Business
Statement re closed book Life & Pensions
Capita plc has finalized a transition agreement for its remaining two legacy closed book Life & Pensions contracts with Royal London, marking the exit from this challenging business segment. Under the terms, Capita will pay Royal London an initial £22.47 million, with an option to settle this via the issuance of approximately 5,670,909 ordinary shares, representing about 4.96% of issued capital. Additionally, Capita will make three further payments of £10 million each on the first, second, and third anniversaries of the migration completion, which is expected to take five years. This migration is projected to result in a front-end loaded free cash outflow of £20 million per annum, totaling £100 million over the five-year period. Disclaimer*
About this update from Capita Plc
[{"type":"text","content":"\n\n \n 12 December 2025Closed book Life & Pensions resolutionCapita plc (Capita)Capita today announces that it has reached a transition agreement for the remaining two legacy evergreen closed book Life & Pensions contracts, with its last client, Royal London’s legacy business.The closed book Life & Pensions business1, which sits within the Group’s Regulated Services segment (part of Capita Experience), has been a challenging part of the Group from which Capita has been actively seeking to exit. Since 2023, the Group has entered into a number of transition agreements for the other contracts within this business which are being migrated over the coming years.Under the agreement, Capita will pay Royal London an initial payment of approximately £22.47m. The agreement provides an option, exercisable by either Royal London or Capita, for that initial payment to be settled through the issue to Royal London of 5,670,909 ordinary shares2, representing approximately c.4.96% of the Group’s issued share capital. This option may be exercisable on or before the close of business on the fourth business day after the date of this announcement. If this option is exercised, the newly issued shares will be subject to customary lock-up arrangements during the migration period, which is expected to last five years.Capita will also pay Royal London a further contribution towards its costs, consisting of three payments, each of £10m, on the first, second and third anniversary of the migration completion. The migration is expected to take five years, so these payments are expected to take place in 2031, 2032, 2033.Under the agreement, the two contracts will migrate back to Royal London, with each party covering their own associated migration costs. Based on the migration costs related to this hand-back plan, alongside the progress made in transition agreements for other contracts in this business, we expect a free cash outflow of £20m per annum during the five year migration period (equating to £100m in total across the migration period), which is expected to be front-end loaded.Adolfo Hernandez, Chief Executive Officer, Capita said:“Resolving the challenges in the closed book Life & Pensions business was a key priority for 2025 and we are extremely pleased to have reached a settlement with Royal London to migrate the remaining two eve...