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15 July 2026

Latest valuation finds USS is in a very strong position

USS’s funding position has continued to improve since its last valuation in 2023, which showed a surplus after more than a decade of reporting deficits.

Favourable financial market conditions, and the strong performance of the Scheme’s defined benefit assets relative to its liabilities, have strengthened the funding position.

The provisional results of the 2026 valuation, set out in a consultation launched with UCEA today (15 July), show:

  • A £16.9bn surplus (127% funded, compared to £7.4bn / 111% funded at the 2023 valuation)
  • An indicative future service cost of 16.4% of salaries (compared to the current overall contribution rate of 20.6%)

The Scheme’s funding position provides an opportunity for discussions on stakeholders’ strategic objectives for USS; what they most want to achieve, and what to avoid, at the 2026 valuation and over the longer term.

A continued desire for stability has been the dominant theme emerging from early engagement, most importantly UCEA’s summary of employers’ feedback on a discussion document issued in January.

The overall contribution rate will be determined by the Trustee after considering UCEA’s response to the consultation and advice from the Scheme Actuary.

The Joint Negotiating Committee will then be able to decide what, if anything, it wants to do in response.

In addition to formal statutory matters, the consultation with UCEA seeks to validate employers’ preliminary views, given the provisional results show that the Scheme could support the continuation of existing benefit and contribution levels.

Alternatively, there are a range of choices that the Scheme could also support, which the sector will be able to review as part of the consultation.

Dame Kate Barker, Chair of the USS Board, said: “A sustained and material surplus provides a chance to consider the Scheme’s strategic direction. This is a welcome change to the funding challenges USS faced over the previous decade.

“The current strong funding position presents an opportunity to put USS on a long-term stable footing, which would be consistent with what the sector said it wanted to achieve at the 2023 valuation. This was also a major theme in early discussions on the 2026 valuation.

“But there are choices to be considered, so it is important the sector is clear about what it wants to achieve — and what it wants to avoid — at this valuation and over the long term.”

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