Northumbrian Water: Court rules on conditional increases

The High Court has today handed down judgment in Northumbrian Water Ltd v Northumbrian Water Pension Trustees Ltd [2026] EWHC 1952 (Ch). The case concerned rules guaranteeing annual pension increases in line with RPI up to 5%, with any excess payable where the trustee considered, after consulting the scheme actuary, that this could be done without increasing the employer’s ordinary annual contributions. The disputed excess increases affected some 2,000 members and had an estimated value of about £26 million.

Richard Smith J held that the trustee’s assessment must extend to any future increase in employer contributions, including one arising at the next scheduled valuation. The trustee may consider all reasonably foreseeable events and the effect of the proposed increase on the security of existing benefits. A full RPI increase should not be awarded where there is material uncertainty about whether additional employer contributions would be required. The judgment also considers the treatment of competing claims across a formerly segregated scheme and the relationship between mandatory, partial and catch-up increases.

A full note on the case will be published on this website in due course. In the meantime, the full judgment can be found here.