REG - Quilter PLC - Quilter plc - 2025 Full Year Results [Part 2]
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RNS Number : 2103V Quilter PLC 04 March 2026
Statement of Directors' responsibilities
in respect of the preliminary announcement of the Annual Report and the financial statements
The Directors confirm that, to the best of their knowledge:
· The results in this preliminary announcement have been taken from
the Group's 2025 Annual Report, which will be available on the
Company's website on 17 March 2026; and
· The financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group
Signed on behalf of the Board
Steven
Levin
Mark Satchel
Chief Executive Officer Chief Financial
Officer
4 March 2026
Consolidated statement of comprehensive income
For the year ended 31 December 2025
£m
Notes Year ended Year ended
31 December 31 December
2025 2024
Income
Fee income and other income from service activities 733 544
Investment return 8,607 4,877
Other income 24 28
Total income 9,364 5,449
Expenses
Investment contract claims benefits (1) -
Change in investment contract liabilities 15 (7,145) (4,065)
Fee and commission expenses and other acquisition costs (51) (49)
Change in third-party interests in consolidated funds (1,223) (587)
Other operating and administrative expenses (600) (691)
Finance costs (21) (21)
Total expenses (9,041) (5,413)
Impairment of investments in associates - (1)
Share of profit after tax of associates 1 -
Profit before tax 324 35
Income tax expense attributable to policyholder returns 7(a) (161) (95)
Profit/(loss) before tax attributable to shareholder returns 163 (60)
Income tax expense 7(a) (204) (69)
Less: income tax expense attributable to policyholder returns 161 95
Income tax (expense)/credit attributable to shareholder returns 7(a) (43) 26
Profit/(loss) after tax attributable to the owners of the Company 120 (34)
Other comprehensive income/(expense)
Items that may be reclassified subsequently to profit or loss
Exchange gains/(losses) on translation of foreign operations 1 (1)
Total comprehensive income 121 (35)
Earnings per Ordinary Share
Basic earnings per Ordinary Share (pence) 8 8.9 (2.5)
Diluted earnings per Ordinary Share (pence) 8 8.6 (2.5)
All income and expenses relate to continuing operations.
Consolidated statement of financial position
At 31 December 2025
£m
Notes 31 December 31 December
2025 2024
Assets
Goodwill and intangible assets 9 328 339
Property, plant and equipment 86 91
Investment property 8 9
Investments in associates 21 16
Contract costs 31 24
Loans and advances 44 56
Financial investments 10 73,362 59,360
Deferred tax assets 88 115
Current tax receivable - 45
Trade, other receivables and other assets 398 418
Derivative assets 24 26
Cash and cash equivalents 13 2,152 1,949
Total assets 76,542 62,448
Equity and liabilities
Equity
Ordinary Share capital 14 115 115
Ordinary Share premium reserve 58 58
Capital redemption reserve 346 346
Share-based payments reserve 40 42
Other reserves - (1)
Retained earnings 907 863
Total equity 1,466 1,423
Liabilities
Investment contract liabilities 15 64,493 51,758
Third-party interests in consolidated funds 9,394 8,225
Provisions 16 63 111
Deferred tax liabilities 180 96
Current tax payable 2 1
Borrowings and lease liabilities 271 275
Trade, other payables and other liabilities 649 506
Derivative liabilities 24 53
Total liabilities 75,076 61,025
Total equity and liabilities 76,542 62,448
Approved by the Board of Directors and authorised for issue on 4 March 2026
and signed on its behalf by:
Steven Levin Mark Satchel
Chief Executive Officer Chief Financial Officer
Consolidated statement of changes in equity
For the year ended 31 December 2025
£m
Year ended 31 December 2025 Ordinary Ordinary Share Capital redemption reserve(2) Share-based payments reserve Other reserves Retained earnings Total
Share premium reserve share-
capital holders'
equity
Balance at 1 January 2025 115 58 346 42 (1) 863 1,423
Profit after tax attributable to the owners of the Company - - - - - 120 120
Other comprehensive income - - - - 1 - 1
Total comprehensive income - - - - 1 120 121
Dividends - - - - - (84) (84)
Movement in own shares(3) - - - - - (13) (13)
Equity-settled share-based payment transactions - - - (5) - 18 13
Aggregate tax effects of items recognised directly in equity - - - 3 - 3 6
Total transactions with the owners of the Company - - - (2) - (76) (78)
Balance at 31 December 2025 115 58 346 40 - 907 1,466
£m
Year ended 31 December 2024 Ordinary Ordinary Share Capital redemption reserve(2) Share-based payments reserve Other reserves Retained earnings Total
Share premium reserve share-
capital holders'
equity
Balance at 1 January 2024 115 58 346 42 - 958 1,519
Loss after tax attributable to the owners of the Company - - - - - (34) (34)
Other comprehensive expense - - - - (1) - (1)
Total comprehensive income - - - - (1) (34) (35)
Dividends - - - - - (73) (73)
Exchange rate movements (ZAR/GBP)(1) - - - - - (1) (1)
Movement in own shares(3) - - - - - (6) (6)
Equity-settled share-based payment transactions - - - (4) - 18 14
Aggregate tax effects of items recognised directly in equity - - - 4 - 1 5
Total transactions with the owners of the Company - - - - - (61) (61)
Balance at 31 December 2024 115 58 346 42 (1) 863 1,423
(1)For shares registered on the Johannesburg Stock Exchange, the amounts of
proposed dividends are set in South African Rand on the relevant Market
Announcement date which is prior to the date of payment. The impact of
exchange rate movements between these dates is recognised directly in equity.
The Group held cash in South African Rand equal to the expected cash outflows
and therefore was economically hedged for these payments. Refer to note
5(b)(vi) for further details.
(2)The Capital redemption reserve is comprised of the nominal value of shares
cancelled or shares redeemed under share buyback and capital return
programmes.
(3)The number of own shares held by Quilter's employee benefit trusts is
disclosed in note 8(a).
Consolidated statement of cash flows
For the year ended 31 December 2025
The cash flows presented in this statement cover all the Group's activities
and include flows from both policyholder and shareholder activities. All cash
and cash equivalents are available for general use by the Group for the
purposes of the disclosures required under IAS 7 Statement of Cash Flows
except for cash and cash equivalents in consolidated funds (as shown in note
13).
£m
Note Year ended Year ended
31 December 31 December
2025 2024
Cash flows from operating activities
Cash flows from operating activities 6,239 4,654
Taxation paid (43) (69)
Total net cash flows from operating activities 13(b) 6,196 4,585
Cash flows from investing activities
Net purchases and sales of financial investments excluding fixed-term deposits (5,810) (4,360)
Investment in fixed-term deposits (50) -
Purchase of property, plant and equipment (4) (8)
Acquisition of subsidiaries (2) (6)
Acquisition of shares in associates (4) (14)
Total net cash flows from investing activities (5,870) (4,388)
Cash flows from financing activities
Dividends paid to the owners of the Company (84) (73)
Exchange rate movements passed to shareholders(1) - (1)
Quilter plc shares acquired for use within the Group's employee share schemes (13) (6)
Finance costs on borrowings(2) (17) (18)
Payment of interest on lease liabilities(2) (2) (2)
Payment of principal of lease liabilities (7) (8)
Total net cash flows from financing activities (123) (108)
Net increase in cash and cash equivalents 203 89
Cash and cash equivalents at the beginning of the year 1,949 1,859
Effect of exchange rate changes on cash and cash equivalents - 1
Cash and cash equivalents at the end of the year 2,152 1,949
(1)The exchange rate movements passed to shareholders relate to foreign
exchange gains or losses that have arisen on dividend payments to JSE
shareholders. Further details are included within the consolidated statement
of changes in equity.
(2)The total interest paid of £19 million (2024: £20 million) includes
finance costs on borrowings and payment of interest on lease liabilities.
( )
Notes to the condensed consolidated financial statements
For the year ended 31 December 2025
General information
Quilter plc (the "Company", the "Parent Company"), a public limited company
incorporated in England and Wales and domiciled in the United Kingdom ("UK"),
together with its subsidiaries (collectively, the "Group") offers investment
and wealth management services, long-term savings and financial advice
primarily in the UK. Quilter plc is listed with a primary listing on the
London Stock Exchange ("LSE") and a secondary listing on the Johannesburg
Stock Exchange ("JSE").
The Company's registration number is 06404270. The address of the registered
office is Senator House, 85 Queen Victoria Street, London, EC4V 4AB.
1: Basis of preparation
The results in this preliminary announcement have been taken from the Group's
2025 Annual report which will be available on the Company's website on 17
March 2026. These condensed consolidated financial statements of Quilter plc
for the year ended 31 December 2025 have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
These condensed consolidated financial statements have been prepared on a
historical cost basis, except for the revaluation of certain financial
instruments which are held at fair value, and are presented in pounds
sterling, which is the currency of the primary economic environment in which
the Group operates.
Going concern
The Directors have considered the resilience of the Group, its current
financial position, the principal risks facing the business and the
effectiveness of any mitigating strategies which are or could be applied. This
included an assessment of capital and liquidity over a three-year business
planning period covering 2026 to 2028. This assessment incorporated a number
of stress tests covering a broad range of severe but plausible adverse
scenarios, including economic and market shocks of up to 40% falls in equity
markets, mass lapse events, new business growth scenarios and severe business
interruption, equivalent to one in every 50 and one in every 200-year events.
As part of the going concern assessment, the Group took into consideration the
current position of the UK and global economy. The Group also considered how
climate-related risks and opportunities affect operations, investment
activities, advice and distribution, and their impact on specific projects and
initiatives, estimates and judgements. Based on the assessment, the Directors
believe that both the Group and Quilter plc have sufficient financial
resources to continue in business for a period of at least 12 months from the
date of approval of these financial statements and continue to adopt the going
concern basis in preparing the Group and Parent Company financial statements.
Further information is contained in the viability statement and going concern
section of the Annual Report.
Liquidity analysis of the statement of financial position
The Group's statement of financial position is in order of liquidity. For each
asset and liability line item, those amounts expected to be recovered or
settled more than 12 months after the reporting date are disclosed separately
in the notes to the condensed consolidated financial statements.
Critical accounting estimates and judgements
The preparation of financial statements requires management to exercise
judgement in applying the Group's material accounting policies and make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements. The Board Audit Committee
reviews these areas of judgement and estimates, and the appropriateness of
material accounting policies adopted in the preparation of these financial
statements.
The Group's critical accounting judgements and estimates are detailed below:
Critical accounting judgements
The Group's critical accounting judgements are those made when applying its
material accounting policies and that have the greatest effect on the net
profit and net assets recognised in the Group's financial statements. There
are no critical accounting judgements that have a significant impact on these
financial statements.
Critical accounting estimates
The Group's critical accounting estimates involve the most complex or
subjective assessments and assumptions, which have a significant risk of
resulting in material adjustment to the net carrying amounts of assets and
liabilities until those amounts are settled. Management uses its knowledge of
current facts and circumstances and applies estimation and assumption setting
techniques, that are aligned with relevant actuarial and accounting standards
and guidance, to make predictions about future actions and events. Actual
results may differ materially from those estimates.
Ongoing Advice Review
As previously announced in March 2024, the Group committed to undertake a
review of historical data and practices across the Appointed Representative
firms in the Quilter Financial Planning network in relation to the provision
of ongoing advice. Following discussion with the FCA, a Skilled Person was
appointed in June 2024 to assess and provide a view to the FCA on whether the
delivery of ongoing advice services by Appointed Representative firms in the
Quilter Financial Planning network had been compliant with applicable
regulatory requirements during the period from 1 January 2017 to 31 December
2023. Based on the results of the Skilled Person Review, together with other
evidence available at the time the Group's 2024 financial statements were
approved, the Group recognised a provision for a reasonable estimate of the
costs of a customer remediation exercise at 31 December 2024, including both
redress and administrative costs. This was based upon assumptions at the time
as to a plausible customer remediation approach that may be followed.
The Skilled Person Review was finalised, and the final report submitted to the
FCA during the first half of 2025, with no major differences in results noted
from those used to recognise a provision at 31 December 2024. Accordingly, a
Customer Remediation Strategy in relation to ongoing advice was developed by
the Group, in consultation with management's external experts and remains
ongoing. The remediation exercise is risk-based and will consider cases where
the customer has been charged for ongoing advice services, and the adviser is
unable to satisfactorily evidence the provision of those services. The
remediation exercise will involve the population of customers who are at the
highest likelihood of having not received the expected level of service from
their adviser, based upon the results of the Skilled Person Review, together
with other evidence available. The Group has revised the estimated costs from
the costs previously recognised within the provision. The value of the
provision at 31 December 2025 takes account of the latest estimates for:
· refunds of fees previously charged for the population of
customers included within the review;
· interest payable, which has been updated to align to the latest
Financial Ombudsmen Service interest payment policy; and
· the costs of carrying out the remediation exercise.
Further information on the provision including information about the
assumptions made and the uncertainties arising is contained in note 16.
The significant estimates in the calculation of the provision are:
· extrapolation of the proportion of the sample where satisfactory
evidence of servicing was not found following an initial internal review, to
the entire population of ongoing advice customers;
· response rate for customers invited to engage in the remediation
exercise; and
· administrative costs to perform the remediation exercise,
including costs associated with customer engagement and case reviews, which
have been determined based upon experience from the project to date, and
assumptions on the time period to complete the review process.
2: New standards, amendments to standards, and interpretations adopted by the
Group
The amendments to accounting standards in the table below became applicable
for the current reporting period, with no material impact on the Group's
results, financial position or disclosures.
Adopted by the Group from Amendments to standards
1 January 2025 Amendments to IAS 21 Lack of Exchangeability
3: Significant changes in the year
Except for the matters disclosed in the notes to these condensed consolidated
financial statements there are no significant changes in the current reporting
period to be disclosed.
4: Business combinations, acquisitions and disposals
Acquisitions
The Group made two acquisitions during the year to 31 December 2025.
MediFintech Ltd, 1 April 2025
On 1 April 2025, Quilter acquired 100% of the share capital of MediFintech
Ltd, a company that provides detailed NHS pension reports, technical support
and analysis to NHS pension members, for a total consideration of £5 million.
£2 million was paid on acquisition and a further estimated £3 million is
deferred consideration payable in stages on the first, second, third and
fourth anniversary dates post completion dependent on business performance.
The Group has carried out an assessment of control and concluded that it has
control of this entity and accordingly MediFintech Ltd's results are included
in the Group's financial statements from 1 April 2025.
Digby Associates Limited, 3 April 2025
On 3 April 2025, the Group acquired 30% of the share capital of Digby
Associates Limited for £3 million. The Group has carried out an assessment of
control and influence and concluded that it has significant influence but not
control of this entity. It therefore accounts for the holding as an investment
in associate and accounts for its share of the post-tax profits or losses of
Digby Associates Limited using the equity method of accounting. Subject to
certain terms being met, the Group intends to acquire the remaining share
capital of Digby Associates Limited in 2027.
Acquisitions in the prior year
There were two acquisitions during the year ended 31 December 2024. On 5
September 2024, Quilter acquired 100% of the share capital of Quilter Invest
Limited (formerly NuWealth Limited) for a total consideration of £6 million.
On 29 October 2024, the Group acquired 35% of the share capital of Beals
Mortgage and Financial Services Limited, and 9.4% of the share capital of its
subsidiary, Clinton Kennard Associates Ltd.
Disposals
There were no material disposals of businesses during the current year or the
prior year.
5: Alternative performance measures
5(a): Adjusted profit before tax and reconciliation to profit after
tax
Basis of preparation of adjusted profit before tax
Adjusted profit before tax is one of the Group's alternative performance
measures ("APMs") and represents the Group's IFRS results, adjusted for
specific items that management considers to be outside of the Group's normal
operations or one-off in nature, as detailed in note 5(b). Adjusted profit
before tax does not provide a complete picture of the Group's financial
performance, which is disclosed in the consolidated statement of comprehensive
income, but is instead intended to provide additional comparability and
understanding of the financial results.
£m
Notes Year ended Year ended
31 December 31 December
2025 2024
Affluent 169 148
High Net Worth 47 48
Head Office (9) -
Adjusted profit before tax 6(b) 207 196
Adjusting items:
Impact of acquisition and disposal-related accounting 5(b)(i) (17) (40)
Business transformation costs 5(b)(ii) (31) (26)
Skilled Person Review 5(b)(iii) - (10)
Customer remediation exercise 5(b)(iv) 20 (76)
Other customer remediation 5(b)(v) - 3
Exchange rate movements (ZAR/GBP) 5(b)(vi) - 1
Policyholder tax adjustments 5(b)(vii) 2 (90)
Finance costs 5(b)(viii) (18) (18)
Total adjusting items before tax (44) (256)
Profit/(loss) before tax attributable to shareholder returns 163 (60)
Income tax attributable to policyholder returns 7 161 95
IFRS profit before tax 324 35
Income tax expense 7 (204) (69)
IFRS profit/(loss) after tax 120 (34)
5(b): Adjusting items
The adjustments made to the Group's IFRS profit before tax to calculate
adjusted profit before tax are detailed below.
5(b)(i): Impact of acquisition and disposal-related accounting
The Group excludes any impairment of goodwill from adjusted profit as well as
the amortisation and impairment of acquired intangible assets, finance costs
related to the discounting of contingent consideration and incidental items
relating to past disposals.
The effect of these adjustments to determine adjusted profit are summarised
below.
£m
Year ended Year ended
31 December 31 December
2025 2024
Amortisation of acquired intangible assets 14 38
Amortisation of acquired adviser schemes 3 2
Total impact of acquisition and disposal-related accounting 17 40
5(b)(ii): Business transformation costs
In 2025, business transformation costs totalled £31 million (2024: £26
million), the principal components of which are described below:
Business Simplification costs - 2025: £30 million, 2024: £24 million
During 2025, the Group achieved its target to deliver £50 million of
annualised cost savings as part of the Business Simplification programme.
Further modest implementation costs are expected during 2026 to complete the
Advice and Wealth Transformation Programmes and for the final closure costs
for Business Simplification.
Investment in business costs - 2025: £1 million, 2024: £2 million
Investment in business costs of £1 million (2024: £2 million) were incurred
as the Group continues to enable and support advisers and customers and
improve productivity through better utilisation of technology. This cost was
excluded from adjusted profit as management considered it to be outside of the
Group's normal operations and one-off in nature.
5(b)(iii): Skilled Person Review
During 2025, there were no Skilled Person Review costs (2024: £10 million).
Prior year costs included external costs and direct costs of internal
resources to support and perform the Skilled Person Review of historical data
and practices across the Quilter Financial Planning network of Appointed
Representative firms. This cost was excluded from adjusted profit as
management considered it to be outside of the Group's normal operations and
one-off in nature.
5(b)(iv): Customer remediation exercise
For 2025, a customer remediation credit has been recognised of £20 million
(2024: cost of £76 million). The current year credit represents a £22
million reduction in the customer remediation exercise provision due to
changes made to reflect current view of expected experience, partially offset
by a cost of £2 million for the unwinding of discounting. The assumptions
used to determine the value of the customer remediation provision include the
proportion of customers within the scope of the review and the interest rates
on redress payable which are aligned to the updated Financial Ombudsmen
Service policy. Both of these have resulted in a decrease of the total amount
of costs that are anticipated to be incurred as part of the customer
remediation exercise. The unwinding of discounting reflects the passage of
time since 31 December 2024 when calculating the present value of future costs
for the purposes of determining the value of the provision as at 31 December
2025. See note 16 for further detail. Charges and credits relating to the
customer remediation exercise are excluded from adjusted profit as management
considers the exercise to be outside of the Group's normal operations and
one-off in nature.
5(b)(v): Other customer remediation
Lighthouse pension transfer advice provision - 2025: £nil, 2024: £3 million
credit
For 2024, a credit of £3 million related to a non-British Steel Pension
Scheme redress provision release as a result of the changes in assumptions
used to perform the calculations and market movements of the pension scheme
values during 2024. For 2025, there were no movements on this provision that
impacted adjusted profit. Further details of the provision are provided in
note 16.
5(b)(vi): Exchange rate movements (ZAR/GBP)
During 2025, there was no income or cost recognised (2024: £1 million income)
due to foreign exchange movements on cash held in South African Rand in
preparation for payments of dividends to shareholders. Cash was converted to
South African Rand upon announcement of the dividend payments to provide an
economic hedge for the Group. The foreign exchange movements in 2024 were
fully offset by an equal amount taken directly to retained earnings.
5(b)(vii): Policyholder tax adjustments
For 2025, the total amount of policyholder tax adjustments to adjusted profit
is a charge of £2 million (2024: £90 million credit). Adjustments to
policyholder tax are made to remove distortions due to the recognition of the
income received from policyholders to fund the policyholder tax liability
(which is included within the Group's income) which may vary in timing to the
recognition of the corresponding tax expense, creating volatility in the
Group's IFRS profit or loss before tax.
The Group made changes to the unit pricing policy relating to policyholder tax
charges in 2024. As expected, this has significantly reduced the volatility in
these timing differences, and in turn, the value of the policyholder tax
adjustments in 2025.
5(b)(viii): Finance costs
The nature of much of the Group's operations means that, for management's
decision-making and internal performance management, the effects of interest
costs on subordinated debt are removed when calculating adjusted profit. For
2025, finance costs were £18 million (2024: £18 million).
5(c): Reconciliation of IFRS income and expenses to "Total net revenue" and
"Operating expenses" within adjusted profit
This reconciliation shows how each line of the Group's IFRS income and
expenses are allocated to the Group's APMs: Net management fees, Other
revenue, Investment revenue, Total net revenue and Operating expenses, which
form the Group's adjusted profit before tax. The total column in the table
below, down to "Profit before tax attributable to shareholder returns",
reconciles to each line of the consolidated statement of comprehensive income.
Allocations are determined by management and aim to show the Group's sources
of profit (net of relevant directly attributable expenses). These allocations
remain consistent from year to year to ensure comparability, unless otherwise
stated.
£m
Year ended 31 December 2025 Net mgmt. fees(1) Other revenue(1) Investment revenue(1) Total net revenue(1) Operating expenses(1) Adjusted profit before tax Consol. of funds(2) Total
Income
Fee income and other income from service activities 739 92 - 831 - 831 (98) 733
Investment return(3) 49 7,120 73 7,242 2 7,244 1,363 8,607
Other income - 1 - 1 20 21 3 24
Total income 788 7,213 73 8,074 22 8,096 1,268 9,364
Expenses
Investment contract claims benefits - (1) - (1) - (1) - (1)
Change in investment contract liabilities(3) (19) (7,116) (10) (7,145) - (7,145) - (7,145)
Fee and commission expenses and other acquisition costs (52) 3 - (49) (2) (51) - (51)
Change in third-party interests in consolidated funds - - - - - - (1,223) (1,223)
Other operating and administrative expenses (16) - - (16) (539) (555) (45) (600)
Finance costs - - - - (21) (21) - (21)
Total expenses (87) (7,114) (10) (7,211) (562) (7,773) (1,268) (9,041)
Share of profit after tax of associates - 1 - 1 - 1 - 1
Profit before tax 701 100 63 864 (540) 324 - 324
Income tax expense attributable to policyholder returns (161) - - (161) - (161) - (161)
Profit before tax attributable to shareholder returns 540 100 63 703 (540) 163 - 163
Adjusting items:
Impact of acquisition and disposal-related accounting - - - - 17 17
Business transformation costs - - - - 31 31
Customer remediation exercise - - - - (20) (20)
Policyholder tax adjustments (2) - - (2) - (2)
Finance costs - - - - 18 18
Adjusting items (2) - - (2) 46 44
Adjusted profit before tax 538 100 63 701 (494) 207
(1)The APMs "Net management fees", "Other revenue", "Investment revenue",
"Total net revenue" and "Operating expenses" are commented on within the
Financial review.
(2)Consolidation of funds shows the grossing up impact to the Group's profit
or loss as a result of the consolidation of funds requirements. This grossing
up is excluded from the Group's adjusted profit.
(3)Reported within net management fees, investment return of £49 million
represents £28 million interest income on investments held for the benefit of
policyholders and £21 million net interest income on client money balances.
Change in investment contract liabilities of £19 million represents the
amount of interest income paid to policyholders. The net balance of £30
million represents interest income on customer balances retained by the Group
for 2025. The £73 million investment return less £10 million change in
investment contract liabilities paid to customers on transactional cash
balances, as reported within investment revenue, represents £63 million of
net interest income on shareholder cash and cash equivalents.
£m
Year ended 31 December 2024 Net mgmt. fees(1) Other revenue(1) Investment revenue(1) Total net revenue(1) Operating expenses(1) Adjusted profit before tax Consol. of funds(2) Total
Income
Fee income and other income from service activities 541 87 - 628 - 628 (84) 544
Investment return(3) 57 4,037 78 4,172 - 4,172 705 4,877
Other income - 3 - 3 21 24 4 28
Total income 598 4,127 78 4,803 21 4,824 625 5,449
Expenses
Change in investment contract liabilities(3) (26) (4,032) (7) (4,065) - (4,065) - (4,065)
Fee and commission expenses, and other acquisition costs (50) 3 - (47) (1) (48) (1) (49)
Change in third-party interests in consolidated funds - - - - - - (587) (587)
Other operating and administrative expenses (15) - - (15) (639) (654) (37) (691)
Finance costs - - - - (21) (21) - (21)
Total expenses (91) (4,029) (7) (4,127) (661) (4,788) (625) (5,413)
Impairment of investments in associates - - - - (1) (1) - (1)
Profit before tax 507 98 71 676 (641) 35 - 35
Income tax expense attributable to policyholder returns (95) - - (95) - (95) - (95)
Loss before tax attributable to shareholder returns 412 98 71 581 (641) (60) - (60)
Adjusting items:
Impact of acquisition and disposal-related accounting - - - - 40 40
Business transformation costs - - - - 26 26
Skilled Person Review - - - - 10 10
Customer remediation exercise - - - - 76 76
Other customer remediation - - - - (3) (3)
Exchange rate movements (ZAR/GBP) - (1) - (1) - (1)
Policyholder tax adjustments 90 - - 90 - 90
Finance costs - - - - 18 18
Adjusting items 90 (1) - 89 167 256
Adjusted profit before tax 502 97 71 670 (474) 196
(1)The APMs "Net management fees", "Other revenue", "Investment revenue",
"Total net revenue" and "Operating expenses" are commented on within the
Financial review.
(2)Consolidation of funds shows the grossing up impact to the Group's profit
or loss as a result of the consolidation of funds requirements. This grossing
up is excluded from the Group's adjusted profit.
(3)Reported within net management fees, investment return of £57 million
represents £36 million interest income on investments held for the benefit of
policyholders and £21 million net interest income on client money balances.
Change in investment contract liabilities of £26 million represents the
amount of interest income paid to policyholders. The net balance of £31
million represents interest income on customer balances retained by the Group
for 2024. The £78 million investment return less £7 million change in
investment contract liabilities paid to customers on transactional cash
balances, as reported within investment revenue, represents £71 million of
net interest income on shareholder cash and cash equivalents.
6: Segment information
6(a): Segment presentation
The Group has two operating segments: High Net Worth and Affluent. The
segments used for reporting purposes are consistent with the structure and
management of the Group. Head Office includes certain revenues and central
costs that are not allocated to the segments.
Adjusted profit before tax is an APM reported to the Group's management and
the Board of Quilter plc. The segment information in this note reflects the
adjusted and IFRS profit measures for each operating segment as provided to
management and the Board. Management and the Board use additional performance
indicators to assess the performance of each of the segments, including net
inflows, assets under management and administration, total net revenue and
operating margin. Income is analysed in further detail for each operating
segment in note 6(b).
Consistent with internal reporting, income and expenses that are not directly
attributable to a particular segment are allocated between segments where
appropriate. The Group accounts for inter-segment income and transfers as if
the transactions were with third parties at current market prices.
High Net Worth
This segment comprises Quilter Cheviot and Quilter Cheviot Financial Planning.
Quilter Cheviot provides discretionary investment management, predominantly in
the United Kingdom, with bespoke investment portfolios tailored to the
individual needs of high net worth clients, charities, companies and
institutions through a network of branches in London and the regions.
Investment management services are also provided by operations in the Channel
Islands and Ireland.
Quilter Cheviot Financial Planning offers a restricted advice proposition to
high net worth clients.
Affluent
This segment comprises Quilter Investment Platform, Quilter Investors, Quilter
Financial Planning and Quilter Invest.
Quilter Investment Platform is a leading investment platform provider of
advice-based wealth management products and services in the UK, which serves
an affluent customer base through advised multi-channel distribution.
Quilter Investors is a leading provider of investment solutions in the UK
multi-asset market. It develops and manages investment solutions in the form
of funds for the Group and third-party customers. It has several fund ranges
which vary in breadth of underlying asset class. The investment management of
the Quilter Investors fund range has been delegated to Quilter Investment
Platform from 1 January 2025.
Quilter Financial Planning is a restricted and independent financial adviser
network providing mortgage and financial planning advice and financial
solutions for both individuals and businesses through a network of
intermediaries. It operates across all markets, from wealth management and
retirement planning advice through to dealing with property wealth and
personal and business protection needs.
Quilter Invest is the developer of a fintech platform through which customers
can build investment portfolios. The Quilter Invest platform provides access
to savings and investments and is particularly aimed at people starting to
invest who are looking for additional help and guidance, and who may choose to
work with a financial adviser later in their investment journey.
Head Office
In addition to the Group's two operating segments, Head Office comprises the
investment return on centrally held assets, central support function expenses,
central core structural borrowings and certain tax balances.
6(b): Adjusted profit statement - segment information
The table below presents the Group's operations split by operating segment,
reconciling IFRS profit or loss to adjusted profit before tax. The Total
column reconciles to the consolidated statement of comprehensive income.
£m
Operating segments
Year ended 31 December 2025 Notes Affluent High Head Office Consolidation adjustments(1) Total
Net
Worth
Income
Premium-based fees 69 21 - - 90
Fund-based fees 376 193 - (98) 471
Fixed fees 1 - - - 1
Other fee and commission income 171 - - - 171
Fee income and other income from service activities 617 214 - (98) 733
Investment return(2) 7,211 19 31 1,346 8,607
Other income 103 - - (79) 24
Segment income 7,931 233 31 1,169 9,364
Expenses
Investment contract claims benefits (1) - - - (1)
Change in investment contract liabilities(2) (7,145) - - - (7,145)
Fee and commission expenses and other acquisition costs (52) - - 1 (51)
Change in third-party interests in consolidated funds - - - (1,223) (1,223)
Other operating and administrative expenses (401) (203) (32) 36 (600)
Finance costs (3) - (35) 17 (21)
Segment expenses (7,602) (203) (67) (1,169) (9,041)
Share of profit after tax of associates 1 - - - 1
Profit/(loss) before tax 330 30 (36) - 324
Income tax expense attributable to policyholder returns (161) - - - (161)
Profit/(loss) before tax attributable to shareholder returns 169 30 (36) - 163
Adjusting items:
Impact of acquisition and disposal-related accounting 5(b)(i) 11 7 (1) - 17
Business transformation costs 5(b)(ii) 11 10 10 - 31
Customer remediation exercise 5(b)(iv) (20) - - - (20)
Policyholder tax adjustments 5(b)(vii) (2) - - - (2)
Finance costs 5(b)(viii) - - 18 - 18
Adjusting items before tax - 17 27 - 44
Adjusted profit/(loss) before tax 169 47 (9) - 207
(1)Consolidation adjustments comprise the elimination of inter-segment
transactions and the consolidation of investment funds.
(2)Investment return and change in investment contract liabilities includes
net £30 million of interest income on customer cash and cash equivalents
retained by the Group. Investment return total also includes £63 million of
interest income on shareholder cash and cash equivalents, comprising -
Affluent: £30 million, High Net Worth: £6 million, and Head Office: £27
million.
£m
Operating segments
Year ended 31 December 2024 Notes Affluent High Head Office Consolidation adjustments(1) Total
Net
Worth
Income
Premium-based fees 70 19 - - 89
Fund-based fees 343 184 - (83) 444
Fixed fees 1 - - - 1
Other fee and commission income 10 - - - 10
Fee income and other income from service activities 424 203 - (83) 544
Investment return(2) 4,131 21 31 694 4,877
Other income 98 2 1 (73) 28
Segment income 4,653 226 32 538 5,449
Expenses
Change in investment contract liabilities(2) (4,065) - - - (4,065)
Fee and commission expenses, and other acquisition costs (49) - - - (49)
Change in third-party interests in consolidated funds - - - (587) (587)
Other operating and administrative expenses (484) (217) (29) 39 (691)
Finance costs (2) - (29) 10 (21)
Segment expenses (4,600) (217) (58) (538) (5,413)
Impairment of investment in associates - - (1) - (1)
Profit/(loss) before tax 53 9 (27) - 35
Income tax expense attributable to policyholder returns (95) - - - (95)
(Loss)/profit before tax attributable to shareholder returns (42) 9 (27) - (60)
Adjusting items:
Impact of acquisition and disposal-related accounting 5(b)(i) 9 31 - - 40
Business transformation costs 5(b)(ii) 8 8 10 - 26
Skilled Person Review 5(b)(iii) 10 - - - 10
Customer remediation exercise 5(b)(iv) 76 - - - 76
Other customer remediation 5(b)(v) (3) - - - (3)
Exchange rate movements (ZAR/GBP) 5(b)(vi) - - (1) - (1)
Policyholder tax adjustments 5(b)(vii) 90 - - - 90
Finance costs 5(b)(viii) - - 18 - 18
Adjusting items before tax 190 39 27 - 256
Adjusted profit before tax 148 48 - - 196
(1)Consolidation adjustments comprise the elimination of inter-segment
transactions and the consolidation of investment funds.
(2)Investment return and change in investment contract liabilities includes
net £31 million of interest income on customer cash and cash equivalents
retained by the Group. Investment return total also includes £71 million of
interest income on shareholder cash and cash equivalents, comprising -
Affluent: £36 million, High Net Worth: £7 million, and Head Office: £28
million.
7: Tax
7(a): Tax charged
£m
Year ended Year ended
31 December 31 December
2025 2024
Current tax
United Kingdom 91 67
Overseas tax 2 1
Adjustments to current tax in respect of prior years (2) (10)
Total current tax charge 91 58
Deferred tax
Origination and reversal of temporary differences 111 3
Adjustments to deferred tax in respect of prior years 2 8
Total deferred tax charge 113 11
Total tax charged 204 69
Attributable to policyholder returns 161 95
Attributable to shareholder returns 43 (26)
Total tax charged 204 69
Change in tax rate
As part of the UK Government's Autumn Budget delivered in November 2025, the
Chancellor announced an increase in the future policyholder tax rate from 20%
to 22%. The revised rate will apply from April 2027, subject to enactment of
the relevant Finance Bill provisions. As the rate change was not substantively
enacted by 31 December 2025, the new rate has not been used in recognising the
Group's deferred tax assets and liabilities should the temporary difference
reverse after 1 April 2027. Once the rate change is substantively enacted, the
policyholder deferred tax liability will increase by approximately £14
million. The future increase in policyholder tax charge is economically borne
by the policyholder through the unit pricing of their product.
There has been no change in the shareholder tax rate which remains 25% (2024:
25%).
Policyholder tax
Certain products are subject to tax on policyholders' investment returns. This
"policyholder tax" is an element of total tax expense. To make the tax expense
more meaningful, tax attributable to policyholder returns and tax attributable
to shareholder returns are shown separately in the consolidated statement of
comprehensive income.
The tax attributable to policyholder returns is the amount payable in the year
plus the movement of amounts expected to be payable in future years. The
remainder of the tax expense is attributed to shareholder returns.
The Group's income tax charge was £204 million in 2025 (2024: £69 million
tax charge). The income tax charge can vary significantly year-on-year because
of market volatility and the impact this has on policyholder tax.
The recognition of the income received from policyholders to fund the
policyholder tax liability (which is included within the Group's income) has
historically been volatile due to timing differences between the recognition
of policy deductions and credits and the corresponding policyholder tax
expense, resulting in the need for significant adjustments to the adjusted
profit to remove these distortions. The Group made changes to the Group's unit
pricing policy at the end of 2024 relating to policyholder tax charges which
has reduced volatility in these timing differences.
Market movements for the year ended 31 December 2025 resulted in investment
gains of £756 million on products subject to policyholder tax. The gain is a
component of the total "investment return" gain of £8,607 million shown in
the consolidated statement of comprehensive income. The tax impact of the
£756 million investment return gain is a significant element of the £161
million tax charge attributable to policyholder returns in 2025 (2024: £95
million charge).
Pillar II taxes
Pillar II legislation is applicable in the UK, establishing a Pillar II
minimum effective tax rate of 15%. The legislation implements a Multinational
Top-up Tax ("MTT") and a Domestic Top-up Tax ("DTT").
The Group has applied the exemption under IAS 12.4A and accordingly will not
recognise or disclose information about deferred tax assets and liabilities
related to Pillar II income taxes.
The scope of the MTT means that a top-up tax charge may also arise in the UK
on profits earned in countries with lower tax rates in which the Group
operates, subject to a local qualifying domestic minimum tax. There is no MTT
due in the UK in 2025 as all overseas operations have minimum effective tax
rates of 15%.
The Group's main non-UK operations are in Jersey and Ireland. In 2025, the
effective corporation tax rates in both Ireland and Jersey are above 15%,
therefore no Pillar II tax liability is due for 2025 (2024: liability of
£136,282 in relation to Jersey).
The Isle of Man introduced a qualifying domestic top-up tax from accounting
periods beginning on or after 1 January 2025, resulting in a Pillar II tax
liability of £114,215.
The Group has assessed that there are no material Pillar II tax charges in any
other countries in which it had a presence during 2024 or 2025.
7(b): Reconciliation of total income tax expense
The income tax credited or charged to profit or loss differs from the amount
that would apply if all of the Group's profits from all the countries in which
the Group operates had been taxed at the UK standard Corporation Tax rate. The
difference in the effective rate is explained below:
£m
Year ended Year ended
31 December 31 December
2025 2024
Profit before tax 324 35
Tax at UK standard rate of 25% (2024: 25%) 82 9
Untaxed and low taxed income (1) (1)
Expenses not deductible for tax purposes 1 1
Adjustments to current tax in respect of prior years (2) (10)
Net movements on unrecognised deferred tax assets - (10)
Adjustments to deferred tax in respect of prior years 2 8
Income tax attributable to policyholder returns (net of tax relief) 122 72
Total tax charged to profit or loss 204 69
7(c): Reconciliation of IFRS income tax credit or expense to income tax on
adjusted profit
£m
Note Year ended Year ended
31 December 31 December
2025 2024
Income tax expense(1) 204 69
Tax on adjusting items
Impact of acquisition and disposal-related accounting 4 10
Business transformation costs 8 7
Skilled Person Review - 2
Customer remediation exercise (6) 19
Other customer remediation - (1)
Finance costs 4 4
Tax adjusting items
Policyholder tax adjustments 5(b)(vii) 2 (90)
Other shareholder tax adjustments(2) - 33
Tax on adjusting items 12 (16)
Less: tax attributable to policyholder returns within adjusted profit(3) (163) (5)
Tax charged on total adjusted profit 53 48
(1)Includes both tax attributable to policyholder and shareholder returns, in
compliance with IFRS.
(2)Other shareholder tax adjustments comprise the reallocation of adjustments
from policyholder tax as explained in note 5(b)(vii) and shareholder tax
adjustments for one‑off items in line with the Group's adjusted profit
policy.
(3)Adjusted profit treats policyholder tax as a pre-tax expense (this includes
policyholder tax under IFRS and the policyholder tax adjustments) and is
therefore removed from the tax charge on adjusted profit.
8: Earnings per share
The Group calculates earnings per share ("EPS") on a number of different
bases. IFRS requires the calculation of basic and diluted EPS. Adjusted EPS
reflects earnings that are consistent with the Group's adjusted profit measure
and Headline earnings per share ("HEPS") is a requirement of the Johannesburg
Stock Exchange.
8(a): Weighted average number of Ordinary Shares
The table below summarises the calculation of the weighted average number of Ordinary Shares for the purposes of calculating basic and diluted earnings per share for each profit measure (IFRS, adjusted profit and Headline earnings).
Million
Year ended Year ended
31 December 31 December
2025 2024
Weighted average number of Ordinary Shares 1,404 1,404
Own shares including those held in consolidated funds and employee benefit (52) (60)
trusts
Basic weighted average number of Ordinary Shares 1,352 1,344
Adjustment for dilutive share awards and options 43 48
Diluted weighted average number of Ordinary Shares 1,395 1,392
8(b): Basic and diluted EPS (IFRS and adjusted profit)
£m
Notes Year ended Year ended
31 December 31 December
2025 2024
Profit/(loss) after tax 120 (34)
Total adjusting items before tax 5(a) 44 256
Tax on adjusting items 7(c) (12) 16
Less: policyholder tax adjustments 7(c) 2 (90)
Adjusted profit after tax 154 148
Pence
Post-tax profit Year ended Year ended
measure used 31 December 31 December
2025 2024
Basic EPS IFRS profit 8.9 (2.5)
Diluted EPS IFRS profit 8.6 (2.5)
Adjusted basic EPS Adjusted profit 11.4 11.0
Adjusted diluted EPS Adjusted profit 11.0 10.6
8(c): Headline earnings per share
+ + £m
Year ended 31 December 2025 Year ended 31 December 2024
Gross Net of tax Gross Net of tax
Profit/(loss) 120 (34)
Adjusted for:
- add back impairment of investments in associates - - 1 1
- add back loss on disposal of property, plant and equipment 1 1 - -
Headline earnings 121 (33)
Headline basic EPS (pence) 8.9 (2.5)
Headline diluted EPS (pence) 8.7 (2.5)
9: Goodwill and intangible assets
9(a): Analysis of goodwill and intangible assets
The table below shows the movements in cost and amortisation of goodwill and
intangible assets.
£m
Goodwill Software Other intangible assets(3) Total
Gross amount
1 January 2024 306 9 425 740
Acquisitions through business combinations(1) 1 7 - 8
31 December 2024 307 16 425 748
Acquisitions through business combinations(2) 1 4 - 5
31 December 2025 308 20 425 753
Accumulated amortisation and impairment losses
1 January 2024 - (5) (363) (368)
Acquisitions through business combinations(1) - (1) - (1)
Amortisation charge for the year - (2) (38) (40)
31 December 2024 - (8) (401) (409)
Amortisation charge for the year - (4) (12) (16)
31 December 2025 - (12) (413) (425)
Carrying amount
31 December 2024 307 8 24 339
31 December 2025 308 8 12 328
(1)Relates to the acquisition of Quilter Invest Limited as explained in note
4. Total gross amount includes £1 million goodwill and £7 million software,
which consists of £2 million of Quilter Invest Limited's net assets and £5
million recognised by the Group on acquisition of the business. Total
accumulated amortisation of £1 million relates to software in Quilter Invest
Limited's net assets.
(2)Relates to the acquisition of MediFintech Limited as explained in note 4.
Total gross amount includes £1 million goodwill within MediFintech Limited's
net assets and £4 million recognised by the Group on acquisition of the
business.
(3)Assets related to customer relationships with a cost of £340 million and
an accumulated amortisation of £340 million (net book value: £nil) continue
to be included within the total gross amount and total accumulated
amortisation amount as at 31 December 2025 as the Group continues to benefit
from this customer relationship base.
9(b): Analysis of software and other intangible assets
31 December 2025 31 December 2024 Average estimated useful life Average period remaining
£m £m
Net carrying value
Software
Quilter Invest - fintech platform 5 6 5 years 4 years
MediFintech - report writing software 3 - 5 years 4 years
Quilter Financial Planning - operating software - 2 5 years -
8 8
Other intangible assets
Distribution channels - Quilter Financial Planning - 1 8 years -
Customer relationships
Quilter Cheviot - 4 10 years -
Quilter Financial Planning 7 12 8 years 1 year
Quilter Cheviot Financial Planning 5 7 8 years 1 year
12 24
Total software and other intangible assets 20 32
9(c): Allocation of goodwill to cash-generating units ("CGUs") and
consideration of the need for an impairment review
Goodwill is monitored by management at the level of the Group's two operating
segments: Affluent and High Net Worth. Both operating segments represent a
group of CGUs.
£m
31 December 31 December
2025 2024
Goodwill (net carrying amount)
Affluent 225 224
High Net Worth 83 83
Total goodwill 308 307
Consideration of the need for an impairment review
Goodwill in both the Affluent and High Net Worth CGU groups is tested for
impairment annually, or earlier if an indicator of impairment exists, by
comparing the carrying value of the CGU group to which the goodwill relates to
the recoverable value of that CGU group, being the higher of that CGU group's
value-in-use or fair value less costs to sell. If applicable, an impairment
charge is recognised when the recoverable amount is less than the carrying
value. Goodwill impairment indicators include sudden stock market falls, the
absence of net inflows, significant falls in profits and significant increases
in the discount rate.
The goodwill balance has been tested for impairment at 31 December 2025 and
continues to demonstrate a surplus of the recoverable amount over the carrying
value of the CGUs. As a result, no impairment is required.
The following table shows the percentage change required in each key
assumption before the carrying value would exceed the recoverable amount,
assuming all other variables remain the same. This highlights that further
adverse movements in the key assumptions used in the value-in-use calculation
would be required before an impairment would need to be recognised.
Affluent High Net Worth
Reduction in forecast cash flows 63% 86%
Percentage point increase in the discount rate 60% 70%
Forecast cash flows are impacted by movements in underlying assumptions,
including equity market levels, revenue margins and net flows. The Group
considers that forecast cash flows are most sensitive to movements in equity
markets because they have a direct impact on the level of the Group's fee
income.
The principal sensitivity within equity market level assumptions relates to
the estimated growth in equity market indices included in the three-year cash
flow forecasts. Management forecasts equity market growth for each business
using estimated asset-specific growth rates that are supported by internal
research, historical performance, Bank of England forecasts and other external
estimates.
The Group has considered and assessed reasonably possible changes for other
key assumptions and has not identified any other instances that could cause
the carrying amounts to exceed the recoverable amounts.
Value-in-use methodology
The cash flows used to determine the value in use of the groups of CGUs are
based on the most recent management approved three-year profit forecasts,
which are contained in the Group's Business Plan. These profit forecasts
incorporate anticipated equity market growth on the Group's future cash flows
and take into account climate-related risks and opportunities affecting
operations, investments, advice and distribution, and their impact on specific
projects and initiatives, estimates and judgements. After the three-year
forecast period, the growth rate used to determine the terminal value of the
groups of CGUs in the annual assessment was 2.0% (31 December 2024: 2.0%).
The Group uses a single cost of capital (post tax) of 11.7% (31 December 2024:
9.0%) to discount expected future cash flows across its two groups of CGUs.
The single cost of capital is based on the Group's consideration of the level
of risk that each group of CGUs represents. Capital is provided to the Group
predominantly by shareholders with a relatively small amount of debt
financing.
10: Financial investments
The table below analyses the investments and securities that the Group invests
in, either on its own proprietary behalf (shareholder funds) or on behalf of
third parties (policyholder funds).
£m
31 December 31 December
2025 2024
Government and government-guaranteed securities 264 171
Other debt securities, preference shares and debentures 3,515 2,644
Equity securities 9,716 11,034
Pooled investments 59,816 45,510
Fixed-term deposits treated as investments 50 -
Other 1 1
Total financial investments 73,362 59,360
The financial investments are recoverable within 12 months, apart from £7
million (2024: £6 million) which is recoverable after 12 months. The
financial investments recoverability profile is based on the intention with
which the financial assets are held. The assets held on behalf of
policyholders cover the liabilities for linked investment contracts, all of
which can be withdrawn by policyholders on demand.
11: Categories of financial instruments
The analysis of financial assets and liabilities into categories as defined in
IFRS 9 Financial Instruments is set out in the following tables. Assets and
liabilities of a non-financial nature, or financial assets and liabilities
that are specifically excluded from the scope of IFRS 9, are reflected in the
non‑financial assets and liabilities category.
For information about the methods and assumptions used in determining fair
value, refer to note 12. The Group's exposure to various risks associated with
financial instruments is discussed in note 18.
31 December 2025
£m
Measurement basis Fair value
Mandatorily at FVTPL Designated at FVTPL Amortised cost Non-financial assets and liabilities Total
Assets
Loans and advances - - 44 - 44
Financial investments 73,311 1 50 - 73,362
Trade, other receivables and other assets - - 356 42 398
Derivative assets 24 - - - 24
Cash and cash equivalents 1,425 - 727 - 2,152
Total assets that include financial instruments 74,760 1 1,177 42 75,980
Total other non-financial assets - - - 562 562
Total assets 74,760 1 1,177 604 76,542
Liabilities
Investment contract liabilities - 64,493 - - 64,493
Third-party interests in consolidated funds 9,394 - - - 9,394
Borrowings and lease liabilities - - 271 - 271
Trade, other payables and other liabilities - 1 543 105 649
Derivative liabilities 24 - - - 24
Total liabilities that include financial instruments 9,418 64,494 814 105 74,831
Total other non-financial liabilities - - - 245 245
Total liabilities 9,418 64,494 814 350 75,076
31 December 2024
£m
Measurement basis Fair value
Mandatorily at FVTPL Designated at FVTPL Amortised cost Non-financial assets and liabilities Total
Assets
Loans and advances - - 56 - 56
Financial investments 59,359 1 - - 59,360
Trade, other receivables and other assets - - 370 48 418
Derivative assets 26 - - - 26
Cash and cash equivalents 1,215 - 734 - 1,949
Total assets that include financial instruments 60,600 1 1,160 48 61,809
Total other non-financial assets - - - 639 639
Total assets 60,600 1 1,160 687 62,448
Liabilities
Investment contract liabilities - 51,758 - - 51,758
Third-party interests in consolidated funds 8,225 - - - 8,225
Borrowings and lease liabilities - - 275 - 275
Trade, other payables and other liabilities - 1 399 106 506
Derivative liabilities 53 - - - 53
Total liabilities that include financial instruments 8,278 51,759 674 106 60,817
Total other non-financial liabilities - - - 208 208
Total liabilities 8,278 51,759 674 314 61,025
12: Fair value methodology
This section explains the judgements and estimates made in determining the
fair values of financial instruments that are recognised and measured at fair
value in the financial statements. Classifying financial instruments into the
three levels of the fair value hierarchy (see note 12(b)) provides an
indication of the reliability of inputs used in determining fair value.
12(a): Determination of fair value
The fair value of financial instruments that are actively traded in organised
financial markets is determined by reference to quoted market exit prices for
assets and offer prices for liabilities, at the close of business on the
reporting date, without any deduction for transaction costs:
· for units in unit trusts and shares in open-ended investment
companies, fair value is determined by reference to published quoted prices
representing exit values in an active market;
· for equity and debt securities not actively traded in organised
markets and where the price cannot be retrieved, the fair value is determined
by reference to similar instruments for which market observable prices exist;
· for assets that have been suspended from trading on an active
market, the last published price is used. Many suspended assets are still
regularly priced. At the reporting date, all suspended assets are assessed for
impairment; and
· where the assets are private equity investments or within
consolidated investment funds, the valuation is based on the latest available
set of audited financial statements, or if more recent is available, reports
from Investment Managers or professional valuation experts on the value of the
underlying assets of the private equity investment or fund.
There have been no significant changes in the valuation techniques applied
when valuing financial instruments. Where assets are valued by the Group, the
general principles applied to those instruments measured at fair value are
outlined below:
Financial investments
Financial investments include government and government-guaranteed securities,
listed and unlisted debt securities, preference shares and debentures, listed
and unlisted equity securities, listed and unlisted pooled investments (see
below), short-term funds and securities treated as investments and certain
other securities.
Pooled investments represent the Group's holdings of shares/units in
open-ended investment companies, unit trusts, mutual funds and similar
investment vehicles. Pooled investments are recognised at fair value. The fair
values of pooled investments are based on widely published prices that are
regularly updated.
Other financial investments that are measured at fair value use observable
market prices where available. In the absence of observable market prices,
these investments and securities are fair valued using various approaches
including valuations based on discounted cash flows and earnings before
interest, tax, depreciation and amortisation multiples.
Derivatives
The fair value of derivatives is determined with reference to the
exchange-traded prices of the specific instruments. The fair value of
over-the-counter forward foreign exchange contracts is determined by reference
to the relevant exchange rates.
Investment contract liabilities
The fair value of the investment contract liabilities is determined with
reference to the underlying funds that are held by the Group.
Third-party interests in consolidated funds
Third-party interests in consolidated funds are measured at the attributable
net asset value of each fund.
12(b): Fair value hierarchy
Fair values are determined according to the following hierarchy:
Description of hierarchy Types of instruments classified in the respective levels
Level 1 - quoted market prices: financial assets and liabilities with quoted Listed equity securities, government securities and other listed debt
prices for identical instruments in active markets. securities and similar instruments that are actively traded, actively traded
pooled investments, certain quoted derivative assets and liabilities and
investment contract liabilities directly linked to Level 1 financial assets.
Level 2 - valuation techniques using observable inputs: financial assets and Unlisted equity and debt securities where the valuation is based on models
liabilities with quoted prices for similar instruments in active markets or involving no significant unobservable data.
quoted prices for identical or similar instruments in inactive markets and
financial assets and liabilities valued using models where all significant Over-the-counter derivatives, certain privately placed debt instruments and
inputs are observable. third-party interests in consolidated funds.
Level 3 - valuation techniques using significant unobservable inputs: Unlisted equity and securities with significant unobservable inputs,
financial assets and liabilities valued using valuation techniques where one securities where the market is not considered sufficiently active, including
or more significant inputs are unobservable. certain inactive pooled investments.
The judgement as to whether a market is active may include, for example,
consideration of factors such as the magnitude and frequency of trading
activity, the availability of prices and the size of bid/offer spreads. In
inactive markets, obtaining assurance that the transaction price provides
evidence of fair value or determining the adjustments to transaction prices
that are necessary to measure the fair value of the asset or liability
requires additional work during the valuation process.
The majority of valuation techniques employ only observable data and so the
reliability of the fair value measurement is high. Certain financial assets
and liabilities are valued on the basis of valuation techniques that feature
one or more significant inputs that are unobservable and, for them, the
derivation of fair value is more judgemental. A financial asset or liability
in its entirety is classified as valued using significant unobservable inputs
if a significant proportion of that asset or liability's carrying amount is
driven by unobservable inputs.
In this context, 'unobservable' means that there is little or no current
market data available from which to determine the price at which an arm's
length transaction would be likely to occur. It generally does not mean that
there is no market data available at all upon which to base a determination of
fair value. Furthermore, in some cases the majority of the fair value derived
from a valuation technique with significant unobservable data may be
attributable to observable inputs.
12(c): Transfer between fair value hierarchies
The Group deems a transfer to have occurred between Level 1 and Level 2 or
Level 3 when an actively traded primary market ceases to exist for that
financial instrument. A transfer between Level 2 and Level 3 occurs when one
or more of the significant inputs used to determine the fair value of the
instrument become unobservable. Transfers from Levels 3 or 2 to Level 1 are
also possible when assets become actively priced.
There were £nil transfers of financial investments between Level 1 and Level
2 during the year 2025 (31 December 2024: £nil).
See note 12(e) for the reconciliation of Level 3 financial instruments.
12(d): Financial assets and liabilities measured at fair value, classified according to the fair value hierarchy
The majority of the Group's financial assets are measured using quoted market
prices for identical instruments in active markets (Level 1) and there have
been no significant changes during the year.
Financial investments include linked assets that are held to cover the
liabilities for linked investment contracts which form part of the investment
contract liabilities balance. The difference between the value of linked
assets and that of linked liabilities is mainly due to short-term timing
differences between policyholder premiums being received and invested in
advance of policies being issued, and tax liabilities within funds which are
reflected within the Group's tax liabilities.
Differences between assets and liabilities within the respective levels of the
fair value hierarchy also arise due to the mix of underlying assets and
liabilities within consolidated funds. In addition, third-party interests in
consolidated funds are classified as Level 2.
The tables below analyse the Group's financial assets and liabilities measured
at fair value by the fair value hierarchy described in note 12(b).
£m
31 December 2025 Level 1 Level 2 Level 3 Total
Financial investments 62,183 11,108 21 73,312
Cash and cash equivalents 1,425 - - 1,425
Derivative assets - 24 - 24
Total financial assets measured at fair value through profit or loss 63,608 11,132 21 74,761
Third-party interests in consolidated funds - 9,394 - 9,394
Derivative liabilities - 24 - 24
Investment contract liabilities 64,473 - 20 64,493
Other liabilities - 1 - 1
Total financial liabilities measured at fair value through profit or loss 64,473 9,419 20 73,912
£m
31 December 2024 Level 1 Level 2 Level 3 Total
Financial investments 49,052 10,292 16 59,360
Cash and cash equivalents 1,215 - - 1,215
Derivative assets - 26 - 26
Total financial assets measured at fair value through profit or loss 50,267 10,318 16 60,601
Third-party interests in consolidated funds - 8,225 - 8,225
Derivative liabilities - 53 - 53
Investment contract liabilities 51,745 - 13 51,758
Other liabilities - 1 - 1
Total financial liabilities measured at fair value through profit or loss 51,745 8,279 13 60,037
12(e): Level 3 fair value hierarchy disclosure
The majority of the assets classified as Level 3 are held within linked
policyholder funds. Where this is the case, all of the investment risk
associated with these assets is borne by policyholders and the value of these
assets is exactly matched by a corresponding liability due to policyholders.
The Group bears no risk from a change in the market value of these assets
except to the extent that it has an impact on fees earned.
Level 3 assets also include investments within consolidated funds attributable
to the third-party interest in those funds. The Group bears no risk from a
change in the market value of these assets except to the extent that it has an
impact on fees earned. Any changes in market value are matched by a
corresponding change in the Level 2 liability for third-party interests in
consolidated funds.
The table below reconciles the opening balance of Level 3 financial assets to
the closing balance at each year end:
£m
2025 2024
Balance at 1 January 16 33
Fair value (losses)/gains (charged)/credited to profit or loss(1) (2) 4
Sales (2) (17)
Transfers in 14 8
Transfers out (5) (12)
Total Level 3 financial assets at the end of the year 21 16
Unrealised fair value losses recognised in profit or loss relating to assets (2) (3)
held at the year end
(1)Included in Investment return.
All of the assets that are classified as Level 3 are suspended funds for 2025
and 2024.
Transfers into Level 3 assets in the current year are mainly due to funds from
Level 1 being suspended and moved to Level 3. Suspended funds are valued based
on external valuation reports received from fund managers. Transfers out of
Level 3 assets result from a transfer to Level 1 assets relating to assets
that are now being actively repriced (that were previously stale) and where
fund suspensions have been lifted.
The table below reconciles the opening balance of Level 3 financial
liabilities to the closing balance at each year end:
£m
2025 2024
Balance at 1 January 13 24
Fair value gains credited to profit or loss(1) (2) (2)
Transfers in 14 -
Transfers out (5) (9)
Total Level 3 financial liabilities at the end of the year 20 13
Unrealised fair value losses recognised in profit or loss relating to (2) (2)
liabilities at the year end
(1)Included in Investment return.
12(f): Effect of changes in significant unobservable assumptions to reasonable
alternatives
Details of the valuation techniques applied to the different categories of
financial instruments can be found in note 12(a) above, including the
valuation techniques applied when significant unobservable assumptions are
used to value Level 3 assets.
For Level 3 assets and liabilities, no reasonable alternative assumptions are
applicable and the Group therefore performs a sensitivity test of an aggregate
10% change in the value of the financial asset or liability (2024: 10%),
representing a reasonable alternative judgement in the context of the current
macroeconomic environment in which the Group operates. It is therefore
considered that the impact of this sensitivity will be in the range of £2
million (2024: £2 million) to the reported fair value of Level 3 assets, and
£2 million (2024: £1 million) to the reported fair value of Level 3
liabilities, both favourable and unfavourable.
12(g): Fair value hierarchy for assets and liabilities not measured at fair
value
Certain financial instruments of the Group are not carried at fair value. The
carrying values of these are considered reasonable approximations of their
respective fair values as they are either short term in nature or are repriced
to current market rates at frequent intervals.
13: Cash and cash equivalents
13(a): Analysis of cash and cash equivalents
£m
31 December 31 December
2025 2024
Cash at bank 323 369
Money market funds 1,425 1,215
Cash and cash equivalents in consolidated funds 404 365
Total cash and cash equivalents per statement of cash flows 2,152 1,949
The Group's management does not consider that the cash and cash equivalents
balance arising due to consolidation of funds of £404 million (2024: £365
million) is available for use in the Group's day-to-day operations. The
remainder of the Group's cash and cash equivalents balance of £1,748 million
(2024: £1,584 million) is considered to be available for general use by the
Group for the purposes of the disclosures required under IAS 7 Statement of
Cash Flows. This balance includes policyholder cash as well as cash and cash
equivalents held by regulated subsidiaries to meet their capital and liquidity
requirements.
13(b): Analysis of net cash flows from operating activities:
£m
Notes Year ended Year ended
31 December 31 December
2025 2024
Cash flows from operating activities
Profit before tax 324 35
Adjustments for
Depreciation of property, plant and equipment 10 11
Depreciation of investment property 1 1
Loss on disposal of property, plant and equipment 1 -
Movement on contract costs (7) (8)
Amortisation of intangibles 16 40
Fair value and other movements in financial assets (6,972) (3,891)
Fair value movements in investment contract liabilities 15 6,072 3,153
Other changes in investment contract liabilities 6,663 5,209
Share of profit after tax of associates (1) -
Other movements 38 41
5,821 4,556
Net changes in working capital
(Increase)/decrease in derivatives (27) 59
Decrease/(increase) in loans and advances 12 (18)
(Decrease)/increase in provisions 16 (48) 65
Movement in other assets and other liabilities 157 (43)
94 63
Taxation paid (43) (69)
Net cash flows from operating activities 6,196 4,585
14: Ordinary Share capital
At 31 December 2025 and 31 December 2024, the Company's equity capital
comprises 1,404,105,498 Ordinary Shares of 8 1/6 pence each with an aggregated
nominal value of £114,668,616. All Ordinary Shares have been called up and
fully paid.
All Ordinary Shares issued carry equal voting rights. The holders of the
Company's Ordinary Shares are entitled to receive dividends as declared and
are entitled to one vote per share at shareholder meetings of the Company.
15: Investment contract liabilities
The following table provides a summary of the Group's investment contract
liabilities:
£m
2025 2024
Carrying amount at 1 January 51,758 43,396
Fair value movements 6,072 3,153
Investment income 1,073 912
Movements arising from investment return 7,145 4,065
Contributions received 10,372 8,222
Withdrawals and surrenders (4,470) (3,661)
Claims and benefits (302) (260)
Other movements (10) (4)
Change in liability 12,735 8,362
Investment contract liabilities at end of the year 64,493 51,758
For unit-linked investment contracts, movements in asset values are offset by
corresponding changes in liabilities, limiting the net impact on profit.
The benefits offered under the unit-linked investment contracts are based on
the risk appetite of policyholders and the return on their selected
investments and collective fund investments, whose underlying investments
include equities, debt securities, property and derivatives. This investment
mix is unique to each individual policyholder.
For unit-linked business, the unit liabilities are determined as the value of
units credited to policyholders. Since these liabilities are determined on a
retrospective basis, no assumptions for future experience are required.
Assumptions for future experience are required for unit-linked business in
assessing whether the total of the contract costs asset and contract liability
is greater than the present value of future profits expected to arise on the
relevant blocks of business (the "recoverability test"). If this is the case,
then the contract costs asset is restricted to the recoverable amount. For
linked contracts, the assumptions are on a best estimate basis.
16: Provisions
£m
Year ended 31 December 2025 Customer Compensation Sale of subsidiaries provision Property provisions Clawback and other provisions Total
remediation exercise provision provisions
Balance at 1 January 76 14 1 7 13 111
Charge to profit or loss - 2 - - 6 8
Used during the year (14) (3) - - (7) (24)
Unused amounts reversed (22) (11) (1) (1) - (35)
Reclassification within the statement of financial position - - - - 1 1
Unwind of discounting 2 - - - - 2
Balance at 31 December 2025 42 2 - 6 13 63
£m
Year ended 31 December 2024 Customer remediation exercise provision Compensation Sale of subsidiaries provision Property provisions Clawback and other provisions Total
provisions
Balance at 1 January - 17 3 10 16 46
Charge to profit or loss 76 10 - - 4 90
Used during the year - (5) (2) (2) (6) (15)
Unused amounts reversed - (8) - (1) (1) (10)
Balance at 31 December 2024 76 14 1 7 13 111
Customer remediation exercise provision
At 31 December 2025, the customer remediation exercise provision was £42
million (31 December 2024: £76 million).
At 31 December 2024, the Group recognised a provision of £76 million for a
customer remediation exercise following the review of the delivery of ongoing
advice services by the Appointed Representative firms in the Quilter Financial
Planning network. A reasonable estimate of the provision was determined based
upon a potential customer remediation exercise, whereby the population of
customers who are at the highest likelihood of having not received the
expected level of service from their adviser would be identified. These
customers would be invited to join the review if they believe that they have
not received ongoing advice and if they wish to have their situation reviewed
by Quilter. Following the initial draft results of the cohort of customers
undertaken by the Skilled Person, the Group determined a reasonable estimate
of a provision for the potential redress payable to customers to settle the
cases where the expected level of service from their adviser may not have been
received. The draft results from the Skilled Person Review were extrapolated
from their sample to the population of all customers who paid an ongoing
advice charge between 2018 and 2023 (inclusive of both years). An estimate of
the response rate of customers to join the review, and of the associated
administrative costs, were determined based upon experience from previous past
business reviews performed by the Group, and assumptions on the number of
customers who may be subject to the review process.
The provision recognised at 31 December 2024, based upon the approach
described above, included an estimate of the refund of ongoing advice charges
for customers impacted, interest payable to customers at rates in line with
the applicable Financial Ombudsman Service current interest rates, and
administrative costs, both internal and external, to perform the customer
remediation exercise.
The Skilled Person's report was finalised during the first half of 2025.
Quilter is committed to ensuring that customers who have not received the
services that they were charged for are appropriately identified and
remediated. Accordingly, a Customer Remediation Strategy was developed by the
Group during the second half of 2025, in consultation with management's
external experts and remains ongoing. The strategy includes identifying the
customer cohorts to be involved within the exercise, and a sampling exercise
of cases for each Appointed Representative firm who have customers within the
relevant population. The remediation exercise is risk-based and will consider
cases where the customer has been charged for ongoing advice services, and the
adviser is unable to satisfactorily evidence the provision of those services.
The remediation exercise will involve the population of customers who are at
the highest likelihood of having not received the expected level of service
from their adviser. An expense of £2 million has been recognised during the
year for the unwind of the discount rate when calculating the present value of
future costs of the customer remediation exercise provision due to the passage
of time. During 2025, £14 million of the provision has been utilised for
administrative costs. Given that activity during 2025 was focused on
development of the Customer Remediation Strategy, no customers were remediated
during the year. The principles used in the calculation of the provision
remain unchanged, with the focus of results shifting to the cases reviewed
internally for customers within higher risk cohorts rather than the Skilled
Person Review results which were based upon a representative sample of the
entire population of customers. The provision has been recalculated based upon
the initial findings of the Customer Remediation Strategy and reflects the
impact of the change in the Financial Ombudsman Service interest rates policy
on customer redress. These changes, overall, have resulted in a reduction of
the provision of £22 million. Customer redress is expected to be calculated
and paid to relevant customers over an 18--‑month period to 30 June 2027. Of
the total £42 million (31 December 2024: £76 million) provision outstanding
at the reporting date, £31 million (31 December 2024: £33 million) is
estimated to be payable within one year. In line with IAS 37 (Provisions,
Contingent Liabilities and Contingent Assets), amounts estimated to be payable
after 12 months have not been discounted to their present value given that the
impact of such discounting would be immaterial.
The following table presents the potential change to the provision balance as
a result of movements in the key assumptions:
£m
31 December 2025 31 December 2024
Increase Decrease Increase Decrease
Percentage point change in proportion of in-scope population where 9 (8) 16 (16)
satisfactory service evidence is unavailable of 10%
Percentage point change in response rate of 10% 9 (9) 14 (14)
Change in administrative costs of 10% related to time period to complete the 2 (2) 3 (3)
exercise
Uncertainty exists regarding the remediation exercise, including the
proportion of the population of customers charged a fee where servicing was
not provided, the response rate of customers contacted and the administrative
costs to complete the exercise. The financial impact could be materially
higher or lower than the amount of the provision.
Where redress payments are made to customers, the Group has the ability to
seek appropriate reimbursement from the relevant Appointed Representative
firms who have been unable to demonstrate that the ongoing advice service paid
by the customer was provided. Should the Group make payments to customers,
recompense to the Group can be sought from the relevant Appointed
Representative firm who has benefited from the majority of the revenue
recognised over the period of the servicing agreement. Any reimbursement would
not be recognised as a reduction of the provision recognised and would only be
recognised as an asset at such time as recoverability became virtually
certain. If the receipt of the potential reimbursement became probable but was
not virtually certain it would be disclosed as a contingent asset, but not
recognised within net assets.
Compensation provisions
At 31 December 2025, compensation provisions total £2 million (31 December
2024: £14 million). The net reduction of £12 million during the period
consists of additional charges to profit or loss of £2 million, offset by
compensation and professional fees payments of £3 million and £11 million
release of unused amounts following further review work completed during the
period. Compensation provisions comprise the following:
Lighthouse pension transfer advice provision of £nil (31 December 2024: £1
million)
A further review of a sample of Lighthouse DB to DC pension transfer advice
cases not relating to the British Steel Pension Scheme has been conducted by
an independent expert to identify any cases of unsuitable DB to DC pension
transfer advice. The review was conducted using a past business review
process, and the sample was selected on a risk-based approach. The review of
this sample identified some additional cases where customer redress was
required.
During 2024, redress payments of £1 million were made to customers, £1
million of professional fees were paid, and £3 million of the provision
related to customer redress was unused and reversed. This resulted from the
redress calculations performed for customers being lower than previously
forecast, due to changes in the assumptions used to perform the calculations
and market movements of the pension scheme values during 2024.
In the period to 31 December 2025, redress payments and associated
professional fees of £1 million were made to customers and the independent
expert, with the liability at 31 December 2024 utilised in full and settled.
The review concluded in June 2025.
Other compensation provisions of £2 million (31 December 2024: £13 million)
Other compensation provisions of £2 million include amounts relating to
internally conducted past business reviews, the cost of correcting
deficiencies in policy administration systems, including redress, any
associated litigation costs and the related costs to compensate current and
former policyholders and customers. This provision represents management's
best estimate of expected outcomes based upon past experience, and a review of
the details of each case. Due to the nature of the provision, the timing of
the expected cash outflows is uncertain. The best estimate of the timing of
outflows is that the majority of the balance is expected to be settled within
12 months.
A provision of £nil, included within the balance, has been recognised at 31
December 2025 (31 December 2024: £7 million) relating to internally conducted
past business reviews of ongoing servicing within Quilter Financial Planning,
as part of the Group's normal business operations. During the period to 31
December 2025, redress payments of £1 million were made to customers, and £6
million of the provision related to customer redress was unused and reversed
as the vast majority of the past business reviews were completed during the
year.
A provision of £nil, included within the balance, has been recognised at 31
December 2025 (31 December 2024: £2 million) relating to potentially
unsuitable DB to DC pension transfer advice provided by adviser businesses
other than Lighthouse. The provision has been updated for the current status
of the review, which is now complete, and redress determined based upon the
customer redress calculations performed. £2 million of the provision related
to customer redress was unused and reversed.
Sale of subsidiaries provision
The sale of subsidiaries provision totals £nil at 31 December 2025 (31
December 2024: £1 million). The provision at 31 December 2024 was for
warranty claims relating to the sale, in 2015, of former subsidiaries and has
been released following the conclusion of several tax audits in Germany.
Property provisions
Property provisions total £6 million (31 December 2024: £7 million).
Property provisions represent the discounted value of expected future costs of
reinstating leased property to its original condition at the end of the lease
term, and any onerous commitments which may arise in cases where a leased
property is no longer fully used by the Group. The estimate is based upon
property location, size of property and an estimate of the cost per square
foot. Property provisions are used or released when the reinstatement
obligations are satisfied. The associated asset for the property provisions
relating to the cost of reinstating property is included within Property,
plant and equipment.
Of the £6 million provision outstanding, £nil (31 December 2024: £1
million) is estimated to be payable within one year. The majority of the
balance relates to leased properties which have a lease term maturity of more
than five years.
Clawback and other provisions
Clawback and other provisions total £13 million (31 December 2024: £13
million) and include amounts for the resolution of legal uncertainties and the
settlement of other claims raised by contracting parties and indemnity
commission provisions. Where the impact of discounting is material, provisions
are discounted at a risk-free rate. The timing and final amounts of payments,
particularly those in respect of litigation claims and similar actions against
the Group, are uncertain and could result in adjustments to the amounts
recorded.
Included within the balance at 31 December 2025 is £9 million (31 December
2024: £10 million) of clawback provisions in respect of potential refunds due
to product providers on indemnity commission within the Quilter Financial
Planning business. This provision, which is estimated and charged as a
reduction of revenue at the point of sale of each policy, is based upon
assumptions determined from historical experience of the proportion of
policyholders cancelling their policies, which requires the Group to refund a
portion of commission previously received to the product provider. Reductions
to the provision result from the payment of cash to product providers as
refunds or the recognition of revenue where a portion of the indemnity
commission is assessed as no longer payable. The provision has been assessed
at the reporting date and adjusted for the latest cancellation information
available. At 31 December 2025, an associated balance of £6 million
recoverable from brokers is included within Trade, other receivables and other
assets (31 December 2024: £6 million).
The Group estimates a reasonably possible change of +/- £3 million, based
upon the potential range of outcomes for the proportion of cancelled policies
within the clawback provision, and a detailed review of the other provisions.
Of the total £13 million provision outstanding, £6 million is estimated to
be payable within one year (31 December 2024: £6 million).
17: Contingent liabilities
The Group, in the ordinary course of business, enters into transactions that
expose it to tax, legal, regulatory and business risks. The Group recognises a
provision when it has a present obligation as a result of past events, and it
is probable that a transfer of economic benefits will be required to settle
the obligation and a reliable estimate of the amount can be made (see note
16). Possible obligations and known liabilities are reported as contingent
liabilities where no reliable estimate can be made, or it is considered
improbable that an outflow would result.
The Group routinely monitors and assesses contingent liabilities arising from
matters such as business reviews, litigation, warranties and indemnities
relating to past acquisitions and disposals.
Tax
The Group is committed to conducting its tax affairs in accordance with the
tax legislation of the countries in which it operates and this includes
compliance with legislation related to levies, sales taxes and payroll
deductions.
The tax authorities in the countries in which the Group operates routinely
review historical transactions undertaken and tax law interpretations made by
the Group. All interpretations made by the Group are made with reference to
the specific facts and circumstances of the transaction and the relevant
legislation.
There are occasions where the Group's interpretation of tax law may be
challenged by the tax authorities. The consolidated financial statements
include provisions that reflect the Group's assessment of liabilities which
might reasonably be expected to materialise as part of their review. The Group
is satisfied that adequate provisions have been made in respect of tax
uncertainties.
Complaints, disputes and regulations
The Group is committed to treating customers fairly and remains focused on
delivering good outcomes for customers to support them in meeting their
lifetime goals. During the normal course of business, from time to time, the
Group receives complaints and claims from customers including, but not limited
to, complaints to the Financial Ombudsman Service and legal proceedings,
enters into commercial disputes with service providers and other parties, and
is subject to discussions and reviews with regulators. The costs, including
legal costs, of these issues as they arise can be significant and, where
appropriate, provisions have been established.
18: Capital and financial risk management
18(a): Capital management
The Group manages its capital with a focus on capital efficiency and effective
risk management. The capital management objectives are to maintain the Group's
ability to continue as a going concern while supporting the optimisation of
return relative to risk. The Group ensures that it can meet its expected
capital and financing needs at all times having regard to the Group's Business
Plans, forecasts, strategic initiatives and the regulatory requirements
applicable to Group entities.
The Group's overall capital risk appetite is set with reference to the
requirements of the relevant stakeholders and seeks to:
· maintain sufficient, but not excessive, financial strength to
support stakeholder requirements;
· optimise debt to equity structure to enhance shareholder returns;
and
· retain financial flexibility by maintaining liquidity including
unutilised committed credit lines.
The primary sources of capital used by the Group are equity shareholders'
funds of £1,466 million (2024: £1,423 million) and subordinated debt which
was issued at £200 million in January 2023. Alternative resources are
utilised where appropriate. Risk appetite has been defined for the level of
capital, liquidity and debt within the Group. The risk appetite includes
long-term targets, early warning thresholds and risk appetite limits. The
dividend policy sets out the target dividend level in relation to profits.
The regulatory capital for the Group is assessed under UK Solvency II
requirements.
18(a)(i): Regulatory capital (unaudited)
The Group is subject to UK Solvency II group supervision by the Prudential
Regulation Authority. The Group is required to measure and monitor its capital
resources under the UK Solvency II regulatory regime.
The Group's UK life insurance undertaking is included in the Group solvency
calculation on a UK Solvency II basis. Other regulated entities are included
in the Group solvency calculation according to the relevant sectoral rules.
The Group's UK Solvency II surplus is the amount by which the Group's capital
on a UK Solvency II basis (own funds) exceeds the UK Solvency II capital
requirement (solvency capital requirement or "SCR").
The Group's UK Solvency II surplus is £876 million at 31 December 2025 (2024:
£851 million), representing an SCR coverage ratio of 204% (2024: 219%)
calculated under the standard formula. The UK Solvency II regulatory position
at 31 December 2025 allows for the impact of the recommended Final Dividend
payment of £58 million (2024: £57 million).
The UK Solvency II position as at 31 December 2025 (unaudited estimate) and 31
December 2024 is presented below:
£m
31 December 31 December
2025(1) 2024(2)
Own funds 1,719 1,566
Solvency capital requirement 843 715
UK Solvency II surplus 876 851
UK Solvency II coverage ratio 204% 219%
(1)Filing of annual regulatory reporting forms due by 27 May 2026.
(2)As reported in the Group Solvency and Financial Condition Report for the
year ended 31 December 2024.
The Group's own funds include the Quilter plc issued subordinated debt
security which qualifies as capital under UK Solvency II. The composition of
own funds by tier is presented in the table below.
£m
Group own funds 31 December 2025 31 December 2024
Tier 1(1) 1,516 1,366
Tier 2(2) 203 200
Total Group UK Solvency II own funds 1,719 1,566
(1)All Tier 1 capital is unrestricted for tiering purposes.
(2)Comprises a UK Solvency II compliant subordinated debt security in the form
of a Tier 2 bond, which was issued at £200 million in January 2023.
The Group's UK life insurance undertaking is also subject to UK Solvency II at
entity level. Other regulated entities in the Group are subject to the locally
applicable entity-level capital requirements in the countries in which they
operate. In addition, the Group's asset management and advice businesses are
subject to group supervision by the FCA under the UK Investment Firms
Prudential Regime ("IFPR").
During 2025, the capital requirements for the Group and its regulated
subsidiaries were reported and monitored through regular Group Financial Risk
Management Committee meetings. Throughout 2025, the Group has complied with
the regulatory requirements that apply at a consolidated level and Quilter's
insurance undertakings and investment firms have complied with the regulatory
capital requirements that apply at entity level.
18(a)(ii): Loan covenants
Under the terms of the revolving credit facility agreement, the Group is
required to comply with the following financial covenant: the ratio of total
net borrowings to consolidated equity shareholders' funds shall not exceed
0.5.
£m
31 December 31 December
2025 2024
Total external borrowings of the Company 199 198
Less: cash and cash equivalents of the Company (118) (135)
Total net external borrowings of the Company 81 63
Total shareholders' equity of the Group 1,466 1,423
Tier 2 bond 199 198
Total Group equity (including Tier 2 bond) 1,665 1,621
Ratio of Company net external borrowings to Group equity 0.049 0.039
The Group has complied with the covenant since the facility was originally
created in 2018.
18(a)(iii): Own Risk and Solvency Assessment ("ORSA") and Internal Capital
Adequacy and Risk Assessment ("ICARA")
The Group ORSA process is an ongoing cycle of risk and capital management
processes which provides an overall assessment of the current and future risk
profile of the Group and demonstrates the relationship between business
strategy, risk appetite, risk profile and solvency needs. These assessments
support strategic planning and risk-based decision making.
The underlying ORSA processes cover the Group and consider how risks and
solvency needs may evolve over the planning period. The ORSA includes stress
and scenario tests, which are performed to assess the financial and
operational resilience of the Group.
The Group ORSA report is produced annually. This summarises the analysis,
insights and conclusions from the underlying risk and capital management
processes in respect of the Group. The ORSA report is submitted to the PRA as
part of the normal supervisory process and may be supplemented by ad hoc
assessments where there is a material change in the risk profile of the Group
outside the usual reporting cycle.
In addition to the Group ORSA process, an entity-level ORSA process is
performed for Quilter Life & Pensions Limited, with its results included
in the Group ORSA report.
The Group ICARA process is an ongoing cycle of risk and capital management
processes, similar to the ORSA process. The Group ICARA process is performed
for the prudential consolidation of Quilter's investment and advice firms
under IFPR requirements. The ICARA process is also performed at an entity
level for Quilter's UK investment firms, which are Quilter Investment Platform
Limited, Quilter Investors Limited, Quilter Cheviot Limited and Quilter Invest
Limited.
The Group ICARA report is produced annually. This summarises the analysis,
insights and conclusions from the underlying risk and capital management
processes in respect of Quilter's IFPR prudential consolidation group.
The conclusions of the ORSA and ICARA processes are reviewed by management and
the Board throughout the year.
18(b): Credit risk
Overall exposure to credit risk
Credit risk is the risk of adverse movements in credit spreads (relative to
the reference yield curve), credit ratings or default rates leading to a
deterioration in the level or volatility of assets or liabilities resulting in
loss of earnings or reduced solvency. This includes counterparty default risk,
counterparty concentration risk and spread risk.
The Group has established a Credit Risk Framework that includes a Credit Risk
Policy and Credit Risk Appetite Statement. This framework applies to all
activities where the Group is exposed to credit risk, either directly or
indirectly, ensuring appropriate identification, measurement, management,
monitoring and reporting of the Group's credit risk exposures.
The credit risk arising from all exposures is mitigated by ensuring that the
Group only enters into relationships with appropriately robust counterparties,
adhering to the Group Credit Risk Policy. For each asset, consideration is
given as to:
· the credit rating of the counterparty, which is used to derive
the probability of default;
· the loss given default;
· the potential recovery which may be made in the event of default;
· the extent of any collateral that the Group has in respect of the
exposures; and
· any second order risks that may arise where the Group has
collateral against the credit risk exposure.
The credit risk exposures of the Group are monitored regularly to ensure that
counterparties remain creditworthy, that there is appropriate diversification
of counterparties and that exposures are within approved limits. At the end of
2025, the Group's material credit exposures were to financial institutions
(primarily through the investment of shareholder funds), corporate entities
(including external fund managers) and individuals (primarily through fund
management trade settlement activities).
There is no direct exposure to non-UK sovereign debt within the shareholder
investments. The Group has no significant concentrations of credit risk
exposure.
Other credit risks
The Group is exposed to financial adviser counterparty risk through a number
of loans that it makes to its financial advisers and the payment of upfront
commission on the sale of certain types of business. The risk of default by
financial advisers is managed through monthly monitoring of loan and
commission debt balances.
The Group is also exposed to the risk of default by fund management groups in
respect of settlements. This risk is managed through the due diligence process
which is completed before entering into any relationship with a fund group.
Amounts due to and from fund groups are monitored for prompt settlement and
appropriate action is taken where settlement is not timely.
Legal contracts are maintained where the Group enters into credit transactions
with a counterparty.
Impact of credit risk on fair value
Due to the limited exposure that the Group has to credit risk, credit risk
does not have a material impact on the fair value movement of financial
instruments for the year under review. The fair value movements on these
instruments are mainly due to changes in market conditions.
Maximum exposure to credit risk
The Group's maximum exposure to credit risk does not differ from the carrying
value disclosed in the relevant notes to the consolidated financial
statements.
Loans and advances subject to 12-month expected credit losses are £44 million
(2024: £56 million) and other receivables subject to lifetime expected credit
losses are £251 million (2024: £268 million). Those balances represent the
pool of counterparties that do not require a rating. These counterparties
individually generate no material credit exposure and this pool is highly
diversified, monitored and subject to limits.
Exposure arising from financial instruments not recognised on the statement of
financial position is measured as the maximum amount that the Group would have
to pay, which may be significantly greater than the amount that would be
recognised as a liability. The Group does not have any significant exposure
arising from items not recognised on the statement of financial position.
The table below represents the Group's exposure to credit risk from cash and
cash equivalents.
£m
Credit rating relating to cash and cash equivalents
31 December 2025 AAA AA A B 5 years Total
Investment contract liabilities(1) 64,493 - - 64,493
Third-party interests in consolidated funds 9,393 - - 9,393
Borrowings and lease liabilities(2) 209 39 37 285
Trade, other payables and other liabilities(3) 542 2 - 544
Derivative liabilities 24 - - 24
Total financial liabilities on an undiscounted basis 74,661 41 37 74,739
£m
31 December 2024 <1 year 1-5 years >5 years Total
Investment contract liabilities(1) 51,758 - - 51,758
Third-party interests in consolidated funds 8,225 - - 8,225
Borrowings and lease liabilities(2) 208 38 45 291
Trade, other payables and other liabilities(3) 399 1 - 400
Derivative liabilities 53 - - 53
Total financial liabilities on an undiscounted basis 60,643 39 45 60,727
(1)The linked assets are held to cover the liabilities for linked investment
contracts.
(2)The amounts represent gross, undiscounted contractual cash flows.
(3)Values presented exclude non-financial liabilities.
18(e): Life underwriting risk
18(e)(i): Overview
Life underwriting risk covers risks arising under products provided by
Quilter's life insurance firm, Quilter Life & Pensions Limited. These
products do not meet the IFRS definition of insurance contracts.
Life underwriting risk covers the risk of adverse experience of withdrawal,
overrun in expenses or higher than expected mortality experience.
The sensitivity of the Group's earnings and capital position to life
underwriting risks is monitored through the Group's capital management
processes.
The Group manages its life underwriting risks through the following
mechanisms:
· Management of expense levels relative to approved budgets.
· Analysis and monitoring of experience relative to the assumptions
used to determine technical provisions.
Persistency
Persistency risk is the risk that the level of surrenders or withdrawals on
products offered by Quilter Life & Pensions Limited occurs at levels that
are different to the levels assumed in the determination of technical
provisions. Persistency statistics are monitored monthly and a detailed
persistency analysis at a product group level is carried out on an annual
basis. Management actions may be triggered if persistency statistics indicate
significant adverse movement or emerging trends in experience.
Expenses
Expense risk is the risk that actual expenses and expense inflation differ
from the levels assumed in the determination of technical provisions. Expense
levels are monitored on a quarterly basis against budgets and forecasts.
Expense drivers are used to allocate expenses to entities and products. Some
product structures include maintenance charges. These charges are reviewed
annually in light of changes in maintenance expense levels and the market rate
of inflation. This review may result in changes in charge levels.
Mortality
Mortality risk is not material as the Group does not provide material
mortality insurance on its products.
18(e)(ii): Sensitivity analysis
Sensitivity analysis has been performed by applying the following parameters
to the financial statements for 2024 and 2025. Interest rate and equity and
property price sensitivities are included within the Group market
sensitivities above.
Expenses
The increase in expenses is assumed to apply to the costs associated with the
maintenance and acquisition of contracts within the unit-linked business. It
is assumed that these expenses are increased by 10% from the start of the
year, so is applied as an expense shock rather than a gradual increase. The
only administrative expenses that are deferrable are sales bonuses but as new
business volumes are unchanged in this sensitivity, sales bonuses and the
associated deferrals have not been increased.
An increase in expenses of 10% would have decreased profit by £6 million
after tax (2024: £5 million).
18(f): Operational risk
Operational risk refers to the potential for loss resulting from inadequate or
failed internal processes, systems, or external events. Such losses may
adversely impact profitability. This category encompasses risks arising from
operational processes and activities including the provision of services to
customers and financial advisers.
Key sources of operational risk include, but are not limited to:
· Technology and information security: Failures in IT
infrastructure, cybersecurity, and system development or maintenance.
· Distribution and advice: Risks associated with the provision and
oversight of financial advice and ongoing customer servicing.
· Investment management: Errors in investment management, fund
pricing, dealing, execution and settlement activities.
· Human resources: Risks arising from people management and
HR-related processes.
· Product lifecycle management: Issues in product development,
launch, and ongoing management.
· Legal and contractual risks: Exposure due to inadequate legal
agreements with third parties.
· Change management: Poorly executed responses to regulatory or
strategic change initiatives.
· Third-party management: Risks associated with outsourced service
providers and suppliers.
· Financial crime and business continuity: Threats from fraud,
cybercrime, and operational disruptions.
In line with Group policies, management holds primary responsibility for
identifying, assessing, managing, and monitoring operational risks. This
includes escalating and reporting issues to Executive Management.
Executive Management is accountable for implementing the Group Operational
Risk Framework and for developing and executing action plans to maintain risk
levels within acceptable tolerances and to address identified issues.
19: Related party transactions
In the normal course of business, the Group enters into transactions with related parties. Loans to related parties are conducted on an arm's length basis and are not material to the Group's results. There were no transactions with related parties during the current year or the prior year which had a material effect on the results or financial position of the Group. Full details of transactions with related parties, including key management personnel compensation is included within note 40 of the financial statements within the Group's 2025 Annual report. The Group's interest in subsidiaries and related undertakings are set out in Appendix A of the financial statements within the Group's 2025 Annual report.
20: Events after the reporting date
Final Dividend
On 4 March 2026, the Group announced a proposed Final Dividend for 2025 of 4.3
pence per Ordinary Share amounting to £58 million in total. Subject to
approval by shareholders at the Annual General Meeting, the dividend will be
paid on 18 May 2026.
Acquisition of ILTB Limited
On 14 January 2026, the Group acquired 100% of the share capital of ILTB
Limited for a total consideration of €16 million (equivalent of £14
million). €8 million (equivalent of £7 million) was paid on acquisition,
and an estimated further €8 million (equivalent of £7 million) is deferred
consideration payable in stages up to the third anniversary date post
completion dependent on business performance. The consideration includes
payment for control of the net assets of ILTB Limited of €2 million
(equivalent of £2 million). Further disclosures have not been provided as the
finalised transaction figures are not yet available. The Group expects to
recognise goodwill and intangible assets from the acquisition date once the
acquisition accounting is completed. ILTB Limited is an Irish investment
advisory firm trading as GillenMarkets that provides advice for personal,
pension and corporate customers.
Capital Return
On 4 March 2026, the Board approved a capital return of up to £100 million to
the shareholders of Quilter plc in the form of a Share Buyback Programme (the
"Programme"). The Programme has received regulatory approval from the Group's
lead supervisor, the Prudential Regulatory Authority, and this approval is
effective from 4 March 2026. The Programme has also received approval from the
South African Reserve Bank. The Programme will be conducted concurrently on
the London and Johannesburg Stock Exchanges. The Programme is dependent on
periodic Board review and the renewal of share purchase authorities at the
2026 Annual General Meeting. The Board review will ensure that the Programme
remains the most effective and timely method of returning capital to
shareholders and is expected to complete by the end of 2026. The Programme
will reduce the Group's IFRS net assets and UK Solvency II surplus on a
regulatory basis by £100 million. Further information on the Group's capital
position on a regulatory basis is presented in note 18(a). The Financial
review section of the Strategic Report includes the Group's pro forma solvency
position which allows for the reduction in capital that will result from the
Programme.
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