263) — (263)

Dividends paid — — — — — (18,025) (18,025)

Total contributions by and distributions to owners — — — (1,575) 4,647 (22,044) (18,972)

Balance at 31 March 2024 104 1,786 48,687 (2,925) 37,616 166,081 251,349

Balance at 1 April 2024 104 1,786 48,687 (2,925) 37,616 166,081 251,349

Comprehensive income and total comprehensive

income for the year — — — — — 44,970 44,970

Contributions by and distributions to owners

Shares purchased by Employee Benefit Trust

forcash — — — (18,715) — — (18,715)

Exercise of share options settled from the

Employee Benefit Trust — — — 6,498 — (5,630) 868

Share-based payment expense – IFRS 2 charge

in respect of long-term incentives — — — — 5,946 — 5,946

Deferred tax movement in respect of long-term

incentives — — — — (11) — (11)

Dividends paid — — — — — (22,185) (22,185)

Total contributions by and distributions to owners — — — (12,217) 5,935 (27,815) (34,097)

Balance at 31 March 2025 104 1,786 48,687 (15,142) 43,551 183,236 262,222

The appropriate filing of accounts showing sufficient reserves to pay the £22,185,000 dividend was undertaken.

The notes on pages 153 to 157 form part of these financial statements.

152

XPS Pensions Group plc Annual Report and Accounts 2025

Year ended

31 March

2025

£’000

Year ended

31 March

2024

£’000

Cash flows from operating activities

Profit for the year 44,970 33,855

Adjustments for:

Finance income (14,812) (15,876)

Finance costs 2,842 2,727

Income tax expense 3,002 3,294

Dividend income (36,000) (24,000)

2 —

Increase in trade and other receivables (1) —

Net cash inflow from operating activities 1 —

Cash flows from investing activities

Finance income received 25 17

Net cash inflow from investing activities 25 17

Cash flows from financing activities

Purchase of ordinary shares by EBT (18,715) (5,621)

Loans with related parties 17,068 5,523

Net cash outflow from financing activities (1,647) (98)

Net decrease in cash and cash equivalents (1,621) (81)

Cash and cash equivalents at start of year 1,623 1,704

Cash and cash equivalents at end of year 2 1,623

The dividends are paid from a subsidiary company, as the Company itself does not hold a bank account. The

EBT, which is aggregated into the Company results, holds a bank account and so a cash flow statement has been

presented.

The notes on pages 153 to 157 form part of these financial statements.

Statement of cash flows – Company

for the year ended 31 March 2025

Financial statements

153

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the financial statements – Company

for the year ended 31 March 2025

1 Accounting policies

XPS Pensions Group plc (the “Company”) is a public company incorporated in the UK. The principal activity of the

Company is that of a holding company. The registered office is Phoenix House, 1 Station Hill, Reading RG1 1NB.

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted International Accounting Standards.

The financial statements have been prepared under the going concern basis.

The preparation of financial statements in accordance with the requirements of International Financial Reporting

Standards (IFRS) requires the use of certain critical accounting estimates. It also requires management to exercise its

judgement in the process of applying the Company’s accounting policies. The Company makes certain estimates and

assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience

and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

There are no critical judgements or estimates to disclose.

Measurement convention

The financial statements are prepared on the historical cost basis.

Investments in subsidiaries

Investments in subsidiaries are carried at cost, plus capital contributions to the Group’s subsidiary companies in

respect of share-based payment charges, less any provisions for impairment.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options

are shown in equity as a deduction, net of tax, from the proceeds.

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders,

this is when paid and in the case of final dividends, this is when approved by the shareholders at the Annual

General Meeting.

Taxation

Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in profit and loss in the

statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which

case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively

enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous years.

Changes in accounting policies – New standards, interpretations, and amendments effective from 1 April 2024

New and amended standards and interpretations issued by the IASB that apply for the first time in these annual

financial statements do not impact the Company as they are either not relevant to the Company’s activities or require

accounting which is consistent with the Company’s current accounting policies.

New standards and interpretations adopted and not yet adopted

A number of new standards, amendments to standards and interpretations are not effective for 2025, and therefore

have not been applied in preparing XPS Pensions Group plc’s financial statements. These standards, interpretations

and amendments issued by the IASB (of which some are still subject to endorsement by the UK) but not yet effective

are not expected to have a material impact on the Company’s financial statements.

2 Financial risk management

The Company is a holding company and has limited exposure to financial risks. Details of the financial risks

are contained in the Group accounts (note 2) and details of their application to the Company are included in

Company note 13.

3 Capital risk management

The Company is a holding company and will apply the risk management policies of the Group contained in the Group’s

financial statements.

4 Staff numbers and costs

The Company had no employees other than Directors in the year to 31 March 2025 (2024: nil).

No Directors received remuneration for their services to the Company during the year. Directors were remunerated for

their services to the Group by a subsidiary company. See Group accounts note 11 for more information.

Pension contributions of £nil (2024: £nil) were paid on behalf of the Directors in the Company.

154

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the financial statements – Company continued

for the year ended 31 March 2025

5 Investments in subsidiaries

£’000

At 31 March 2023 33,831

Capital contribution arising from share-based payments 4,647

At 31 March 2024 38,478

Capital contribution arising from share-based payments 5,934

Capital contribution 411

At 31 March 2025 44,823

Subsidiary Ownership

Country of

incorporation

Class of

held

Principal

activities Registered address

XPS Financing Limited 100% England and Wales Ordinary Holding

company

Phoenix House, 1 Station Hill,

Reading, Berkshire RG1 1NB

XPS Consulting Limited 100% England and Wales Ordinary Holding

company

Phoenix House, 1 Station Hill,

Reading, Berkshire RG1 1NB

During the year the Group structure was reorganised, which resulted in an additional capital contribution by XPS

Pensions Group plc to its subsidiary.

All other subsidiaries disclosed in note 33 of the Group accounts are indirectly owned by other Group companies.

6 Trade and other receivables

31 March

2025

£’000

31 March

2024

£’000

Receivables due from related parties 268,654 259,006

Other receivables 1 —

268,655 259,006

Non-current receivable 268,654 259,006

Current receivable 1 —

268,655 259,006

7 Cash and cash equivalents

31 March

2025

£’000

31 March

2024

£’000

Cash and cash equivalents per statement of financial position 2 1,623

Cash and cash equivalents per statement of cash flows 2 1,623

Financial statements

155

XPS Pensions Group plc Annual Report and Accounts 2025

8 Trade and other payables

31 March

2025

£’000

31 March

2024

£’000

Payables due to related parties 46,666 44,464

Total trade and other payables 46,666 44,464

9 Current tax liabilities

31 March

2025

£’000

31 March

2024

£’000

Corporation tax payable 4,592 3,294

10 Share capital

Details on the share capital of the Company are contained in the Group financial statements.

11 Reserves

Reserve Description and purpose

Share premium: Amount subscribed for share capital in excess of nominal value.

Other reserve: The other reserve represents the amount in respect of the equity-settled awards made by the Employee

Benefit Trust to subsidiary companies as instructed by the Company.

Merger relief

reserve:

The merger relief reserve represents the difference between the fair value and nominal value of shares

issued on the acquisition of subsidiary companies.

Investment in

own shares:

Cost of own shares held by the EBT. See note 12 for more information.

Retained profit: All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.

12 Investment in own shares

31 March

2025

£’000

31 March

2024

£’000

Balance at 1 April 2,925 1,350

Acquired during the year 18,715 5,621

Utilised during the year (6,498) (4,046)

Balance at 31 March 15,142 2,925

Investment in own shares represents the cost of shares in the Company purchased in the market and held by the

Employee Benefit Trust (EBT) to satisfy awards under the Group’s employee share option plans (see note 12 to the

Group’s consolidated financial statements).

During the year, 5,923,045 (2024: 3,067,346) shares with a total value of £18,715,000 (2024: £5,621,000) have been

purchased by the EBT. 2,734,656 (2024: 2,570,801) shares were used in the year to satisfy vested employee share

options. The number of ordinary shares held by the EBT at 31 March 2025 was 4,701,149 (2024: 1,512,760).

156

XPS Pensions Group plc Annual Report and Accounts 2025

Notes to the financial statements – Company continued

for the year ended 31 March 2025

13 Financial instruments

The fair values and the carrying values of financial assets are the same.

Credit risk

The maximum exposure to credit risk at the reporting date was:

Carrying

amount

31 March

2025

£’000

Carrying

amount

31 March

2024

£’000

Receivables due from related parties 268,654 259,006

Other receivables 1 —

Total 268,655 259,006

Loans from related parties are repayable on demand. Credit risk for receivables due from related parties has not

increased significantly since their initial recognition.

Liquidity risk

The Company does not have any significant liquidity risk, as its receivables and payables are all with related parties

and so can control cash flows with intercompany trading partners to ensure liquidity.

Interest rate risk

The Company does not have any significant interest rate risk, as its receivables and payables are all with related

parties. All intercompany receivable and payable balances incur interest income and expense at the same rate, which

is determined by reference to the Group’s borrowing rate on its revolving credit facility.

Capital risk management

As part of XPS Group, the Company is focused on delivering value for its shareholders whilst ensuring the Group is

able to continue effectively as a going concern. Total capital for the Company comprises total equity.

The policy for managing capital is to increase shareholder value by maximising profits and cash. Budgets and forecasts

are set in the short and medium term that the Company feels are achievable. The processes for managing capital are

regular reviews of financial data to ensure that the Company is tracking the targets set and to reforecast as necessary

based on the most up-to-date information. This then contributes to the Group’s forecast which ensures future covenant

test points are met. The Group continues to meet these test points and they have been achieved over the last 12

months. Further information can be found within the consolidated financial statements of XPS Pensions Group plc.

Management of capital

31 March

2025

£’000

31 March

2024

£’000

Total equity 262,222 251,349

14 Related party transactions

Amounts receivable from/(payable to) related parties at the balance sheet date

31 March

2025

£’000

31 March

2024

£’000

Loans to related parties 268,654 259,006

Loans from related parties (46,666) (44,464)

Net loans to related parties 221,988 214,542

Movement in loans to related parties in the year are as follows:

31 March

2025

£’000

31 March

2024

£’000

Interest income 14,788 15,860

Increase in loans to related parties (41,141) (24,515)

Intercompany dividend received 36,000 24,000

Total 9,647 15,345

Of the increase in loans to related parties, £17,070,000 (2024: £5,525,000) was cash funded to XPS Pensions Group plc.

The rest of the movements were non-cash.

Financial statements

157

XPS Pensions Group plc Annual Report and Accounts 2025

14 Related party transactions continued

Movement in loans from related parties in the year are as follows:

31 March

2025

£’000

31 March

2024

£’000

Interest expense (2,781) (2,684)

Decrease/(increase) in loans from related parties 579 (523)

Total (2,202) (3,207)

All of the increases in loans from related parties in the current and the prior year were non-cash movements.

All transactions with related parties are made in the ordinary course of business and balances outstanding at the

reporting date are unsecured and are non-current as the entities to whom they are payable have forgone their right

to payment for at least twelve months from the balance sheeet date. Loans accrue interest at a rate in line with

the Group’s bank borrowing rate. 6.15% was applied in the year (2024: 6.50%). All related parties are part of the

XPS Group.

15 Ultimate controlling party

The Directors do not consider that there is an ultimate controlling party.

158

XPS Pensions Group plc Annual Report and Accounts 2025