Guidance: Preston Guidance: February 2026

Why It Matters

Employers now have a standardized, legally‑aligned tool to meet pension reinstatement obligations, reducing compliance risk and ensuring fair cost allocation for part‑time workers.

Key Takeaways

• Updated earnings factors released for February 2026
• Interest factors provided for actuarial pension calculations
• Guidance supports part‑timer pension reinstatement compliance
• Includes separate Employee NICs rebate spreadsheet
• Ensures actuarially fair pension service cost

Pulse Analysis

The February 2026 Preston guidance marks the latest iteration of a regulatory framework that originated from early‑2000s European Court of Justice and House of Lords rulings. Those decisions forced UK pension schemes to extend retroactive entitlement to part‑time employees, provided they satisfied statutory criteria. To operationalise that mandate, the government issues bi‑annual Preston factors—earnings and interest rates that underpin actuarial calculations—ensuring that reinstated service is priced at a neutral, fair cost relative to original contributions.

The newly released Excel annex supplies employers with the most recent earnings multipliers and interest assumptions, calibrated to current market conditions and demographic trends. A companion spreadsheet outlines the Employee National Insurance Contributions (NICs) rebate, allowing firms to offset the fiscal impact of reinstating part‑time staff onto pension schemes. By integrating these factors into pension valuation models, actuaries can produce precise cost estimates, facilitating transparent communication with affected employees and auditors alike.

For businesses, the guidance translates into clearer budgeting for pension liabilities and mitigates the risk of non‑compliance penalties. It also supports strategic workforce planning, as firms can now assess the financial implications of expanding part‑time roles with confidence. Looking ahead, regular updates to the Preston factors will remain essential as interest rates fluctuate and legislative refinements emerge, reinforcing the importance of staying current with the guidance to maintain actuarial fairness and regulatory alignment.