Thames Water Utilities Limited has agreed a recovery plan with the trustees of the Thames Water Pension Scheme (TWPS) and Thames Water Mirror Image Pension Scheme (TWMIPS), which is aimed at reducing the deficit to zero by 2029.

The interim update from Thames Water Utilities showed that, as at 30 September 2024, the total net IAS19 accounting pension deficit for the group's two independently administered defined benefit (DB) schemes was £86m.

This marked a £33m year-on-year decrease in the six-month period, which was attributed to actuarial gains, as well as £21m of company contributions.

The triennial valuations at 31 March 2022 for TWMIPS and TWPS were also agreed in March 2024 and August 2024 respectively, the update confirmed.

As part of the triennial valuations, a recovery plan was agreed with the trustees aimed at reducing the deficit to zero by 2029 by making regular contributions and deficit repair payments, with a first payment of £20m was made in August 2024.

Commenting on the interim update more broadly, Thames Water chief executive officer, Chris Weston, said: "In the last six months we've made solid progress on the transformation and turnaround of Thames Water.

"After recognition from Ofwat with an improved performance ranking, we have continued to improve operational and underlying financial performance, with leakage at an all-time low and investment remaining at high levels in the first half of the year.

"At the same time, we've reached key milestones in establishing a more stable financial platform, agreeing a liquidity extension transaction proposal and progressing our equity raise process. The next critical step is receiving an investable final determination which is fundamental to our future."

Thames Water has been blocked from funding pension deficits with customer money since 2023, with the recent financial strains faced by Thames Water highlighting the challenging situation facing pension scheme trustees at UK water companies.

This article was originally published on our sister website, Pensions Age.

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