32816-Lucy-Group-AR-2025 web ready spreads_FINAL

Notes to the Accounts continued

FINANCIAL STATEMENTS

25. Pensions continued The Scheme is managed by a board of Trustees appointed in part by the Company and in part from elections by members of the Scheme. The Trustees have responsibility for obtaining valuations of the fund, administering benefit payments and investing the Scheme’s assets. The Trustees delegate some of these functions to their professional advisers where appropriate. The Scheme and UURBs arrangement expose the Company to a number of risks: | Investment risk . The Scheme holds investments in asset classes, such as equities, which have volatile market values and, while these assets are expected to provide real returns over the long term, the short-term volatility can cause additional funding to be required if deficits emerge. | Interest rate risk. The Scheme’s liabilities are assessed using market yields on high-quality corporate bonds to discount the liabilities. As the Scheme holds assets such as equities, the value of the assets and liabilities may not move in the same way. | Inflation risk. A significant proportion of the benefits due under the Scheme are linked to inflation. Although the Scheme’s assets are expected to provide a good hedge against inflation over the long term, movements over the short term could lead to deficits emerging. | Mortality risk. In the event that members live longer than assumed, deficits may emerge in the Scheme. | Member options. Certain benefit options may be exercised by members without requiring the consent of the Trustees or the Company, for example exchanging pension for cash at retirement. In this example, if fewer members than expected exchange pension for cash at retirement then a funding strain will emerge. There were no amendments, curtailments or settlements during the period. The weighted average duration of the defined benefit obligation is 11 years, which is slightly lower than last year when the duration was approximately 12 years. Disclosures under IAS19

25. Pensions continued

Bid values as at 31 Dec 2025 £000

The current asset split is as follows:

19,977

Equities

763

Target return

20,499 15,356

Corporate bonds Index linked gilts

9,443

Gilts Cash

838

Total assets

66,876

At 31 Dec 2025 £000

At 31 Dec 2024 £000

Balance sheet

66,876

Fair value of assets

64,129

(45,643) 21,233 (5,308) 15,925

Present value of funded obligations

(45,937)

Surplus in scheme

18,192

Deferred tax

(4,548) 13,644

Net defined benefit asset

Period to 31 Dec 2025 £000

Period to 31 Dec 2024 £000

Amount recognised in profit and loss

312 381

Current service cost Administration costs Interest on liabilities Interest on assets Past service costs

379 501

Principal actuarial assumptions

At 31 Dec 2025

At 31 Dec 2024

5.40% p.a. 2.95% p.a. 2.50% p.a. 2.95% p.a. 2.90% p.a. 2.05% p.a. 2.10% p.a.

Discount rate Inflation (RPI) Inflation (CPI) Salary increases

5.40% p.a. 3.25% p.a. 2.80% p.a. 3.25% p.a. 3.15% p.a. 2.15% p.a. 2.25% p.a.

2,406

2,248 (3,016)

(3,390)

– –

143

Settlement and curtailment cost Total (credit)/charge to profit and loss

–

Pension increase (RPI max 5% p.a.) Pension increase (RPI max 2.5% p.a.) Pension increase (CPI max 3% p.a.)

(291)

255

117% of the S3PA tables with CMI 2024 projections using a long-term improvement rate of 1.25% p.a Members are assumed to take 25% of their pension as tax free cash

Post-retirement mortality

117% of the S3PA tables with CMI 2023 projections using a long-term improvement rate of 1.25% p.a Members are assumed to take 25% of their pension as tax free cash

Commutation

75%

Proportion married

75%

1.7% of liabilities for current Scheme members plus£40k for historic transfers out

GMP equalisation allowance

1.7% of liabilities for current Scheme members plus£40k for historic transfers out

21.9 20.6 24.4 23.0

Life expectancy at age 65 of male aged 45 Life expectancy at age 65 of male aged 65 Life expectancy at age 65 of female aged 45 Life expectancy at age 65 of female aged 65

21.5 20.3 24.3 22.9

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Lucy Group Ltd Annual Report & Accounts 2025

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