The Directors present their Strategic report and financial statements for the year ended 31 December 2025.

Capita Life & Pensions Regulated Services Limited ('the Company') is a wholly owned subsidiary (directly held) of Capita plc. Capita plc along with all its subsidiaries is hereafter referred to as 'the Group'. Until December 2025, the performance of the Company was presented within the Regulated Services operating segment of the Group, which sits within the Capita Experience Division. From December 2025, the Company's activities met the Group's criteria to be presented as a business exit within the Group's results.

The principal activity of the Company is delivering customer service, policy administration, claims activities and associated technology, to third party Life and Pension businesses. There have not been any significant changes in the Company's principal activities in the period under review, however, in December 2025, the Company reached a transition agreement for the remaining two legacy evergreen contracts with its one remaining client, Royal London. This agreement enables the planned exit from the activities undertaken by the Company over the coming years.

As shown in Company's income statement on page 14, revenue has decreased as expected from £154,513,108 in 2024 to £107,287,324 in 2025 reflecting the progress being made on contract exits by the Company during the year.

The Company reported an operating loss of £81,388,523 for the year 2025 compared to an operating profit of £12,212,046 in 2024. This loss was driven primarily by the Royal London transition agreement and BAU losses relating to legacy contracts. The transition agreement provided an option, exercisable by either Royal London or Capita, for an initial payment to be settled through the issue to Royal London of 5,670,909 ordinary shares of Capita plc. This option was exercised in December 2025. This initial payment in addition to a provision for a contribution to Royal London's future costs and a provision for business migration costs contributed £63,652,737 towards the 2025 operating loss. The remainder was due to the run costs of operating legacy contracts and other exit activities.

The balance sheet on pages 15 to 16 of the financial statements shows the financial position at the year end. Net assets have decreased from £275,554,156 in 2024 to £263,333,271 in 2025 primarily due to losses on running legacy contracts and other exit activities. The initial payment and provision for a contribution to Royal London’s future costs have been borne by Capita plc (the Company’s parent company) and as such recognised by the Company as a capital contribution in the year (refer to page 17 statement of changes in equity).

During the year, the Company transferred the business and assets of its actuarial function to Capita Pension Solutions Limited, another fellow subsidiary within the Group, through a business transfer agreement (BTA) in order to consolidate actuarial capabilities and enhance the integrated service offering across the insurance and pensions sectors.

Details of the amounts owed by/to its parent company and fellow subsidiary companies are shown in notes 13 and 16 to the financial statements.

The key financial performance indicators used by the Group, on a consolidated basis, include adjusted revenue, adjusted profit before tax, adjusted basic earnings per share, free cash flow excluding business exits, and gearing ratios. The Group manages its operations on an operating segment basis and consequently, some of these indicators are monitored at an operating segment level.

The Company is authorised and regulated by the Financial Conduct Authority and is directly owned by Capita plc. The Company is governed by a Board consisting of non-executive directors and other executive board members.

The Company is subject to MIPRU & IPRU-INV 13 rules. Disclosures have been aligned to FRC guidance.

The Company's Board is ultimately responsible for the risk management regime, as well as ensuring that the governance and culture of the firm starts at the Board. This includes the segregation of duties in the organisation and the prevention of conflicts of interest. It is satisfied that the risk systems are adequate for the Company's profile and strategy.

Systems and procedures are in place to identify, assess and mitigate major business risks that could impact the Company. Monitoring exposure to risk and uncertainty is an integral part of the Company’s structured management processes and is focused through the Risk and Compliance Committee. The Risk and Compliance Committee meets at least 4 times per year and receives formal reports from a range of functions within the business.

The Company is not risk averse but seeks to actively manage material risk to the business. Operational risk is the main category of risk faced by the Company. Whilst accepting that data security and fraud risks are inherent within business operations, the Company has a zero tolerance for fraudulent or corrupt behaviour, with controls designed accordingly.

Whilst risk appetite is strategic and linked to business objectives, risk tolerance is operational and expressed in such a way that it can be linked to the same risk measures implemented by operational teams throughout the Company's business. The Company's Risk & Compliance team, who are independent of the business, provide ongoing challenge for the risk management process, as well as ensuring consistency with other parts of the Group.

The Company is not reliant on any single external commercial relationship and therefore we do not believe the exposure to Concentration Risk to be material.

The Company has developed a liquidity management framework to formalise the monitoring and control processes in place to ensure it has sufficient liquid resources to meet its liabilities as they come due. This risk is therefore considered to be minimal.

The assets include bank deposits held with Barclays Bank PLC as part of a cash pooling arrangement with other subsidiaries of Capita plc. The Company holds £12.4m, separate from the Group cash pool, and also holds an unconditional letter of credit worth £4.8m. The credit and liquidity risk associated with these deposits are reviewed on an ongoing basis and are considered by management to be low.

Other risks

The Company is exposed to other risks that, should they materialise, could have a detrimental impact on financial performance, reputation or operational resilience.

• People attraction and retention: Attract, develop, engage and retain the right talent.

• Financial stability: Maintain financial stability and achieve financial targets.

• Environment, social and governance: Comply with regulatory and contractual requirements to drive a purpose driven organisation with the right focus on governance.

• Safety and Health: Protect the safety, health and duty of care of all Capita’s employees, the people we work with and those affected by our activities.

As a subsidiary of Capita plc, the Company is subject to controls and risk governance techniques across all businesses. Details of the specific risk assessments and mitigating actions are outlined on pages 81-85 of the Group's 2025 Annual Report.

Our People

Why this relationship matters

Our colleagues are central to the delivery of the Group’s strategy, the embedding of a values-based culture, and the provision of high-quality products and services that meet client expectations.

Their key priorities and expectations

Colleagues’ priorities include opportunities for learning, development and career progression; a positive and inclusive workplace culture; fair and transparent pay and reward; support for health and wellbeing; flexible ways of working; and open, two-way communication with leadership, including clear visibility of strategy, change programmes and decision-making.

How we engaged

• Regular all-employee communications, including leadership briefings and global townhalls

• Employee focus groups and colleague network groups

• Workforce engagement on pay at Capita

• Ongoing engagement through management cascades, local action planning and "you said, we did" feedback mechanisms.

Topics of engagement

• Creating and sustaining an inclusive workplace

• Culture, values and leadership behaviours

• Health, safety and wellbeing

• Speak Up arrangements and ethical culture

• Directors’ remuneration and pay at Capita

• Career development, internal mobility and the career path framework

• Annual salary review and reward transparency

Outcomes and actions

The 2025 all-colleague survey reported an Employee Net Promoter Score (eNPS) of -22, representing an eleven-point improvement on the 2024 survey. While this indicates improving colleague sentiment, the Board recognises that overall survey indicators show engagement remains an area of focus. Survey insights have informed targeted action planning at Group, divisional and local levels.

During the year, the Group continued to progress its multi-year culture programme, building on foundations established in 2024 to rally, reset and embed Capita’s culture. This included the further mobilisation of more than 250 Culture Accelerators globally, mandated management and leadership development, and the embedding of refreshed Group values and the launch of an employee playbook to support consistent behaviours and ways of working. The Group also introduced Celebrate!, a recognition platform designed to reward and celebrate colleagues and reinforce behaviours aligned to Capita’s values across the organisation. Capita continued to strengthen its focus on inclusion and fair reward. Gender pay gap performance improved compared to the prior year, and the Group continued its voluntary disclosure of ethnicity pay gap data and, for the first time, disability pay gap data. Since reporting commenced in 2017, Capita has reduced its median gender pay gap by more than ten percentage points.

Engagement with colleagues on pay, progression and reward transparency was strengthened through dedicated workforce engagement sessions during the year Promotion of the Speak Up policy continued across the organisation, reinforcing the Group’s commitment to ethical behaviour, openness and psychological safety.

Risks to stakeholder relationship

• The ability to attract, retain and develop colleagues, with potential impacts on service quality and financial performance.

• The pace of cultural change and the effectiveness of embedding new behaviours and ways of working during transformation.

Key metrics

Voluntary attrition, eNPS, employee engagement index and colleague survey completion level.

Clients and customers

Why this relationship matters

Clients and customers rely on Capita for the consistent and timely delivery of critical services. Capita’s reputation, contract performance and long-term success depend on meeting their service expectations and supporting effective transformation outcomes.

Their key priorities and expectations

High-quality service delivery; delivery of transformation projects within agreed timeframes; and responsible, ethical and sustainable business credentials.

How we engaged

• Regular client meetings, monthly or quarterly business reviews and surveys

• Through our customer advisory boards.

• Through our senior client partner programme which provides an experienced single point of contact for key clients and customers.

Topics of engagement

• Current service delivery, ongoing migration activities, and transition planning for the entity's major contract

• Mobilisation of services required to support the migration programme

Outcomes and actions

Feedback provided to business units to address any issues raised; client value proposition teams supporting divisions with co-creation ideas; direct customer and sector feedback; and senior client partner programme undertaking client-focused growth sprints and account plans to build understanding of client issues and ideas to help address them.

Risks to stakeholder relationship

• Loss of business by not providing the services that our clients and customers want

• Damage to reputation by not delivering to the requirements of our clients and customers

• Loss of customers for our clients

Key metrics

Customer NPS; specific feedback on client engagements.

Suppliers and Partners

Why this relationship matters

At Capita, our suppliers and partners including leading hyperscalers, play a pivotal role in delivering our purpose. By collaborating with organisations that share our values, we maintain high standards, ensure operational excellence, and achieve outcomes aligned with our social, economic, and environmental commitments. Our partnerships, particularly with hyperscalers including AWS, Microsoft, Salesforce and ServiceNow, enhance our ability to innovate and deliver cutting-edge digital solutions.

We will continually review our supply base to ensure it delivers better outcomes for customers while addressing the need to reduce supply chain complexity and improve service quality

Their key priorities and expectations

• Transparent and fair procurement processes.

• Collaboration on joint initiatives that drive innovation and foster long-term partnerships

• Reliable and timely payment terms.

• Shared commitment to sustainability, resilience, and compliance with Science-Based Targets (SBTs) backed approach to net zero.

• Provision of a safe working environment for anyone affected by Capita businesses while upholding the highest standards of ethical conduct in all endeavours.

• Partnering with diverse suppliers that bring innovation, disruptive technologies and positively impact local communities.

• Maintaining availability, integrity and confidentiality of our business relationships and the systems that support them, remaining resilient through periods of disruption.

How we engaged

• Strategic collaboration with hyperscalers: focused on co-creating solutions for Capita's clients, integrating advanced AI and cloud capabilities into our offerings.

• Innovation forums: by conducting joint workshops with hyperscalers to align on product roadmaps and explore new technologies that enhance the customer experience.

• Performance reviews: by ongoing performance assessments to ensure value delivery and alignment with Capita's strategic goals.

• Sustainability partnerships: collaborating with hyperscalers to assess and mitigate the environmental impact of cloud-based operations, contributing to the reduction of Capita's Scope 3 carbon footprint.

• Engagement reviews: regular supplier meetings, ensuring openness throughout the source to procure process complete with in-life feedback questionnaires and risk assessments.

• Supplier performance monitoring.

• Supplier charter commitments.

• Partnering opportunities.

• Joint development of AI powered customer service tools.

Topics of engagement

• New technology and gen AI offerings suitable for both Capita and Capita-customer use.

• Supplier payments.

• Sourcing requirements and bid opportunities.

• Supplier performance monitoring.

• Supplier charter commitments.

• Partnering opportunities.

• Joint development of AI powered customer service tools.

• Deployment of cloud-native platforms to modernise public and private sector operations

• Commitment to sustainability, including carbon footprint transparency and initiatives to meet net zero goals.

• Enhancing cyber security standards across partner ecosystems to safeguard stakeholders.

Outcomes and actions

Our Supplier Charter, which is available on our website, remains central to Capita’s approach to supplier relationships and sets out the standards and behaviours expected of suppliers, including acting ethically, providing safe working conditions, treating workers with dignity and respect, and operating in an environmentally responsible manner. The Group seeks to work with suppliers and partners that share its values and support delivery of its purpose to create better outcomes.

As part of its responsible business commitments, Capita manages and monitors a range of supply chain-related metrics, including sustainability performance, spend with SMEs, VCSEs and diverse-owned businesses, and modern slavery risk.

During the year, procurement governance and risk management arrangements were strengthened through the introduction of enhanced supplier due diligence and a new supplier risk assessment framework, supported by a centralised supplier relationship management platform. These controls improve visibility across the supplier lifecycle and support the identification, monitoring and mitigation of risks relating to human rights, modern slavery, ethical conduct and regulatory compliance.

During 2025, 97% of Group suppliers were paid within 60 days.

Risks to stakeholder relationship

• Evolving regulatory and environmental requirements

• Maintaining shared commitments to transparency and sustainability

• Maintaining resilience in the supply chain and partner ecosystems

Key metrics

Percentage of supplier payments made within agreed terms; SME spend allocation; and supplier diversity profile.

Society

Why this relationship matters

Capita is a provider of key services to government impacting a large proportion of the population.

Their key priorities and expectations

Social value; community engagement; diversity, equity and inclusion; climate change; data privacy and security, AI, business ethics; accreditations and benchmarking; and cost-of-living pressures

How we engaged

• Membership of non-governmental organisations

• Charitable and community partnerships

• External accreditations and benchmarking

• Working with our partners, clients and suppliers

Topics of engagement

• Social value

• Workplace inequalities

• Diversity, equity & inclusion

• Data privacy and security

• AI and business ethics

• Climate change

• Community engagement

Section 172 statement (continued)

Outcomes and actions

Community engagement programme such as Social Shifters; Business in the Community’s Opening Doors campaign, a flagship initiative championing inclusive recruitment across UK workplaces. Listed on the Forbes Global list of top employers for women for the third consecutive year; our gender pay gap has improved by 11.10% since we began reporting. We achieved Onvero’s Gold Talent Inclusion and Diversity Evaluation (TIDE) Award, maintained a Disability Confident Employer (level 3) recognition across the Group and Armed Forces Covenant Gold Employer Recognition Award, received Carbon Disclosure Project (CDP) ranking of B, EcoVadis Committed badge and the Charities Trust’s Payroll Giving Platinum Quality Mark Award.

Risks to stakeholder relationship

• Lack of understanding of the issues important to them.

• Insufficient communication or involvement in shaping and influencing strategies and plans.

Key metrics

Community investment, workforce diversity and ethnicity data, including pay gaps, external indices performance such as EcoVadis.

On behalf of the board

The Directors present their Directors' Report and Financial statements for the year ended 31 December 2025.

The results for the year are set out on page 14.

No interim or final dividend was paid or proposed during the year (2024: £nil).

The Directors, who held office during the year and up to the date of signature of the financial statements were as follows:

The Company made no political donations and incurred no political expenditure during the year (2024: £nil).

It is the Company's policy to give full consideration to suitable applications for employment of disabled persons. Disabled employees are eligible to participate in all career development opportunities available to staff. Opportunities also exist for employees of the company who become disabled to continue in their employment or to be retrained for other positions in the Company or Group.

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

KPMG LLP has indicated its willingness to continue in office, will be deemed to be reappointed as auditor under section 487(2) of the Companies Act 2006.

The Company recognises the importance of its environmental responsibilities, monitors its impact on the environment, and designs and implements policies to reduce any damage that might be caused by the its activities. The Company operates in accordance with Group policies, which are described in the Capita plc 2025 annual report that does not form part of this report. Initiatives designed to minimise the Company’s impact on the environment include safe disposal of waste, recycling and reducing energy consumption.

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of its profit or loss for that period. In preparing these financial statements, the Directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

So far as each person who was a Director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the Company's auditor is unaware. Having made enquiries of fellow directors and the Company's auditor, each director has taken all the steps he/she might reasonably be expected to take as a director to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

The Company has granted an indemnity to the directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. This qualifying third-party indemnity provision remains in force as at the date of approving the directors' report.

We have audited the financial statements of Capita Life & Pension Regulated Services Limited (“the Company”) for the year ended 31 December 2025 which comprise the Income Statement, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and related notes, including the accounting policies in note 1.

In our opinion the financial statements:

•     give a true and fair view of the state of the Company’s affairs as at 31 December 2025 and of its result for the year then ended;

•     have been properly prepared in accordance with UK accounting standards, including FRS 101 ; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to other entities of public interest. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern from the date of approval of the financial statements to 30 June 2027 (“the going concern period”).

We used our knowledge of the Company, its industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.

The risk that we considered most likely to adversely affect the Company’s available financial resources over this period was the extent to which the Company is reliant on the wider group headed by Capita plc (“the Group”), which is driven by the following factors:

• The Company’s participation in the Group’s notional cash pooling arrangements;

• The significant level of intercompany receivables from fellow Group undertakings;

• The level of administrative support services received from the Group; and

• The Company receives revenue from other Group entities or key contracts that may be terminated in the event of default by the Group.

We considered whether this risk could plausibly affect the liquidity and/or the continuing operations of the Company in the going concern period. Our procedures included:

• Inspecting the internally provided cash flow projections over the going concern assessment period for the wider group and the level of available financial resources indicated by those financial projections;

• Critically assessing the downside scenarios considered by the Directors against our understanding the Group and the sector in which it operates; and

• Examining Capita plc’s financial statements, including the going concern disclosures and details of the Group’s other credit facilities.

We also evaluated the directors’ assessment of the impact of their announcement of contract exits on the going concern assessment. This included performing inquiries with management to assess the status of the contract migrations. We also evaluated the Company’s underlying contractual obligations and contract terms with the customers.

We considered whether the going concern disclosure in note 1.1 to the financial statements gives a full and accurate description of the directors’ assessment of going concern, including the identified risks and dependencies.

Our conclusions based on this work:

• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;

• we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period; and

• we found the going concern disclosure in note 1.1 to be acceptable.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.

Fraud and breaches of laws and regulations - ability to detect

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

• Enquiring of directors, internal audit and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Company’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.

• Reading Board Meeting minutes.

• Considering the remuneration incentive schemes and performance targets for management and directors including the short-term incentive plan and long-term incentive plan for management remuneration.

• Using analytical procedures to identify any unusual or unexpected relationships.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.

As required by auditing standards and taking into account possible pressures to meet profit targets, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because of the straightforward nature of revenue recognition, which reflects the agreed upon contract terms with minimal estimation or subjective judgement.

We also identified a fraud risk related to recognition of onerous contract provision due to significant estimation uncertainty involved in forecasting losses that will be incurred up until the migration date as well as the temporary covenant amendment obtained, which creates a potential for management bias.

We performed procedures including:

• Identifying journal entries and other adjustments to test, based on risk criteria and comparing the identified entries to supporting documentation. These included those posted by senior finance management and those posted to unusual accounts.

• Assessing whether the judgements made in recognising onerous contract provision are indicative of potential bias.

Identifying and responding to risks of material misstatement related to compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies' legislation), distributable profits legislation and taxation legislation, and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: data protection laws, anti-bribery, employment law, and certain aspects of company legislation recognising the nature of the Company’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Strategic report and directors' report

The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon.

Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

• we have not identified material misstatements in the strategic report and the directors’ report;

• in our opinion the information given in those reports for the financial year is consistent with the financial statements; and

• in our opinion those reports have been prepared in accordance with the Companies Act 2006.

Under the Companies Act 2006 we are required to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of directors’ remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

As explained more fully in their statement set out on page 9, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

The income statement has been prepared on the basis that all operations are continuing operations.

The notes and information on pages 18 to 47 form an integral part of these financial statements.

The notes and information on pages 18 to 47 form an integral part of these financial statements.

The balance classified as share capital is the nominal proceeds on issue of the Company's equity share capital, comprising 82,000,000 ordinary shares of £1 each.

The Company can redeem shares by repaying the market value to the shareholder, whereupon the shares are cancelled. Redemption must be from distributable profits. The capital redemption reserve represents the nominal value of the shares redeemed.

Net profits kept to accumulate in the Company after dividends are paid and retained in the business as working capital. Capital contribution represents the contribution made by the Company's parent company towards the costs associated with the exit of the Royal London contracts.

The notes and information on pages 18 to 47 form an integral part of these financial statements.

Capita Life & Pensions Regulated Services Limited is a company incorporated and domiciled in the United Kingdom.

The financial statements have been prepared under the historical cost basis except where stated otherwise and in accordance with applicable accounting standards.

In determining the appropriate basis of preparation for the financial statements for the year ended 31 December 2025, the Company’s Directors (‘the Directors’) are required to consider whether the Company can continue in operational existence for the foreseeable future. The Directors have concluded that it is appropriate to adopt the going concern basis, having undertaken a rigorous assessment set out below.

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of these financial statements. The Directors have considered the period from the date of approval of these financial statements to 30 June 2027 (‘the going concern period’) and which aligns to the period considered by the Directors of the ultimate parent company, Capita plc.

Directors' assessment

The financial forecasts used for the going concern assessment are derived from financial projections for 2026-2028 for the Company which have been subject to review and challenge by management and the Directors. The Directors have approved the projections.

It was announced at the Capita plc Capital Markets Day in June 2024 that the Group would be exploring the exit of the activities undertaken by the Company. The Company has entered into a number of transition agreements for its customer contracts which are being migrated over the coming years. In December 2025, the Company reached a transition agreement for the remaining two legacy evergreen contracts with its last customer, Royal London. The migration of the Royal London contracts is expected to take five years due to the complex nature of the contracts and systems, and data interdependencies. As such, the Company will be operating these contracts beyond the going concern assessment period adopted in preparing these financial statements.

For the purpose of the going concern assessment, the Directors have considered the cash flow forecasts and available resources, and have also taken into account the interdependencies with other entities within the group headed by Capita plc. The company is forecasting operating cash outflows for the going concern period, however the Directors have concluded that the Company has adequate resources to meet its liabilities as they fall due.

Inter-dependency with other entities in the group headed by Capita plc ('the Group')

The Director’s assessment of going concern has considered the extent to which the Company’s ability to remain a going concern is inter-dependent with that of the Group. The Company has dependency with the Group in respect of the following:

• provision of certain services, such as administrative services and should the Group be unable to deliver these services, the Company would have difficulty in continuing to trade;

• participation in the Group’s notional cash pooling arrangements, of which £30,155,245 was held at 31 May 2026. In the event of the cash being required elsewhere in the Group, the Company may not be able to access its cash balance within the pooling arrangement;

• recovery of receivables of £235,975,096 from fellow Group companies as of 31 May 2026. If these receivables are not able to be recovered when forecast by the Company, then the Company may have difficulty in continuing to trade; and

• revenue from other Group entities and key contracts that may be terminated in the event of a default by the Group.

Given the inter-dependency the Company has with the Group, the Directors have considered the financial position of the ultimate parent company as disclosed in its most recent consolidated financial statements, being for the year ended 31 December 2025.

Basis of preparation (continued)true

Ultimate parent undertaking – Capita plc

The Capita plc Board (‘the Board’) concluded that it was appropriate to adopt the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key uncertainties, sensitivities, and mitigations when preparing the Group’s consolidated financial statements at 31 December 2025. These consolidated financial statements were approved by the Board on 9 March 2026 and are available on the Group’s website (www.capita.com/investors). Below is a summary of the position at 9 March 2026:

Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of at least twelve months from the date of approval of the consolidated financial statements. The Board has considered the period from the date of approval of the consolidated financial statements to 30 June 2027, which aligns with a period end and covenant test date for the Group.

The base case financial forecasts used in the Group going concern assessment are derived from the 2026-2028 business plan as approved by the Board in March 2026.

Under the base case scenario, the Group forecasts growth in revenue, profit and cash flow over the medium term. When combined with available committed facilities, this allows the Group to manage scheduled debt repayments (with no need for future refinancing of these repayments). The most material sensitivities to the base case are the risk of not delivering the planned revenue growth.

The base case projections used for going concern assessment purposes reflect business disposals completed up to the date of approval of the consolidated financial statements. The base case financial forecasts demonstrate liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 30 June 2027.

In considering severe but plausible downside scenarios, the Board has taken account of the potential adverse financial impacts resulting from the following risks:

• •    revenue growth falling materially short of plan;

• •    unforeseen operational issues leading to contract losses and cash outflows;

• •    sustained interest rates at current levels;

• •    non-availability of the Group’s non-recourse trade receivables financing facility; and

• •    unexpected financial costs linked tounexpected one-off incidents

The likelihood of simultaneous crystallisation of the above risks is considered by the Board to be low. Nevertheless, in the event that simultaneous crystallisation were to occur, the Group would need to take action to ensure there is sufficient liquidity. In its assessment of going concern, the Board has considered the mitigations, under the direct control of the Group, that could be implemented including, but not limited to, substantially reducing (or removing in full) bonus and incentive payments, reducing discretionary spend and reduction or delay in capital investment. Taking these considerations into account, the Group's financial forecasts, in a severe but plausible downside scenario, demonstrate sufficient liquidity headroom and compliance with all debt covenant measures throughout the going concern period to 30 June 2027.

Adoption of going concern basis in the Group financial statements :

Reflecting the forecasts, coupled with the Board’s ability to implement appropriate mitigations should the severe but plausible downside materialise, the Group continued to adopt the going concern basis in preparing the consolidated financial statements. The Board has concluded that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 30 June 2027.

The directors have also made enquiries with the directors of the ultimate parent undertaking to understand the performance of the Group, and to confirm that they are not aware of any events or circumstances since 9 March 2026 that would change their conclusion in regard to the going concern basis for the Group and ultimate parent undertaking.

Basis of preparation (continued)

Conclusion

Although the Company has a reliance on the Group as detailed above, based on their enquiries with the Group’s Directors and the Company’s forecasts, even in a severe but plausible downside, the Directors are confident the Company will continue to have adequate financial resources to continue in operation and discharge its liabilities as they fall due over the period to 30 June 2027. Consequently, the financial statements have been prepared on the going concern basis.

The Company has applied FRS101 – Reduced Disclosure Framework in the preparation of its financial statements.

The Company has prepared and presented these financial statements by applying the recognition, measurement and disclosure requirements of international accounting standards in conformity with the requirements of the Companies Act 2006.

The Company's ultimate parent company, Capita plc, includes the Company in its consolidated statements. The consolidated financial statements are prepared in accordance with UK-adopted International Accounting Standards ('UK-IFRSs') and the Disclosure and the Transparency Rules of the UK's Financial Conduct Authority. These are available to the public and may be obtained from Capita plc’s website on https://www.capita.com/investors.

In these financial statements, the Company has applied the disclosure exemptions available under FRS 101 in respect of the following disclosures:

•     A cash flow statement and related notes;

•     Comparative period reconciliations for share capital, tangible fixed assets and intangible assets;

•     Disclosures in respect of transactions with wholly owned subsidiaries;

•     Disclosures in respect of capital management;

•     The effects of new but not yet effective IFRSs;

•     Certain disclosures as required by IFRS 15 ;

•     Disclosures in respect of the compensation of key management personnel; and

•     Disclosures as required by IFRS 16 .

Since the consolidated financial statements of Capita plc include equivalent disclosures, the Company has also taken the disclosure exemptions under FRS 101 available in respect of the following disclosure:

•     Certain disclosures required by IFRS 2 in respect of Group settled share based payments;

•     Certain disclosures required by IAS 36 in respect of the impairment of goodwill, indefinite life intangible assets and investment in subsidiaries;

•     Certain disclosures required by IFRS 3 in respect of business combinations undertaken by the Company, including a comparative period reconciliation of goodwill; and

•     Certain disclosures required by IFRS 7 and certain disclosure exemptions as permitted by IFRS 13 Fair value measurement.

The Company has adopted the new amendments to standards detailed below but they do not have a material effect on the Company's financial statements.

Revenue is earned within the United Kingdom. The Company currently services multiple customers within the Life and Pensions industry.

Revenue is recognised either when the performance obligation in the contract has been performed ('point-in-time' recognition) or 'over-time' when control of the performance obligation is transferred to the customer.

The Company also delivers on change orders for additional goods and services which are not part of the Master Service Agreements ('MSAs') with the customer. In those cases, the revenue is recognised on a time and materials basis in the month the activity takes place. Generally, the transaction price is agreed in advance with the client on a day rate basis. The total transaction price is driven by the above transaction price multiplied by the hours worked by the resource.

The Company enters into contracts which contain extension periods, where either the customer or both parties can choose to extend the contract or there is an automatic annual renewal, and/or termination clauses that could impact the actual duration of the contract. Judgement is applied to assess the impact that these clauses have when determining the appropriate contract term. The term of the contract impacts both the period over which revenue from performance obligations may be recognised and the period over which contract fulfilment assets and capitalised costs to obtain a contract are expensed. For contracts with no defined end date the Company applies either a five year rolling basis or a suitable similar alternative.

For contracts with multiple components to be delivered for example: transformation; transitions and the delivery of outsourced services; management applies judgement to consider whether those promised goods and services are (i) distinct - to be accounted for as separate performance obligations; (ii) not distinct - to be combined with other promised goods or services until a bundle is identified that is distinct or (iii) part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer.

At contract inception the total transaction price is estimated, being the amount to which the Company expects to be entitled and has rights to under the present contract. This includes an assessment of any variable consideration where the Company's performance may result in additional revenues based on the achievement of agreed Key Performance Indicators ('KPIs'). Such amounts are only included based on the expected value or the most likely outcome, and only to the extent that it is highly probable that no revenue reversal will occur.

The transaction price does not include estimates of consideration resulting from change orders for additional goods and services unless these are agreed.

Once the total transaction price is determined, the Company allocates this to the identified performance obligations in proportion to their relative standalone selling prices and recognises revenue when (or as) those performance obligations are satisfied.

The Company normally sells a customer bespoke solution, and in these cases the Company typically uses the expected cost-plus margin or a contractually stated price approach to estimate the standalone selling price of each performance obligation.

The Company may offer price step downs during the life of a contract, but with no change to the underlying scope of services to be delivered. In general, any such variable consideration, price step down or discount is included in the total transaction price to be allocated across all performance obligations unless it relates to only one performance obligation in the contract.

For each performance obligation to be recognised over-time, the Company applies a revenue recognition method that faithfully depicts the Company’s performance in transferring control of the goods or services to the customer. This decision requires assessment of the real nature of the goods or services that the Company has promised to transfer to the customer. The Company applies the relevant output or input method consistently to similar performance obligations in other contracts.

When using the output method, the Company recognises revenue on the basis of direct measurements of the value to the customer of the goods and services transferred to date relative to the remaining goods and services under the contract. Where the output method is used, for long term service contracts where the series guidance is applied (see below for further details), the Company often uses a method of time elapsed which requires minimal estimation. Certain long-term contracts use output methods based upon estimation of number of users, level of service activity or fees collected.

If performance obligations in a contract do not meet the over-time criteria, the Company recognises revenue at a point-in-time when the service or good is delivered.

Contract fulfilment costs

Contract fulfilment costs are divided into: (i) costs that give rise to an asset; and (ii) costs that are expensed when incurred.

In determining the appropriate accounting treatment for such costs, the Company firstly considers any other applicable standards. If those other standards preclude capitalisation of a particular cost, then an asset is not recognised under IFRS 15. If other standards are not applicable to contract fulfilment costs, the Company applies the following criteria which, if met, result in capitalisation: (i) the costs directly relate to a contract or to a specifically identifiable anticipated contract; (ii) the costs generate or enhance resources of the entity that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered.

The assessment of this criteria requires the application of judgement, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recoverable.

Utilisation: The utilisation charge is included within cost of sales. The Company utilises contract fulfilment assets over the expected contract period using a systematic basis that mirrors the pattern in which the Company transfers control of the service to the customer. Judgement is applied to determine this period.

Derecognition: A contract fulfilment asset is derecognised either when it is disposed of or when no further economic benefits are expected to flow from its use or disposal.

Impairment: At each reporting date, the Company determines whether or not the contract fulfilment assets are impaired by comparing the carrying amount of the asset to the remaining amount of consideration that the Company expects to receive less the costs that relate to providing services under the relevant contract. In determining the estimated amount of consideration, the Company uses the same principles as it does to determine the contract transaction price, except that any constraints used to reduce the transaction price are removed for the impairment test.

Contract modifications

The Company’s contracts are often amended for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new or changes the existing enforceable rights and obligations.

The effect of a contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognised as an adjustment to revenue in one of the following ways:

a. prospectively as an additional separate contract;

b. prospectively as a termination of the existing contract and creation of a new contract;

c. as part of the original contract using a cumulative catch up; or

d. as a combination of (b) and (c).

For contracts for which the Company has decided there is a series of distinct goods and services that are substantially the same and have the same pattern of transfer where revenue is recognised over time, the modification will always be treated under either (a) or (b) ; (d) may arise when a contract has a part termination and a modification of the remaining performance obligations. The facts and circumstances of any contract modification are considered individually as the types of modifications will vary contract by contract and may result in different accounting outcomes.

Judgement is applied in relation to the accounting for such modifications where the final terms or legal contracts have not been agreed prior to the period end as management need to determine if a modification has been approved and if it either creates new or changes existing enforceable rights and obligations of the parties. Depending upon the outcome of such negotiations, the timing and amount of revenue recognised may be different in the relevant accounting periods. Modification and amendments to contracts are undertaken via an agreed formal process. For example, if a change in scope has been approved but the corresponding change in price is still being negotiated, management use their judgement to estimate the change to the total transaction price. Importantly any variable consideration is only recognised to the extent that it is highly probably that no revenue reversal will occur.

Deferred and accrued income

The Company’s customer contracts include a diverse range of payment schedules dependent upon the nature and type of goods and services being provided. This can include performance-based payments or progress payments and regular monthly or quarterly payments for ongoing service delivery. Payments for transactional goods and services may be at delivery date, in arrears or part payment in advance.

Where payments made are greater than the revenue recognised at the period end date, the Company recognises a deferred income contract liability for this difference. Where payments made are less than the revenue recognised at the period end date, the Company recognises an accrued income contract asset for this difference.

At each reporting date, the Company assesses whether there is any indication that accrued income assets may be impaired by considering whether the revenue remains highly probable that no revenue reversal will occur. Where an indicator of impairment exists, the Company makes a formal estimate of the asset’s recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Onerous contracts

The Company reviews its long-term contracts bi-annually to ensure that the expected economic benefits to be received are in excess of the unavoidable costs of meeting the obligations under the contract. The unavoidable costs are the lower of the net costs of termination or the costs of fulfilment of the contractual obligations. The Company recognises the excess of the unavoidable costs over economic benefits due to be received as an onerous contract provision.

Intangible assets are valued at cost less accumulated amortisation and impairment. Amortisation is calculated to write-off the cost in equal annual instalments over asset's estimated useful life, which is typically 1.5 to 20 years. In the case of capitalised software development costs, research expenditure is written-off to the income statement in the period in which it is incurred.

Development expenditure is written-off in the same way unless and until the Company is satisfied with the technical, commercial and financial viability of individual projects. In these cases, the development expenditure is capitalised and amortised over the period during which the Company is expected to benefit.

Property, plant and equipment are stated at cost less less accumulated depreciation and impairment. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The Company has investments in subsidiaries.

Investments in subsidiaries are initially recorded at cost. Subsequently they are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

At each balance sheet date, the Company assesses whether there are indicators to reverse the previously recognised impairment loss. The reversals of impairment are only recognised where there has been a change in the estimates used to determine the investment’s recoverable amount since the last impairment loss was recognised.

Trade and other receivables

Trade receivables are initially recognised at cost (being the same as fair value) and subsequently at amortised cost less any provision for impairment, to ensure the amounts recognised represent their recoverable amount. For trade receivables, the Company applies the simplified approach permitted by IFRS 9 Financial instruments, resulting in trade receivables recognised and carried at original invoice amount less an allowance for any uncollectible amounts based on expected credit losses. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

The Company monitors the level of trade receivables on a monthly basis, continually assessing the risk of default by any counterparty. Each customer has an external credit score which determines the level of credit provided.

Trade and other payables

Trade and other payables are recognised initially at cost (being same as fair value). Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with original maturities of three months or less that are readily convertible in to known amounts of cash and which are subject to an insignificant risk of change in value. Bank overdrafts are shown within current financial liabilities.

Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at their fair value less any directly attributable transaction costs. After initial recognition, loans and borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. Gains and losses are recognised in the income statement when the liabilities are derecognised, as well as through the amortisation process.

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available within the Group against which the deductible temporary differences, the carry-forward of unused tax assets and unused tax losses of the Company can be utilised except where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised, reductions are reversed when the probability of future taxable profits improves.

Taxation (continued)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Provisions are recognised when the Company has a present legal or constructive obligation arising from past events, it is probable that cash will be paid to settle it, and the amount can be estimated reliably.

If the effect of the time value of money is material, provisions are discounted using the yield on government bonds which have a similar timing and currency of cash flows to the provision being discounted. Where required adjustments are made to the yields to reflect the risks specific to the cash flows being discounted. The unwinding of the discount is recognised as a financing cost in the income statement.

The value of the provision is determined based on assumptions and estimates in relation to the amount, timing and likelihood of actual cash flows, which are dependent on future events. Where no reliable basis of estimation can be made, no provision is recorded. However, contingent liabilities disclosures are given when there is a greater than remote probability of outflow of economic benefits.

On an ongoing basis, management monitor provisions and their accurate estimation when compared to final outcomes.

The Company participates in a defined contribution pension scheme where contributions are charged to the profit and loss account in the year in which they are due. The scheme is funded and contributions are paid to separately administered funds. The assets of the scheme are held separately from the Company. The Company remits monthly pension contributions to Capita Business Services Ltd, a fellow subsidiary undertaking, which pays the group liability centrally. Any unpaid contributions at the year-end have been accrued in the accounts of Capita Business Services Ltd.

The Company also has employees who were members of the Group’s main defined benefit pension scheme (“HPS”).

When the Company ceased to have any active members in the HPS, this triggered a cessation event which meant a Section 75 debt (which is a statutory debt due from a participating employer to the trustees of a multi-employer defined benefit pension scheme which is in deficit) would have become due. However, the Trustee of the HPS agreed that the pension liabilities attributable to the Company would be transferred to Capita Business Services Ltd (the Principal Employer of the HPS), which removed the Section 75 debt due from the Company. This Flexible Apportionment Arrangement was agreed in early 2018. As a result of the arrangement, the Company was no longer a formal participating employer in the HPS. In return for the Trustee granting this Flexible Apportionment Arrangement, the Company had provided a guarantee to the HPS that put the Company into the same position as if it had remained a participating employer. However, in March 2025, the Trustee of the HPS released the Company from all its obligations and liabilities under or pursuant to this guarantee. Therefore, the Company has no further obligation to the HPS.

As there is no contractual agreement or stated group policy for charging the net defined benefit cost of the HPS to participating entities, the net defined benefit cost of the HPS is recognised fully by the Principal Employer.

A full actuarial valuation of the HPS is carried out every three years by an independent qualified actuary for the Trustee of the HPS, with the last full valuation carried out as at 31 March 2023. The next full actuarial valuation is due to be carried out with an effective date of 31 March 2026.

The Company participates in various share option and sharesave schemes operated by Capita plc, the ultimate parent undertaking. Details of these schemes are contained in the Group's Annual report.

The fair value of the equity instrument granted is measured at grant date and is recognised as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award. Fair value is determined using an option pricing model, only taking into account vesting conditions linked to the price of the shares of the Company (market conditions).

No expense is recognised for awards that do not ultimately vest as a result of not meeting performance or service conditions. Where all service and performance vesting conditions are met, the awards are treated as vesting, irrespective of whether or not the market condition is satisfied, as market conditions have been reflected in the fair value of the equity instruments.

At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions, the number of equity instruments that will ultimately vest or, in the case of an instrument subject to a market condition, be treated as vesting as described above. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding adjustment to equity.

Where the terms of an award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period adjusted for the incremental fair value of any modification ie the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if this difference is negative.

Where an award is cancelled, it is treated as if it had vested on the date of cancellation, and any cost not yet recognised in the income statement for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over the fair value being treated as an expense in the income statement.

The Company has taken land and buildings on lease.

The determination whether an arrangement is, or contains, a lease is based on whether the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.

The following sets out the Company’s lease accounting policy for all leases with the exception of leases with low value and term of twelve months or less which are expensed to the consolidated income statement.

The Company as a lessee - Right-of-use assets and lease liabilities

At the inception of the lease, the Company recognises a right-of-use asset at cost, which comprises the present value of minimum lease payments determined at the inception of the lease. Right-of-use assets are depreciated using the straight-line method over the shorter of estimated life or the lease term. Depreciation is included within administrative expenses in the consolidated income statement. Amendment to lease terms resulting in a change in payments or the length of the lease results in an adjustment to the right-of-use asset and liability. Right-of-use assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be fully recoverable.

The Company recognises lease liabilities where a lease contract exists and right-of-use assets representing the right to use the underlying leased assets. At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of the lease payments to be made over the lease term.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, over a similar term and with a similar security, the funds necessary to acquire an asset of a similar value to the right-of-use asset in a similar economic environment. Incremental borrowing rates are determined monthly and depend on the term, currency and start date of the lease. The incremental borrowing rate is determined based on a series of inputs including: the risk-free rate based on swap market data; a credit risk adjustment; and an entity-specific adjustment.

The lease liability is subsequently remeasured (with a corresponding adjustment to the related right-of-use asset) when there is a change in future lease payments due to a renegotiation or market rent review, a change of an index or rate or a reassessment of the lease term.

Lease payments are apportioned between a finance charge and a reduction of the lease liability based on the constant interest rate applied to the remaining balance of the liability. Interest expense is included within net finance costs in the consolidated income statement. Lease payments comprise fixed payments, including in-substance fixed payments such as service charges and variable lease payments that depend on an index or a rate, initially measured using the minimum index or rate at inception date. The payments also include any lease incentives and any penalty payments for terminating the lease, if it is anticipated that the Company will exercise that option. The lease term determined comprises the non-cancellable period of the lease contract. Periods covered by an option to extend the lease are included if the Company has reasonable certainty that the option will be exercised, and periods covered by an option to terminate are included if it is reasonably certain that this will not be exercised. The Company has elected to apply the practical expedient in IFRS 16 paragraph 15 not to separate non-lease components such as service charges from lease rental charges.

Monetary assets and liabilities denominated in foreign currencies are translated into British pounds sterling at the rates of exchange ruling at the balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. All foreign exchanges gains/losses are recognised in the income statement.

The financial statements present information about the Company as an individual undertaking and not about its group. The Company has not prepared group accounts as it is exempt from the requirement to do so by section 400 of the Companies Act 2006 as it is a subsidiary undertaking of Capita plc, a company incorporated in England and Wales, and is included in the financial statements of that Company.

The Company presents assets and liabilities in the balance sheet based on whether they are current or non-current.

An asset is current when it is:

• Expected to be realised or intended to be sold or consumed in the normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the reporting period; or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the reporting period; or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current.

Where a business is transferred from one legal entity to another legal entity within the Capita Group under a Business Transfer Agreement ('BTA'), this is treated as a business combination under common control, and would therefore fall outside of the scope of IFRS 3 Business Combinations. As such, an accounting policy choice has been made for how common control transactions are dealt with across the Group, as follows:

•     Where a BTA is undertaken at net book value (with consideration paid equal to the net book value of the assets and liabilities transferred on the BTA date), the relevant assets and liabilities of the transferring business are recognised in the transferee at their previous carrying values as in the transferor’s standalone entity accounts;

•     Where the consideration paid is greater than the net book value of the assets and liabilities transferred, this excess is recognised as a gain on disposal for the transferor, and by the recognition of entity level goodwill in the transferee, which would be linked to the acquired business.

The preparation of financial statements in accordance with generally accepted accounting principles requires the directors to make judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported income and expense during the presented periods. Although these judgements and assumptions are based on the directors’ best knowledge of the amount, events or actions, actual results may differ.

The key judgements and sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows :

•     Provisions: The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are the measurement of onerous provisions. Judgement is also required in assessing the remaining length of the contract to determine the provision. Management has considered the current best estimate of the costs to continue service delivery up to the expected end of these contracts and the migration costs to handover these services, reflecting the terms of the exits agreed and experience of previous contract exits. A potential range of outcomes has been identified in respect of the provision for the migration of the Royal London contracts within the Customer contract provision. Due to commercial sensitivities, the Company does not disclose the amounts involved in any individual contract, other than for the exit of the contracts with Royal London.

In respect of claims and litigation provisions, significant estimation is required due to the inherent uncertainty and complexity in determining the financial impact of legal proceedings. Management assesses the likelihood of unfavourable outcomes and estimates the potential financial impact based on legal advice, subject matter expert input, past experience, relevant facts and the nature of the claims. The potential values attached to these claims can be significant. The Company robustly defends its position and such claims are often settled for amounts materially lower than the initial claim, and in some cases may result in no transfer of economic benefits. Given the uncertainty around the timing and amount of potential settlements, it is not considered practicable to disclose a range of possible outcomes for these claims.

•     Impairment of investment in subsidiaries: The Company determines whether investments in subsidiaries are impaired based on impairment indicators. If an indicator is identified, an impairment test is performed. This involves estimation of the enterprise value of the investee which is determined based on the greater of discounted future cash flows at a suitable discount rate or through the recoverable value of the investments held by the investee company.

•     Deferred tax: In determining the recognition of deferred tax (refer note 8), management assesses the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are recognised to the extent that taxable temporary differences exist, and it is considered probable that future taxable profits will be available against which the assets can be utilised before their expiry. The availability of future profits must be assessed against forecasts and other supporting evidence. This determination of future forecasts is based on management’s judgement. It requires judgement regarding whether future profit forecasts are considered ‘more likely than not’ as supporting evidence for deferred tax asset recognition.

The total revenue of the Company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.

It was announced at the Capita plc Capital Markets Day in June 2024 that the Group would be exploring the exit of the activities undertaken by the Company. The Company has entered into a number of transition agreements for its customer contracts which are being migrated over the coming years. As mentioned in the Strategic Report, in December 2025, the Company reached a transition agreement for the remaining two legacy evergreen contracts with its last customer, Royal London. The transition agreement provided an option, exercisable by either Royal London or Capita, for an initial payment to be settled through the issue to Royal London of 5,670,909 ordinary shares of Capita plc. This option was exercised in December 2025.

The initial payment and provision for a contribution to Royal London’s future costs have been borne by Capita plc (the Company’s parent company) and as such recognised by the Company as a capital contribution in the year (refer to page 17 statement of changes in equity).

The above and a provision for business migration costs (refer to note 19) contributed £63,652,737 towards the 2025 operating loss, which given its nature and size has been disclosed on the face of the Company’s income statement.

Audit fees are borne by the ultimate parent company, Capita plc. The audit fee for the current period was £61,500 (2024: £60,000). The Company has taken advantage of the exemption provided by regulations 6(2)(b) of The Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 not to provide information in respect of fees for other (non-audit) services because this information is required to be given in the consolidated financial statements of the ultimate parent company, which it is required to prepare in accordance with the Companies Act 2006.

During the year, the Company received a dividend-in-specie of £2 (2024: £52,837,989) from Capita Retail Financial Services Limited in advance of its liquidation.

The Company has discounted long term contract provisions using the yield on government bonds. The unwinding of the discount is recognised as finance cost in the income statement.

The reconciliation between tax charge and the accounting profit multiplied by the UK corporation tax rate for the years ended 31 December 2025 and 2024 is as follows:

The Income Tax Receivable balance of £6,623,870 represents amounts due from other group companies for tax losses surrendered as group relief. In accordance with the stated accounting policy for taxation in note 1.9 to the financial statements, the utilisation and recognition of a deferred tax asset is dependent on the existence of sufficient future taxable profits. As at 31 December 2025, based on forecast profits, the Company has concluded in line with the stated policy that no deferred tax asset should be recognised in respect of gross fixed asset timing differences of £35,000,000 (2024: £38,583,270) and capital losses of £79,566 (2024: £79,566).

Other movements include amendments and terminations to the lease.

In advance of its liquidation, the Company impaired its investment in Capita Retail Financial Services Limited by £2. The impairment charge is offset by dividends received from this subsidiary (refer to note 6).

The Company considered whether there was an indicator of impairment in investments in subsidiaries at year end. At 31 December 2025 the Company’s ultimate parent company, Capita plc, identified an indicator of impairment existed due to the market capitalisation of the Group being below the carrying value of Capita plc’s net assets. As a key trading and holding company for the Group, this indicator of impairment is also considered to be relevant for the Company along with carrying value of net assets of its subsidiaries, and so an impairment test was carried out for the Company.

The enterprise value of each investment is calculated based on the present value of estimated future cash flows discounted at the current market rate of return. For non-trading subsidiaries this is based on the net asset value of the entity as at 31 December 2025, which is considered to not be materially different to the value derived by other means. For all other entities, recoverable amount is estimated on a discounted cash flow basis. Recoverable amounts also factor in the recoverable amount of an entity’s direct and indirect subsidiaries.

For discounted cash flow calculations, the cash flow projections used for the impairment test are derived from the 2026-2028 business plan approved by the Board of Directors. Key assumptions in the business plan include the delivery of planned revenue growth. The enterprise value is then calculated based on the present value of estimated future cash flows discounted at the current market rate of return.

The long-term growth rate is based on economic growth forecasts by recognised bodies and this has been applied to the forecast cash flows for the terminal period. The 2025 long-term growth rate is 1.5% (2024: 1.6%). The average pre-tax discount rate used for the impairment test is 12.1% (2024: 12.4%).

Management estimates discount rates using nominal post-tax rates of comparator companies. The discount rates reflect the latest market assumptions for the risk-free rate, the equity risk premium and the cost of debt, which are all based on publicly available external sources. Using this approach, the Company did not recognise any impairment during the year.

Details of the Company's direct subsidiaries at 31 December 2025 are as follows:

Registered office addresses :

Amounts due from Group companies are repayable on demand. These are not chargeable to interest except for amounts due from Capita plc, on which interest is charged as per the prevailing Bank of England rates.

In 2025, £272,011,947 (2024: £284,086,104) of the Company’s receivables due from other Group companies were classified from current to non‑current. These balances remain repayable on demand, together with any accrued interest; however, based on the conclusions of the review undertaken, there is no longer the expectation that the Company will realise these amounts within twelve months of the balance sheet date.

Amounts owed to Group companies payable within twelve months arise from trade and are repayable on demand and are interest free. Amounts due after more than one year includes an interest free subordinated loan received from its parent company to meet the regulatory requirements of the Financial Conduct Authority.

Lease liabilities are classified based on the amounts that are expected to be settled within the next twelve months and after more than twelve months from the reporting date, as follows:

During the year the Company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The Company participates in a defined contribution pension scheme.

The pension charge for the defined contribution pension scheme for the year is £3,305,682 (2024: £4,484,722). The pension charge excludes pension contributions paid by the Company on behalf of employees via a salary sacrifice arrangement.

The Company has current and former employees who were members of the Group’s main defined benefit pension scheme (“HPS”).

The HPS is a non-segregated scheme with around 200 different sections in the scheme where each section provides benefits on a particular basis (some based on final salary, some based on career average earnings) to particular groups of employees.

When the Company ceased to have any active members in the HPS, this triggered a cessation event which meant a Section 75 debt (which is a statutory debt due from a participating employer to the trustees of a multi-employer defined benefit pension scheme which is in deficit) would have become due. However, the Trustee of the HPS agreed that the pension liabilities attributable to the Company would be transferred to Capita Business Services Ltd (the Principal Employer of the HPS and a fellow subsidiary undertaking), which removed the Section 75 debt due from the Company. This Flexible Apportionment Arrangement was agreed in early 2018. As a result of the arrangement, the Company was no longer a formal participating employer in the HPS. In return for the Trustee of the HPS granting this Flexible Apportionment Arrangement, the Company had provided a guarantee to the HPS that put the Company into the same position as if it had remained a participating employer. However, in March 2025, the Trustee of the HPS released the Company from all its obligations and liabilities under or pursuant to this guarantee. Therefore, the Company has no further obligation to the HPS.

The pension charge for the Company in relation to the HPS for the year was £nil (2024: £nil).

A full actuarial valuation of the HPS is carried out every three years by an independent qualified actuary for the Trustee of the HPS, with the last full valuation carried out as at 31 March 2023. Amongst the main purposes of the valuation is to agree a contribution plan such that the pension scheme has sufficient assets available to meet future benefit payments, based on assumptions agreed between the Trustee of the HPS and the Principal Employer. The 31 March 2023 valuation showed a funding surplus of £51.4m (31 March 2020: funding deficit of £182.2m). This equates to a funding level of 105% (31 March 2020: 89%).

Given the funding position of the HPS, the Principal Employer and the Trustee of the HPS agreed that no further deficit recovery contributions from the Principal Employer were required other than those already committed1 as part of the 31 March 2020 actuarial valuation. The Principal Employer paid all the outstanding deficit contributions in 2024. There are no further agreed deficit contributions to be paid at this time.

1.These include additional, non-statutory, contributions to meet a secondary funding target with the objective of having sufficient assets to invest in a portfolio of low-risk assets with a low dependency covenant that will generate income to pay members’ benefits as they fall due.

Finally, the Principal Employer agreed an average employer contribution rate of 23.6% of pensionable salary towards the expected cost of benefits accruing.

The next full actuarial valuation is due to be carried out with an effective date of 31 March 2026.

For the purpose of the consolidated accounts of Capita plc, an independent qualified actuary projected the results of the 31 March 2023 full actuarial valuation to 31 December 2025 taking account of the relevant accounting requirements.

The principal assumptions for the accounting valuation as at 31 December 2025 were as follows: rate of increase in RPI/​CPI price inflation - 2.90% pa/​2.40% pa (2024: 3.10% pa/​2.55% pa); rate of salary increase - 2.90% pa (2024: 3.10% pa); rate of increase for pensions in payment (where RPI inflation capped at 5% pa applies) - 2.80% pa (2024: 2.95% pa); discount rate - 5.55% pa (2024: 5.50% pa).

The HPS assets at fair value as at 31 December 2025 totalled £1,024.6m (2024: £1,034.4m). The actuarially assessed value of HPS liabilities as at 31 December 2025 was £994.5m (2024: £995.1m) indicating that the HPS had a net asset of £30.1m (2024: net asset of £39.3m). These figures are quoted gross of deferred tax. The full disclosure is available in the consolidated accounts of Capita plc.

The average monthly number of employees (including non-executive Directors) were:

Their aggregate remuneration comprised:

The above includes payroll costs for temporary staff as well as recharges from other Group companies in respect of various services received by the Company throughout the year.

Two Directors are paid by the Company (2024 - two). For qualifying services provided by these Directors on the Company's affairs, Directors’ remuneration has been allocated to the Company during the period of their directorship. The Directors of the Company were also reimbursed for the expenses incurred by them whilst performing business responsibilities.

The other Directors have not provided qualifying services to the Company and are paid by the other Companies within the Capita Group. The Company has not paid any fees or other remuneration to the Group based Directors related to the directorship role they provided to the Company as a part of their management role in Capita experience division. The Company has estimated that allocation of the qualifying services that these Group based Directors provided to the Company is inconsequential.

The number of Directors for whom retirement benefits are accruing under defined contribution schemes amounted to one (2024 - one).

The number of directors who exercised share options during the year were one (2024 - two).

The Company is a wholly owned subsidiary undertaking of Capita plc, a company incorporated in England & Wales. The financial statements of Capita plc are available from the registered office at First Floor, 2 Kingdom Street, Paddington, London, England, W2 6BD.

During the year, the business and assets related to the actuarial business were transferred from the Company to other fellow company within the Group by way of Business Transfer Agreement (“BTA”) in order to consolidate actuarial capabilities and enhance the integrated service offering across the insurance and pensions sectors. As both transferor and transferee entity for this BTA were ultimately controlled by Capita plc, these are deemed to be business combinations under common control, with an accounting policy choice made as detailed in note 1.17. The following table shows the gross assets and gross liabilities transferred as part of BTA and consideration received by the Company:

*Consideration was settled via intercompany loan.

There are no significant events which have occurred after the reporting period.