Saga plc
Annual Report and
Accounts 2026
IN THIS REPORT
STRATEGIC REPORT
4
Saga at a glance
6
75 years of Saga
8
The year in review
10
Chairman’s Statement
12
Group Chief Executive Officer’s
Strategic Review
18
Key performance indicators
20
Market review
22
Purpose and business model
24
Engaging with stakeholders
26
Group Chief Financial Officer’s Review
41
Environmental, Social and Governance
49
Risk management
51
Principal risks and uncertainties
55
Viability Statement
56
Key disclosure statements
GOVERNANCE
Corporate Governance Statement
58
Governance at a glance
59
Key statements and application of the
UK Corporate Governance Code
60
Chairman’s introduction to governance
62
Board of Directors
64
Board activities
69
Board leadership and Company purpose
70
Division of responsibilities
71
Composition, succession and evaluation
72
Nomination Committee Report
75
Audit and Risk Committee Report
Directors’ Remuneration Report
80
Annual Statement
83
Remuneration at a glance
85
Annual Report on Remuneration
97
Directors’ Remuneration Policy
108 Directors’ Report
111
Statements of responsibilities
112
Independent Auditor’s Report
to the Members of Saga plc
FINANCIAL STATEMENTS
Consolidated financial statements
118
Consolidated income statement
119
Consolidated statement of
comprehensive income
120
Consolidated statement of
financial position
121
Consolidated statement of changes
in equity
122
Consolidated statement of cash flows
123
Notes to the consolidated
financial statements
Company financial statements of Saga plc
188
Balance sheet
189
Statement of changes in equity
190
Notes to the Company financial
statements
ADDITIONAL INFORMATION
194
Alternative Performance Measures
Glossary
197
Glossary
200
Shareholder information
Our 2026 reporting suite
This report, alongside our 2026 Environmental, Social
and Governance (
ESG
) Report, can be accessed digitally
by scanning the QR code or visiting our website
www.corporate.saga.co.uk/investors/
results-reports-presentations
Saga plc
Environmental, Social and Governance Report 2026
Saga plc
Annual Report and
Accounts 2026
BUILDING THE
MOST-TRUSTED
BRAND FOR
PEOPLE OVER 50
Our purpose is to provide exceptional products
and services to meet the needs of people over 50.
We are committed to continually enhancing
our understanding of customers, allowing us
to deliver experiences they deserve and trust.
from Pat
I’d recommend Saga to anyone over 50 because it’s so
important that there is an organisation who genuinely
cares, genuinely supports us. Saga is embracing all of us,
and it’s constantly developing in order to make things even
better for us.”
Financial highlights
£654.6m
Underlying Revenue
1
from continuing operations
2024/25 – £588.6m
£660.0m
Revenue
2024/25 – £588.3m
£44.2m
Underlying Profit Before Tax
1
from continuing operations
2024/25 – £37.2m
£2.1m
Profit/(loss) before tax
from continuing operations
2024/25 – (£160.2m)
£134.9m
Trading EBITDA
1
from continuing operations
2024/25 – £116.0m
£205.9m
Available Operating Cash Flow
1
2024/25 – £109.6m
£499.5m
Net Debt
1
31 January 2025 – £592.8m
2
3.7x
Leverage Ratio
1
31 January 2025 – 4.4x
2
1
Alternative Performance Measures
In addition to statutory measures, the Group also measures performance using Alternative Performance
Measures. These are reconciled to statutory measures of performance on pages 194-196 of the Alternative
Performance Measures Glossary
2
Following the Group’s corporate refinancing and subsequent revised covenant definition, Net Debt and the
Leverage Ratio have been re-presented at 31 January 2025
Financial statements
Additional information
Governance
Strategic Report
Saga plc
Annual Report and Accounts 2026
3
Saga at a glance
LEVERAGING
OUR CORE
STRENGTHS
We are building the most-trusted
brand for people over 50 and our
business is built on that trust.
Contribution to Group Underlying Revenue
1
1
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
2
These are our businesses which are focussed on the specific needs and wishes of our unique customer group
3
Excludes discontinued operations
4
Other Businesses includes Money, Publishing and CustomerKNECT, in addition to our Central Cost base
Underlying Revenue
1
by business unit
2
Contribution
by business unit
2
Cruise
£319.0m
48.7%
Holidays
£185.1m
28.3%
Insurance
3
£131.6m
20.1%
Other
Businesses
4
£18.9m
2.9%
4
Saga plc
Annual Report and Accounts 2026
5
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
6
Wholly owned UK subsidiaries of Ageas SA/NV
Travel
Our Insurance Broking business provides tailored
insurance products and services, utilising partnership
models in:
•
motor and home, through our 20-year Affinity
Partnership with Ageas
6
; and
•
travel and private medical insurance, with Collinson and
Bupa respectively.
The Group’s Other Businesses comprise:
•
Money, offering savings products, equity release, legal
services, mortgages and investment solutions;
•
Publishing, delivering insightful and engaging content to
our unique audience through our award-winning Saga
Magazine, digital newsletters and our newly launched
podcast, ‘Experience is Everything’; and
•
CustomerKNECT, our in-house mailing and printing
business.
£16.9m
Insurance Broking Underlying Profit Before Tax
5
from continuing operations
2024/25 – £14.5m
14.7m
Saga Magazine website visits
2024/25 – 7.4m
£67.3m
Ocean Cruise Underlying
Profit Before Tax
5
2024/25 – £48.9m
£5.9m
River Cruise Underlying
Profit Before Tax
5
2024/25 – £4.0m
Our award-winning Cruise business offers a wide range
of luxury experiences on board:
•
our two boutique Ocean Cruise ships, Spirit of Discovery
and Spirit of Adventure, exploring a host of destinations
further afield; and
•
our fleet of smaller River Cruise ships, exploring Europe’s
beautiful waterways, including our brand-new boutique
ship, Spirit of the Moselle.
£14.0m
Underlying Profit Before Tax
5
2024/25 – £10.7m
Our award-winning Holidays business takes customers
all over the world, offering:
•
hosted holidays to an ever-growing range of specially
selected European hotels, delivering not only the highest
standards but also including our new nationwide shared
chauffeur service;
•
escorted tours, showcasing each destination’s history,
culture and character, with excursions tailored to our
customer base; and
•
special interest holidays designed to pique the appetite
of each and every customer.
Cruise
Holidays
Insurance
Other Businesses
Find out more in our Group Chief Executive Officer’s
Review on page 14
Find out more in our Group Chief Executive Officer’s
Review on page 16
Find out more in our Group Chief Executive Officer’s
Review on page 17
Find out more in our Group Chief Executive Officer’s
Review on page 15
Financial statements
Additional information
Governance
Strategic Report
Saga plc
Annual Report and Accounts 2026
5
Sidney and Margery De Haan launched a travel
company offering affordable off-peak holidays
exclusively to retired people
75 years of Saga
A REMARKABLE
JOURNEY
1965
We offered our first overseas
holiday – the destination was
Ostend, Belgium
1975
Through offering holidays in partnership
with British Rail, we became their largest
customer by the 1970s
1973
We sold our first chartered cruise,
marking the beginning of Saga’s journey
into the cruise market
1999
Our headquarters in Folkestone,
Enbrook Park, was built
1960s
1970s
#1
1980s
1951
1996
We purchased our first
Ocean Cruise ship, Saga Rose
1990s
In 2026, we are proudly celebrating 75 years of Saga – a remarkable journey built
on trust, innovation and dedication to enriching the lives of people over 50.
Saga plc
Annual Report and Accounts 2026
6
1985
The Saga Magazine launched,
with Prince Charles and
Princess Diana appearing
on the cover
1987
We began selling Money and
Insurance products
2021
Our first purpose-built
River Cruise ship,
Spirit of the Rhine,
was delivered
2025
We launched our new
podcast, ‘Experience
is Everything’
2001
The first Saga radio station was
launched in the West Midlands
2000s
2020s
2010s
2019
Our very first purpose-
built Ocean Cruise ship,
Spirit of Discovery was
delivered
2012
Saga Pearl II and Saga Sapphire replaced
our first Ocean Cruise ship, Saga Rose
Saga plc
Annual Report and Accounts 2026
7
Financial statements
Additional information
Governance
Strategic Report
The year in review
Sale of Insurance Underwriting
We successfully completed the sale of our Insurance
Underwriting business, Acromas Insurance Company
Limited, to Ageas
1
for £67.5m. The net proceeds
generated £56.9m, £11.4m above our initial guidance,
in addition to the receipt of £10.0m of pre-completion
dividends. This transaction simplified our operations,
removed underwriting risk and supported our strategic
Affinity Partnership with Ageas
1
.
Ageas
1
Affinity Partnership
We launched our 20-year Affinity Partnership with Ageas
1
,
representing another major milestone in the simplification
of our business. Following motor new business going live,
we received £60.0m of the total upfront £80.0m cash
consideration, with the remainder to be settled in
2026/27. The partnership combines our brand and
customer base with Ageas’s
1
insurance expertise to
deliver best-in-class motor and home insurance.
Spirit of the Moselle
In July 2025, we welcomed Spirit of the Moselle
to our River Cruise fleet, further enhancing our
premium travel offering. Its addition strengthens
our position in river cruising, delivering
unforgettable, high-quality experiences.
SIGNIFICANT
STRATEGIC PROGRESS
The last year has been momentous for Saga, marked by significant
strategic progress and transformation across the Group.
Consolidation of Travel leadership
We consolidated our previously separate Cruise
and Holidays leadership teams into a single,
customer-centric operation, that more efficiently
delivers a consistent customer experience across
all our Travel products.
1
Wholly owned UK subsidiaries of Ageas SA/NV
Saga plc
Annual Report and Accounts 2026
8
Corporate debt refinancing
We successfully completed our corporate debt refinancing
to strengthen our financial position and support future
growth. The new credit facilities include a £335.0m term
loan and a £116.6m delayed-draw term loan with HPS Funds
2
,
alongside a £33.4m Revolving Credit Facility (
RCF
)
syndicated between Barclays and NatWest. The interest
rate exposure is fully hedged, providing stability as we
execute our strategic plans. These facilities materially
enhanced liquidity, increased covenant headroom
and provided funding certainty, while offering improved
flexibility. The funds drawn in February 2025 enabled the
full repayment and cancellation of the £250.0m bond.
The £75.0m drawings under the £85.0m loan facility
provided by Roger De Haan were repaid and this facility,
and the existing RCF, were also cancelled.
Transformation of the year
Awarded ‘Transformation of the Year’ at the plc
awards, reflecting the significant progress made
in reshaping the business.
2
Certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed, advised or controlled by HPS Investment Partners, LLC or its subsidiaries
NatWest Boxed partnership
In December 2025, Money launched a seven-year
partnership with NatWest Boxed, NatWest Group’s
banking-as-a-service business, to deliver innovative
savings products tailored for people over 50. This
collaboration combines our deep customer insight with
NatWest’s scale and NatWest Boxed technology, opening
up new savings options for our customers and building on
our existing portfolio of differentiated personal finance
solutions for people over 50.
Launch of new podcast
We recently expanded our media reach with the
successful launch of our new podcast, ‘Experience
is Everything’. Designed to deepen engagement with
our audience, the podcast brings fresh perspectives,
real stories and expert insights, strengthening our
position as a trusted voice for our listeners.
Saga plc
Annual Report and Accounts 2026
9
Financial statements
Additional information
Governance
Strategic Report
My parents started operating holidays
for older people in the early 1950s when
they wanted to try and fill their seaside
hotel in Folkestone in the off-peak season.
The holidays were an immediate success,
and the idea of Saga was born.
I became Saga’s 11
th
employee in 1965,
its Managing Director in 1978 and Chief
Executive Officer (
CEO
) and Chairman
six years later. So, I know Saga well.
This year is our 75
th
birthday and it is
particularly fitting that this is also the year
in which we returned to the FTSE 250. Saga
is a business with a great heritage and the
progress we have made this year has been
built on the enduring principles that have long
defined us. We have always worked hard to
understand older people better than anyone
else and, over the years, that understanding
has allowed us to design products and
services successfully to meet the needs of
our customers.
We have delivered an excellent set of financial
results this year, reflecting significant
progress in embedding our new strategic
plan. Underlying Profit Before Tax
1
grew
by 19% when compared with last year,
revenues were up 12% and the Leverage
Ratio
1
fell to 3.7x.
1
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
2
Wholly owned UK subsidiaries of Ageas SA/NV
In summary
• Travel growth continues, driving
increases in Underlying Revenue
1
and
Underlying Profit Before Tax
1
.
• We completed the sale of our Insurance
Underwriting business to Ageas
2
.
• We also launched our insurance
partnership with Ageas
2
, a major step
in simplifying our operations and
reducing complexity.
• Net Debt
1
significantly reduced, when
compared with the prior year, and
continues to be a key strategic priority.
Implementation of the plan was carried out
at pace and resulted in a year of significant
transformation for Saga. The ability to change
has always been central to Saga’s long-term
success. Regularly reinventing ourselves,
in order to compete effectively and to stay
relevant to each new generation of older
people entering our market, has always
been essential.
Mike Hazell, our Group CEO, together with
Mark Watkins, our Group Chief Financial
Officer, and the senior management team
have been superb in refining and
implementing our business model in a way
that allows us to meet our customers’ needs
simply and effectively. Our partnership
strategy is a fundamental part of that
simplification. By accessing the skills and
infrastructure of high-quality business
partners to complement the core skills we
have in designing and marketing products
for older people, we are unlocking uniquely
compelling customer propositions that
neither partner could deliver alone.
As a result of the teams’ disciplined execution
of our plan in 2025/26, I am confident in our
future. All our businesses are performing well
and we have secured our long-term funding.
Our lower-risk, more simplified business
model sets us up well to deliver our growth
plan and significantly reduce our debt.
EXECUTING OUR
STRATEGIC PLAN
Chairman’s Statement
“We have delivered an excellent
set of financial results this year,
alongside significant progress in
embedding our new strategic plan.”
Sir Roger De Haan
Non-Executive Chairman
Saga plc
Annual Report and Accounts 2026
10
Reasons to invest in Saga
Our investment case is designed to create value for shareholders
through the delivery of sustainable long-term, capital-light growth,
alongside continued debt reduction.
Our Insurance business has had a very
successful year. The sale of our Insurance
Underwriting business in July 2025, together
with the launch of our Ageas
3
motor and
home Affinity Partnership in December
2025, meant that we ended the year taking
no underwriting risk and with our Insurance
operations significantly simplified. This new
commission-based business model means
that we now have greater certainty of
earnings, lower volatility and a less
capital-intensive path to growth, supported
by one of the largest insurers in Europe.
Our stronger balance sheet, together with
the new partnership, gave us the confidence
to invest in pricing and marketing. As a result,
both revenue and Underlying Profit Before
Tax
4
returned to growth after a number of
challenging years.
Travel is now the largest generator of profits
in the Group. Implementing a series of
operational improvements and changes to
our management structure led to increased
customer numbers and improved customer
satisfaction. As we head towards our 30
th
year of cruising, our Ocean and River Cruise
businesses continue to grow. Holidays are
also continuing to grow. It is excellent that,
after a number of years, we have started
offering holidays in the UK again, the place
our journey began 75 years ago.
2025/26 was a year in which we set out
to grow our profits, reduce our debt and
re-engineer our business, to focus on a more
simple, low risk, less capital-intensive way of
doing business. We have succeeded in
achieving these objectives and have gone into
the new year confident in the delivery of our
medium-term targets. None of this would
have been possible without the exceptional
commitment, expertise and sustained effort
from all of Saga’s colleagues.
Sir Roger De Haan
Non-Executive Chairman
20 April 2026
P.S. I am delighted that, during the last year,
Saga won many awards. Among them:
Best British Insurance Company, Best
Customer Centric Culture, Editor of the Year,
Newsletter of the Year, Best Cruise Line for
Luxury Holidays, Best Travel Company for
Luxury Holidays, Which? Recommended
Provider for Ocean Cruises and
Transformation of the Year, plc awards.
This, again, is testament to the great team
we have at Saga.
3
Wholly owned UK subsidiaries of Ageas SA/NV
4
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
5
Office for National Statistics – 2022-based national population projections for 2025
£205.9m
Available Operating Cash Flow
4
How we are different
Saga stands apart through the strength
of its brand and its long-standing
relationship with people over 50. Our
deep knowledge of this community allows
us to tailor products and services that
meet their needs, supported by
high-quality service that reinforces trust
at every interaction. As we simplify and
strengthen our operating model, these
advantages uniquely position Saga to
deliver sustainable, capital-light growth
and long-term value for shareholders.
The model works
Our model brings together a trusted brand,
deep customer insight and disciplined
financial management. Its cash-generative
nature allows us to balance investment in
growth with continued debt reduction,
giving us the resilience to navigate
market conditions and deliver strong,
long-term returns.
Confidence in future delivery
We have a clear and compelling strategy
centred on maximising the growth of our
existing businesses, driving incremental
growth through new business lines and
products, and growing our customer
base and deepening those relationships.
Alongside this, we remain focussed on
reducing debt and simplifying our
operations. Together, these priorities
give us confidence in our ability to deliver
our future plans and support our
ambition to build the most-trusted brand
for older people.
26.7m
individuals in the UK
aged over 50
5
Saga plc
Annual Report and Accounts 2026
11
Financial statements
Additional information
Governance
Strategic Report
1
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
2
From continuing operations
3
Following the Group’s corporate refinancing and subsequent revised covenant definition, the Net Debt and Leverage Ratio have been re-presented at 31 January 2025
4
Wholly owned UK subsidiaries of Ageas SA/NV
TRANSFORMING OUR
BUSINESS FOR GROWTH
Group Chief Executive Officer’s Strategic Review
“As we head into our new year, we are in
a good position. Our businesses are all
performing well and we continue the
delivery of our plans that are transforming
the outlook for the Group.”
Mike Hazell
Group Chief Executive Officer
75 years of doing things differently
I am delighted to update you on our strong
performance in the 2025/26 financial year
and the excellent progress we made in
delivering our strategic plan. The turnaround
we started two years ago is now well
advanced and the early results of the action
we have taken can be seen in our performance.
We have a long-term strategy, which is built
on our deep understanding of our customers,
and the brand principles that have, for over
three quarters of a century, made Saga the
UK’s leading business for people over 50.
Our disciplined execution of this strategy,
combined with a short-term focus on
trading performance, has meant that we
have fundamentally changed the outlook
for the Group, addressing key structural
challenges that were previously holding the
business back.
Nobody understands older people better
than Saga, and we use our 75 years of
experience to differentiate our products and
services from other businesses in ways that
matter to our customers. We work hard to do
things differently for customers whose needs
and expectations we understand.
In summary
• As a result of the strategic progress
made, we have transitioned to a
significantly lower risk, simpler and
less volatile business model.
• Alongside this, we delivered strong
trading performance across both
Travel and Insurance, with both
exceeding our initial expectations.
• We are tracking ahead of our planned
trajectory to achieve at least £100.0m
of Underlying Profit Before Tax
1
and
reduce the Leverage Ratio
1
to below
2.0x, by January 2030.
Strong financial performance
exceeding expectations
In a transitional year for Saga, I am very
pleased to be able to report a strong set
of financial results as we continued to
successfully implement our long-term
strategic plan. An outstanding performance
across our Travel business, and a return to
growth in our Insurance business translated
into an Underlying Profit Before Tax
1,2
of
£44.2m, a 19% increase on the prior year.
The Group reported an 11% growth in
Underlying Revenue
1,2
of £654.6m, with
growth across both Travel (11%) and
Insurance Broking (13%). The profit before
tax from continuing operations of £2.1m
(2025: loss of £160.2m) was impacted by the
exceptional restructuring costs we incurred
this year and brings to an end the series of
statutory losses the Group has reported
over the past seven years.
Cash flow generation is a key measure for any
business and the continued reduction in our
Net Debt
1
remained a key priority for the
Group. Our strong trading performance and
profit translated into significant cash flow
generation and a substantial reduction in
Net Debt
1
, which fell to £499.5m compared
with £592.8m
3
in the prior year, with a
Leverage Ratio
1
of 3.7x, compared with
4.4x
3
last year.
Our performance during the year places us
well on the path towards our medium-term
targets of at least £100.0m Underlying Profit
Before Tax
1
by January 2030 and a resulting
Leverage Ratio
1
of less than 2.0x. Indeed, we
are already ahead of the planned trajectory
we set out last year.
Significant strategic
transformation
Our strategic transformation is now well
underway. Since setting out our plan at the
start of the 2025/26 financial year, our key
focus has been on its delivery, which we have
been executing at pace. Our plan is on track
and we finished the year with a simplified,
more focussed, capital-light business that
is well placed to continue growing both
customer numbers and profitability.
We have now restructured our Insurance
business model and, in doing so, have
significantly reduced the risk and complexity
that previously impacted our performance.
The sale of our Insurance Underwriting
business in July 2025 meant that we no
longer take any underwriting risk. This,
combined with the launch of our 20-year
motor and home insurance Affinity
Partnership with Ageas
4
in December 2025,
allows us to reduce the level of technical,
operational and regulatory activity that
we undertake directly, and leverages the
capabilities and infrastructure that our
new insurance partner, Ageas
4
, provides.
With this more robust model in place,
we are now in a good position to grow.
Travel is now the largest driver of profits in
the Group and is central to our growth plans.
In March 2025, we combined our Cruise and
Holidays management teams, creating a
single, more effective and customer-centric
operation. The full benefits of this change will
take time to mature but we have already seen
a significant improvement in performance
and customer satisfaction, demonstrated
through the 11% year-on-year increase in
Underlying Revenue
1
from £453.9m to
£504.1m and a corresponding 37% increase
in Underlying Profit Before Tax
1
from £63.6m
to £87.2m.
Saga plc
Annual Report and Accounts 2026
12
Our long-term
strategic principles
Saga has been designing products and
services for older people throughout the
last 75 years. The deep understanding
of our customer group, together with
the experience we have in meeting their
distinct needs, is at the heart of our strategy.
Our businesses are supported by our
award-winning multi-platform Publishing
arm, and these combine to create a
sophisticated marketing operation built
on data that is unique to Saga and a critical
driver of our business decisions.
By maintaining these key principles, and by
embedding a culture and discipline across
the business that put our customers at the
forefront of decision making, we deliver
products and services in a way that is
different to other businesses.
Shorter-term strategic priorities
These enduring principles guide our decision
making, providing longer-term direction
alongside shorter-term priorities from which
we build our plans. Our current strategic
priorities comprise four key pillars.
As we deliver our transformation and create solid foundations for
long-term growth, we are driving the performance of our core
businesses, all of which are now growing. The decisions taken in each
of our businesses are now made with long-term sustainable growth
in mind and are consistent with our clear brand principles.
We believe that Saga will, in the future, offer a broader range of
products and services than it offers today, meeting the needs of older
people in ways that mass market operators do not. Our priority is to
complete the delivery of our turnaround plan, which will create the
solid financial platform for achieving our medium-term targets.
Alongside this, we will continue to lay the groundwork for new
products and services.
Our new simplified business model creates more predictable
revenues and cash flow generation and builds on our core strengths.
Our growth plan leverages our skills and our existing asset base to
deliver capital-light profit growth that, in turn, accelerates debt
reduction and deleveraging.
Central to our success is the understanding we have of our customers.
This understanding influences every aspect of our decision making.
Our customer database is at the heart of our operation, providing us
unrivalled reach. By growing the number of customers we have and
the audience we engage with, we also increase our potential and
improve our understanding of the people we serve.
1
MAXIMISING THE GROWTH OF
OUR EXISTING BUSINESSES
2
DRIVING INCREMENTAL GROWTH THROUGH
NEW BUSINESS LINES AND PRODUCTS
4
REDUCING DEBT, WHILE SIMPLIFYING
OUR OPERATIONS
3
GROWING OUR CUSTOMER BASE AND
DEEPENING THOSE RELATIONSHIPS
An update on our progress during the year across
each of our businesses is set out overleaf
Saga plc
Annual Report and Accounts 2026
13
Financial statements
Additional information
Governance
Strategic Report
£67.3m
Ocean Cruise Underlying
Profit Before Tax
5
2024/25 – £48.9m
£5.9m
River Cruise Underlying
Profit Before Tax
5
2024/25 – £4.0m
Our Ocean Cruise holidays have continued
to be extremely popular. Our smaller,
purpose-built Ocean Cruise ships offer an
experience uniquely tailored to our guests’
needs. We only depart from UK ports, and
with every passenger being provided a
chauffeur service to and from their home,
we remove the stress of flying, providing a
seamless door to deck service. Onboard, our
truly all-inclusive experience means that we
give guests the peace of mind to enjoy their
holiday without the fear of additional charges.
The results show strong repeat rates, with
64% of our guests booking a further cruise
with us. Our guests return because of the
quality of their holidays with us and we see
consistently high levels of customer
satisfaction. Our transactional net promoter
score (
tNPS
) reached an all-time end-of-year
high of 83, compared with 82 last year.
This customer focussed approach
translated into another outstanding financial
performance. Underlying Revenue
5
grew
by 12%, to £265.6m and Underlying Profit
Before Tax
5
increased 38%, to £67.3m.
We are also driving strong forward bookings
for the year ahead. At 12 April 2026, the load
factor for 2026/27 departures was 79%,
in line with the same point in the prior year,
and the per diem was £447, 13% ahead.
Our River Cruise business is also
burgeoning. Building on our experience
in Ocean Cruise, we now have four ships
offering boutique river cruises on
European rivers. Led by the same
management team, and with the
attention to detail that our Ocean Cruise
guests have come to expect, we are
generating a strong demand and driving
significantly improved customer
satisfaction. Varying river water levels
in Europe did pose some disruption this
year, however by continuing to enhance
our product and service experience we
still managed to increase our tNPS
from 60 to 69.
In July 2025, we launched the Spirit
of the Moselle. This was part of our
continued rollout of Spirit-class ships
that are purpose-built for our guests,
delivering consistently high quality. Spirit
of the Moselle has already proved very
popular and we will be adding further
Spirit-class vessels to the fleet over the
coming years. Spirit of Lorelei will launch
in 2027.
We see great potential in our River Cruise
business. In 2025/26, revenue from our
Rivers operation grew by 8%, with
Underlying Profit Before Tax
5
rising to
£5.9m, from £4.0m last year. Bookings
for 2026/27, at 12 April 2026, were ahead
of the same point last year, with a load
factor of 73% and a per diem of £372,
5ppts and 3% higher, respectively.
Group Chief Executive Officer’s Strategic Review
continued
from John
The ships are modern and
very, very comfortable.
The entertainment is superb.
Everything about it is brilliant.”
CRUISE
5
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
TRAVEL
Having combined our Cruise and Holidays leadership teams in March 2025, we now have a more
effective and cost-efficient Travel business that is delivering a consistent customer experience across
all of our travel products.
Saga plc
Annual Report and Accounts 2026
14
£14.0m
Holidays Underlying
Profit Before Tax
6
2024/25 – £10.7m
60.8k
Holidays passengers
2024/25 – 54.8k
Our Holidays business benefited during
the year from the operational changes we
made over the past couple of years, and
the more consistent customer focus the
newly combined Travel management team
have brought.
Our holidays are designed with older
customers in mind. Hotels are carefully
selected, and itineraries built to reflect the
range of pace, comfort and accessibility
that people over 50 prefer.
Product design and innovation are at the
forefront of our plans. Our nationwide
chauffeur service is extremely popular
and is now included with all our holidays
and we continue to expand our range of
special interest holidays. This year, we have
reintroduced a range of UK holidays,
including our unique university and college
stays that provide an alternative to traditional
hotels and an excellent way to explore the UK
in the summer, particularly for solo travellers.
The demand for our holidays has been
strengthening. Passenger numbers
increased in 2025/26 by 11% compared
with the prior year and Underlying Profit
Before Tax
6
increased 31%, from £10.7m
to £14.0m.
We believe that, with our market-leading
brand, compelling holiday ideas and our
customer focussed mindset (that
continues to win us both Travel awards
and customer loyalty), we are well
positioned to continue this growth.
Forward bookings for 2026/27, at
12 April 2026, were ahead of the same
point last year, with 51.6k passengers,
compared with 51.5k, and revenue of
£165.9m, a 4% increase.
from Liane
When you go on any trip with them, you are going
home from home. You’re made to feel as if you’re
a member of the wider Saga family.”
HOLIDAYS
6
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Financial statements
Additional information
Governance
Strategic Report
15
Saga plc
Annual Report and Accounts 2026
Group Chief Executive Officer’s Strategic Review
continued
£16.9m
Insurance Broking Underlying
Profit Before Tax
7
from
continuing operations
2024/25 – £14.5m
1.3m
Insurance policies in force
31 January 2025 – 1.3m
Our Insurance business has had a
transformational year, as we simplified the
operations and adopted a lower risk, less
complex business model following the sale
of our Underwriting business and the start
of our 20-year motor and home insurance
partnership with Ageas
8
(the
Affinity
Partnership
). The sale of Acromas Insurance
Company Limited in July 2025 means that
we no longer take any underwriting risk, and
the launch of the Affinity Partnership in
December 2025 removed significant
complexity from our business and teams
us up with one of the most successful
insurance businesses in Europe. This new
commission-based model means that Ageas
8
takes responsibility for the motor and home
insurance operations and the administration
of policies, while Saga focusses on our core
sales and marketing strength, working with
Ageas
8
on product design and the customer
journey. Once we have fully transferred our
motor and home business to Ageas
8
, the
pricing and underwriting risk will sit with
Ageas
8
and Saga will earn a commission-
based income stream. The customer
relationship will remain with Saga.
As we worked towards this transition
during the course of 2025/26, with the
benefit of a stronger balance sheet and a
clear strategy ahead of us, we were able to
invest in growth by improving our pricing
and refocussing our marketing strategy.
For the first time in four years, we were
able to deliver an increase in total policy
sales, with three out of our four insurance
product lines growing. While home
insurance performed ahead of
expectations, the challenging market
conditions and the drop in last year’s
policy sales drove fewer renewal
opportunities and produced a 19% drop
in home policies in force. However,
alongside this, policies in force for motor
insurance grew by 12%, and private
medical insurance sales grew by 7%.
Our refreshed travel insurance product
and the associated marketing campaign
proved hugely successful and supported
a 34% increase in policies in force.
Looking ahead to 2026/27, our priority is
to complete the final phase of the Affinity
Partnership implementation. Home new
business is due to launch by the end of
April 2026 and policy renewals for both
motor and home are due to go live later in
the year.
INSURANCE
7
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
8
Wholly owned UK subsidiaries of Ageas SA/NV
from Jackie
Their products, their
insurance, you know you
can trust them. And l think
that’s a big thing.”
Saga plc
Annual Report and Accounts 2026
16
Other Businesses
In Publishing, we continued to communicate
with many more of our customers, and more
regularly, by expanding the ways in which
we engage with them. A key development
has been the launch of our new podcast,
‘Experience is Everything’, which extends
our platform and deepens our relationship
with both our existing and new customers.
It also adds to the frequency and quality of
interactions we have with our customers
through our award-winning Saga Magazine,
newsletters and website.
In Money, we launched a new partnership
with NatWest Boxed, which will enable the
development of a suite of innovative savings
products tailored for people over 50. This
partnership combines NatWest’s scale and
expertise with our deep customer insight and
supports our strategy of broadening Saga
Money’s product range, while extending our
capital-light revenue streams. Money
reported an Underlying Profit Before Tax
9
of £0.7m, in line with the prior year.
Our people and culture
Our culture remains of fundamental
importance to our performance. In our
most recent survey, colleague engagement
improved from 7.9 to 8.1 out of 10. This would
be a strong result in any year, but in a year
when we experienced such change in our
operations, it is a testament to the culture
we have embedded and a measure of the
understanding our colleagues have in the
changes we are making. I was delighted that
our focus on creating an inclusive and
supportive working environment was
recognised externally, when Saga was
ranked 6
th
in the UK’s Best Employers
2025 list by the Financial Times.
Strong platform for long-term
sustainable growth
We have had a very successful year, delivering
an excellent trading performance and laying
the foundations for long-term sustainable
growth. Saga is a fantastic brand, recognised
and trusted by its customers throughout the
UK. Our success is built on this trust. This is
not something we take for granted but we
continually try to enhance. Our colleagues are
central to this and are the people that bring
this to life day in, day out. The progress we
made this year is down to their hard work
and dedication and my thanks go out to all
of them.
As we head into our new year, we are in a good
position. Our businesses are all performing
well and we continue the delivery of our plan
that is transforming the outlook for the
Group. Last year, we laid out our medium-term
targets of at least £100.0m Underlying Profit
Before Tax
9
by January 2030, and a resulting
Leverage Ratio
9
of below 2.0x by that time.
One year on, we are already tracking ahead of
our planned trajectory and we remain all the
more confident of reaching and exceeding
these targets.
Mike Hazell
Group Chief Executive Officer
20 April 2026
9
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Watch our Group CEO,
Mike Hazell, presenting our
full year results
Saga plc
Annual Report and Accounts 2026
17
Financial statements
Additional information
Governance
Strategic Report
Key performance indicators
DRIVING
RESULTS
During the financial year, the following key performance
indicators (
KPIs
) were used to assess the financial and operational
performance of the Group against our strategic growth plan.
Key
1
Maximising the growth of our
existing businesses
2
Driving incremental growth
through new business lines
and products
3
Growing our customer base and
deepening those relationships
4
Reducing debt, while simplifying
our operations
2025/26 bonus KPIs
1
Financial KPIs
Underlying Profit/(Loss)
Before Tax
2
from continuing
operations
£44.2m
Purpose and definition
Underlying Profit/(Loss) Before Tax
2
from continuing operations is the
Group’s primary KPI and a
meaningful representation of
underlying trading performance.
It is defined as a profit or loss
before tax from continuing
operations, excluding items which
are not expected to recur. Refer
to page 194 for full definition
and explanation.
Performance
Increase of £7.0m, or 19%, when
compared with 2024/25, reflecting
strong Travel and Insurance
performance. This was, however,
partially offset by higher interest
costs, as expected, following the
corporate refinancing at the start
of the year.
Profit/(loss) before tax from
continuing operations
£2.1m
Purpose and definition
Profit/(loss) before tax from
continuing operations as presented
in accordance with UK-adopted
international accounting standards.
Performance
Profit before tax from continuing
operations grew by £162.3m when
compared with the prior year,
returning the Group to profit for the
first time in eight years. This reflects
our positive trading performance
and the cessation of Insurance
Broking goodwill impairments that
impacted previous years’ profits.
Available Operating
Cash Flow
2
£205.9m
Purpose and definition
Available Operating Cash Flow
2
represents net cash flow from
operating activities, which is not
subject to regulatory restriction,
after capital expenditure but before
tax, interest paid, restructuring
costs and other non-trading items.
Refer to page 196 for full definition
and explanation.
Performance
Materially higher Available
Operating Cash Flow
2
as a result of
increased cash generation from
Ocean Cruise, reflecting positive
trading and the £60.0m Ageas
4
partnership consideration.
Net Debt
2
£499.5m
Purpose and definition
Net Debt
2
represents the sum of the
carrying value of the Group’s debt
facilities, less the amount of Available
Cash
2
it holds. Refer to page 196 for
full definition and explanation.
Performance
Net Debt
2
reduced by £93.3m when
compared with 31 January 2025,
reflecting continued repayments of
the Ocean Cruise ship facilities and
higher Available Cash
2
. Refer to
page 38 of the Group Chief Financial
Officer’s Review for full details.
1
Only the 2025/26 bonus KPIs which are reported at a Group level are included. Full details of the KPIs used to determine executive remuneration can be found on pages 88-90
2
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
3
Underlying Profit/(Loss) Before Tax and profit/(loss) before tax for 2025/26, 2024/25, 2023/24 and 2022/23 are reported under International Financial Reporting Standard (
IFRS
) 17
and are, therefore, not directly comparable to preceding years, which were reported under IFRS 4
4
Wholly owned UK subsidiaries of Ageas SA/NV
5
Following the Group’s corporate refinancing and revised covenant definition, Net Debt and the Leverage Ratio have been re-presented at 31 January 2025
(£6.7m)
£15.5m
3
£38.2m
3
£37.2m
3
£44.2m
3
2022/23
2023/24
2024/25
2021/22
2025/26
(£23.5m)
(£272.7m)
3
(£123.8m)
3
(£160.2m)
3
£2.1m
3
2022/23
2023/24
2024/25
2021/22
2025/26
1
1
4
£75.8m
£54.9m
£143.8m
£109.6m
£205.9m
2022/23
2023/24
2024/25
2021/22
2025/26
£729.0m
£711.7m
£637.2m
£592.8m
5
£499.5m
31 Jan 23
31 Jan 24
31 Jan 25
31 Jan 22
31 Jan 26
1
4
Saga plc
Annual Report and Accounts 2026
18
Non-financial KPIs
Ocean Cruise load factor
93%
Purpose and definition
Load factor is the most sensitive
driver of Cruise profit before tax and
represents the booked proportion
of the total capacity across our
ships. It is calculated by dividing the
number of berths booked by the
total berths available.
Performance
The Ocean Cruise load factor
increased 2ppts, to 93%, reflecting
continued strong customer demand
for our unique offering.
Holidays passengers
60.8k
Purpose and definition
Holidays passengers represents
the number of customers that
have travelled on either a Saga or
Titan holiday during a given year.
Performance
In 2025/26, the number of
passengers who travelled with us
increased 11% when compared with
the prior year, reflecting continued
growth across our escorted group
tours and hosted holidays products.
Insurance policies in force
1.3m
Purpose and definition
Insurance policies in force refers
to the number of core insurance
policies, across all products, in force
at any given financial year end.
Performance
At 31 January 2026, policies in force
were broadly flat, reflecting growth
across motor, travel and private
medical insurance but continued
constraints in home.
Customer transactional net
promoter score (
tNPS
)
67
Purpose and definition
Customer tNPS represents the
willingness of customers to
recommend Saga products and
services to family, friends and
colleagues following a recent
transaction. The score is calculated
by analysing customer survey
responses, then subtracting the
percentage of detractors
(those scoring six or less) from
the percentage of advocates
(those scoring nine or more).
Performance
Customer tNPS was 67, an
eight-point increase when
compared with the prior year,
reflecting improvements across
each of our business units.
Colleague engagement
8.1
out of 10
Purpose and definition
Colleague engagement provides an
indication of how committed and
enthusiastic colleagues are towards
Saga and their work. It is measured
through responses to colleague
surveys hosted by an independent
third party.
Performance
Colleague engagement improved
year-on-year, supported by stronger
leadership connection and more
opportunities for colleagues to
share what matters to them. These
initiatives help foster motivation,
trust and commitment across the
business and reinforce a culture
that supports collaboration and
shared purpose.
Customer consent capture
8
35%
Purpose and definition
Customer consent capture
represents the percentage of
customers asked who have
consented to receive marketing
emails from Saga, allowing us to
email them about our full range of
products and services across all our
business units. Consent is requested
during customer interactions with
our individual businesses, either on
the telephone or online.
Performance
Earlier in the year, we made the
decision to cease asking customers
for additional Group consent if they
had already provided consent to
multiple business units, to improve
the customer experience. As a result
of the changed methodology, there
is no comparable historic data.
6
Restated to exclude the passengers from our discontinued Titan third-party river cruise offering disclosed in 2023/24 Annual Report and Accounts
7
Group tNPS methodology updated to apply equal weighting across all businesses, removing volatility caused by changes in survey volumes and providing a more consistent and
representative measure of performance. As a result, the 2025/26 data is not directly comparable with previous years
8
The tracking of customer consent capture under the current methodology began in 2025/26 and, as such, no comparable data is available prior to this
75%
68%
88%
91%
93%
2022/23
2021/22
2023/24
2024/25
2025/26
1
3
47.2k
50.3k
6
54.8k
60.8k
2022/23
2023/24
2024/25
2025/26
1.7m
1.7m
1.5m
1.3m
1.3m
31 Jan 23
31 Jan 24
31 Jan 25
31 Jan 22
31 Jan 26
67
61
59
59
67
7
2022/23
2023/24
2024/25
2021/22
2025/26
3
1
1
3
1
3
1
3
8.0
7.7
6.6
7.9
8.1
Nov 22
Nov 21
Jan 24
Dec 24
Dec 25
Saga plc
Annual Report and Accounts 2026
19
Financial statements
Additional information
Governance
Strategic Report
NAVIGATING MARKETS
WITH CONFIDENCE
Market review
Saga operates in highly attractive markets, serving the fastest-growing demographic,
with significant opportunity for growth.
Travel
There were an estimated
26.7m
individuals in the UK aged
over 50 during 2025
2
…and this age group is expected
to grow faster than any other
over the next 10 years
2
2.1m
additional 50+ year-olds
by 2035
2
Predicted population growth by age group (
m
)
Our customers are at the heart of
everything we do. Saga was built on a
deep understanding of people over 50
– one of the fastest-growing and most
affluent groups in the UK
1
. As their views,
needs and priorities evolve, so do we.
Drawing on this unique insight, an extensive
customer database and growing digital
capabilities, we continually adapt our
propositions to remain relevant and
personal. Across Travel, Insurance and
our wider services, we aim to deliver value,
reassurance and exceptional experiences
that support our customers in living
confidently and feeling understood.
Our customers
Our businesses
We continue to operate in highly competitive and commoditised markets, but our deep understanding of our customers enables us
to differentiate through the exceptional experiences we deliver.
1
Office for National Statistics – Wealth and assets survey
2
Office for National Statistics – 2022-based national population projections
2.5
2.0
1.0
1.5
0.5
0
(1.0)
(0.5)
(1.5)
(2.5)
(2.0)
2025
2027
2029
2031
2033
2035
0-29-year-olds
30-49-year-olds
50+ year-olds
We provide customers with peace of mind through our motor,
home, travel and private medical insurance products.
Marketplace and position
The insurance market is very competitive, but we continue to be
well placed as a provider of insurance exclusively for customers
over 50.
Key competitors
Admiral, Hastings, LV, NFU Mutual, Direct Line and Aviva
Insurance
We provide our customers with truly all-inclusive cruises,
on board our luxury ships.
Marketplace and position
While we have a significant number of competitors in both
Ocean and River Cruise, we are the only operator to cater
exclusively for people over 50, designing itineraries and
experiences for this under-served group.
Key competitors
Fred. Olsen, Cunard, P&O Cruises, Riviera and Viking
Cruise
We offer hosted holidays, escorted group tours and
bespoke solo tours, underpinned by our unique insight into
our customers, which allows us to continually expand the
range of destinations on offer.
Marketplace and position
In a highly competitive and commoditised market, we are
one of the market-leading tour operators for people over
50 in the UK.
Key competitors
On the Beach, TUI, Trailfinders and Newmarket Holidays
Holidays
The Group’s Other Businesses combine trusted financial
solutions with rich lifestyle content, delivered across our
multi-channel platforms and our newly launched podcast.
Marketplace and position
We hold a distinct position as the only UK provider offering
financial products and services designed for people over 50,
while also publishing one of the country’s most loved and trusted
monthly lifestyle magazines.
Key competitors
Post Office, John Lewis Money, Good Housekeeping and
The Oldie
Other Businesses
Saga plc
Annual Report and Accounts 2026
20
Geopolitics
The ongoing conflict in Russia and Ukraine
and across the Middle East, combined with
tensions in parts of Central America, have
elevated geopolitical risks. We actively
monitor Foreign, Commonwealth &
Development Office notifications and will
adapt Travel itineraries, where necessary,
to ensure customer safety. There has been
a shift towards national security priorities
and a fragmentation of the global order
with tariffs, trade agreements and a more
protectionist attitude causing friction
between nations. We will continue
to monitor global and domestic factors
that impact our exposure to fluctuating
costs for oil, transportation services,
food and metals. Over the longer-term,
lower interest rates, higher government
spending and the cooling of inflation should
provide an impetus for growth.
Labour market
Rising employment costs, due to increases
in minimum wage requirements, in addition
to the uplift in employer National Insurance
contributions in 2025, contributed to labour
cost pressures, which were absorbed by
the business.
As part of our hybrid working model, we
re-opened our head office in Folkestone in
2025, providing a place for local colleagues
to work regularly and supporting our culture,
ways of working and connecting us back to
the community and local charities.
Technological changes
New technology is creating opportunities
as businesses begin using artificial
intelligence (
AI
) to deliver services and
boost productivity. This transition is
accelerating the need for reskilling,
upskilling and building more adaptable
workforces.
We will continue to adopt AI to enhance
customer services, strengthen our
workforce and improve technological
solutions. At the same time, we will remain
vigilant against cyber threats and prioritise
colleague and customer data protection.
Macroeconomic conditions
Background
The Ocean Cruise business is regulated
by the International Maritime Organization,
the Maritime and Coastguard Agency and is
a member of the Cruise Lines International
Association, the UK Chamber of Shipping
and the Association of British Travel Agents
(
ABTA
). The River Cruise and Holidays
businesses are regulated by the Civil Aviation
Authority and are a member of ABTA as well
as Accredited Agents of the International Air
Transport Association.
Our Insurance Broking and Money
businesses are regulated by the Financial
Conduct Authority (
FCA
).
Saga also complies with other regulations and
legislation including, but not limited to, the
UK General Data Protection Regulation 2021,
the Data Protection Act 2018, the Equality
Act 2010, financial crime legislation and
health and safety legislation.
Developments during the year
The UK Emissions Trading Scheme (
ETS
)
will apply to International Shipping from July
2026, although details on how it will operate
have not yet been finalised. We have, however,
considered it within our budgeting process as
part of compliance with the EU ETS and
FuelEU Maritime regulations introduced in
January 2025 to decarbonise maritime
transport.
The FCA continues to focus on improving
customer outcomes and publishing relevant
guidance. We monitor these developments
closely and welcome regulatory changes that
strengthen consumer protection, while
supporting sustainable growth for UK
businesses. During the year, we reinforced
our governance framework to ensure
Consumer Duty principles remain embedded
across our operations and reflect our
commitment to proactively manage risk
and improve accountability.
In March 2025, the FCA’s rules on operational
resilience came into effect for our Insurance
Broking and Underwriting
3
businesses. The
rules are designed to ensure that companies
can prevent, respond and recover from
operational disruptions, leading to better
business and customer outcomes. In
response, we completed several activities,
including scenario and vulnerability tests.
Other initiatives will enhance business
continuity, disaster recovery and crisis
management capabilities across all
business units.
In April 2025, parts of the Digital Markets,
Competition and Consumers Act 2024 came
into force, followed by Competition and
Markets Authority guidance. The act aims to
prevent the publication of false or misleading
reviews and improve price transparency.
In response, we implemented a Group-wide
policy for handling customer reviews and
will assess any impact on how our products
are advertised.
The Data Use and Access Act received royal
assent in June 2025 and we are closely
monitoring its rollout to evaluate any
potential impacts or opportunities.
The Economic Crime and Corporate
Transparency Act came into force on
1 September 2025 and aims to tackle
economic crime and improve transparency
over corporate entities. The act introduces
a new corporate criminal office of ‘failure
to prevent fraud’. We updated our financial
crime management framework and provided
training to colleagues to demonstrate that
reasonable steps have been taken to prevent
offences such as fraud or false accounting.
Following the Corporate Governance
Reforms, the Company has applied the
UK Corporate Governance Code 2024,
noting that provision 29 comes into effect
for financial years on or after 1 January 2026.
We will report on this in our Annual Report and
Accounts for the year ending 31 January 2027.
For more information, see page 70.
Regulatory and legislative developments
3
The sale of Saga’s Insurance Underwriting business was completed in July 2025
Saga plc
Annual Report and Accounts 2026
21
Financial statements
Additional information
Governance
Strategic Report
FOUNDATIONS FOR
LONG-TERM VALUE
Purpose and business model
Travel
Our colleagues and culture
Our colleagues are key to delivering
exceptional experiences for our customers
every day. We are committed to building a
culture that celebrates individualism and
creates a sense of belonging, empowering
our colleagues to achieve their best work.
Our brand
The Saga brand is well renowned and
trusted among people over 50 in the UK,
setting us apart in a highly competitive
market. Our focus on delivering exemplary
service provides peace of mind and
reassurance for our customers, building
trust and nurturing loyalty.
Our customers and insight
Our customers are at the heart of everything
we do. Utilising our unique insights, we are
able to understand the evolving needs of
people over 50, a fast-growing and often
under-served demographic. This
understanding allows us to develop and
refine high-quality products and services
that are specifically tailored to meet
their needs.
Proprietary data and technology
The size of our customer database, and
the depth of information we hold, is one
of the Group’s core assets. The continual
expansion and enhancement of this data
enables us to increase the frequency and
quality of the contact with our customers,
providing an opportunity to not only
attract new customers but also promote
a greater range of products and services
to our existing customers.
Our businesses leverage our core strengths to build
deeper, longer lasting relationships with our customers.
Our purpose is to deliver exceptional products and services to meet the needs of people
over 50. We draw on deep customer insights to create lasting relationships built on trust,
helping our customers feel valued and supported at every stage.
Our businesses
1
Our strengths
Holidays
What we do
We offer our customers a variety of award-winning and handcrafted
experiences, including hosted holidays, escorted group tours and special
interest holidays.
How we add value
•
We offer customers ease and reassurance through our home-to-
airport shared chauffeur service, local hosts at our hotels and flexible
dining for our bespoke getaways.
•
We tailor our holidays for our customers, working with specially
selected hotels, where the needs of our demographic are met.
Our touring holidays ensure that the tours are appropriately paced
for our customers’ abilities.
60.8k
Passengers travelled
2024/25 – 54.8k
Cruise
What we do
We provide our customers with ocean and river cruises to a wide range
of destinations on board our fleet of boutique, luxury ships.
How we add value
•
We offer customers an all-inclusive cruising experience, including
fine dining and drinks, gratuities, a chauffeur service, private balconies
with all cabins and specially selected shore excursions.
•
Customers sail with additional peace of mind through our included
travel insurance, our price promise guarantee and our ‘Love it first time’
guarantee for newcomers.
93%
Ocean Cruise load factor
2024/25 – 91%
89%
River Cruise load factor
2024/25 – 89%
1
These are our businesses which are focussed on the specific needs and wishes of our unique customer group
Supplier partnerships
We aim to develop deep, mutually
beneficial, long-term relationships with
our partners and suppliers, allowing us
to leverage their specialist expertise,
resources and capital. These partnerships
are integral to providing the best possible
products and services to our customers.
Saga plc
Annual Report and Accounts 2026
22
Saga is committed to maximising value
for our key stakeholders.
Find out more about engaging with
stakeholders on pages 24-25
Colleagues
We aim to create an environment where
every colleague can realise their full
potential, focussing on their development
and wellbeing and creating a culture that
celebrates inclusion and recognition.
Shareholders and investors
Saga is committed to creating long-term
value for our shareholders and investors
by maximising our businesses, delivering
sustainable growth and reducing our debt.
Customers
Delivering for our customers is
fundamental to everything we do. We strive
to create exceptional experiences for this
unique group every day, building trust and
providing reassurance through tailored
products and services.
Communities
Saga works to strengthen communities
through colleague volunteering schemes,
charitable giving and recognition of
colleagues’ activity in public service
contributions.
Creating value
2
Wholly owned UK subsidiaries of Ageas SA/NV
3
The number of Money customers for 2024/25 has been re-presented following a change in methodology, with the updated figure based on unique customers
Insurance
What we do
We provide our customers with tailored insurance products,
principally motor, home, private medical and travel insurance.
How we add value
•
Our motor and home insurance partnership with Ageas
2
is designed
to deliver best-in-class services to Saga customers through
differentiated products.
•
We also provide competitively priced private medical insurance and
travel insurance through our partners Bupa and Collinson
respectively.
1.3m
Insurance policies in force
31 January 2025 – 1.3m
Other Businesses
What we do
The Group’s Other Businesses offer personal finance products
through Saga Money and a range of digital and printed content
through Publishing.
How we add value
•
We offer customers easy-to-use products and services tailored
to them, with the added security and support of the Saga brand,
providing confidence and trust.
•
We combine the experience of our magazine columnists and
design team with high-profile guest exclusives, to deliver purposeful
and insightful content, which informs, inspires and entertains
our audience.
142k
Money customers
2024/25 – 145k
3
14.7m
Saga Magazine website visits
2024/25 – 7.4m
Partners and suppliers
Through our partnerships, suppliers
benefit from access to our well-known and
trusted brand, alongside knowledge and
insight into our unique customer group.
Saga plc
Annual Report and Accounts 2026
23
Financial statements
Additional information
Governance
Strategic Report
STRENGTHENING
OUR CONNECTIONS
Engaging with stakeholders
What matters to them
• Tailored products and services that
deliver value for money.
• Exceptional customer service at
every interaction.
• Clear and informative communication
delivered in the format that suits
them best.
What matters to them
• A clear strategy and understanding
of how they contribute to its delivery.
• An inclusive and welcoming environment
where individuality is valued.
• A culture that prioritises wellbeing
and supports balance.
• Open and transparent communication,
enabling colleagues to speak up and
share their feedback.
• Fair and transparent reward and
benefits.
What matters to them
• Long-term reliable relationships that
support their strategic ambitions.
• Regular and informative updates,
including two-way feedback.
• Innovation that drives simplicity and
efficiency wherever possible.
We aim to increase engagement and
become part of customers’ everyday lives.
We connect through telephone, email,
social media, the Saga Magazine,
webinars, podcasts and our Experienced
Voices panel. Satisfaction is measured at
every touchpoint using tNPS, ensuring
that feedback drives continuous
improvement.
We communicate collaboratively through
multiple channels, including our internal
platform (the Saga Hub), regular
engagement surveys, colleague
roadshows, CEO sessions, one-to-one
meetings with managers and team events.
The People Committee plays a key role in
ensuring colleague feedback informs
decisions, helping us continuously improve
the colleague experience.
Find out more in our 2026
ESG Report
Our relationships with our supply chain
are managed and controlled by our
individual business units and governed by
our Supplier Relationship Management
and Supplier Risk Management policies.
These frameworks ensure consistent
communication and collaboration,
enabling us to strengthen partnerships
and continuously improve ways of working
across our operations.
How we engage
How we engage
How we engage
The Board receives regular reports from
the Group Chief Executive Officer (
CEO
),
Operating Board and management,
ensuring that insights and feedback
inform strategic decisions.
Gemma Godfrey, one of our
Non-Executive Directors, is our
nominated People Champion and attends
our People Committee meetings,
alongside our Group CEO and members
of our Operating Board. The Board is also
kept informed through updates from
our Chief People Officer.
Find out more about our
colleague stories
The Audit and Risk Committee is kept
informed of any changes to supplier risk
management through our Operating
Board and Internal Audit and Assurance
Director, with matters escalated to the
Board as appropriate.
Board oversight
Board oversight
Board oversight
Our colleagues and culture are central to
Saga’s success. Guided by our values, we
create an inclusive environment where
everyone can thrive, be themselves and
make a difference.
To deliver exceptional experiences for our
customers every day, we rely on the support
of our partners and suppliers. We continue
to prioritise building long-term, mutually
beneficial relationships that enable us to
deliver quality and innovation.
Our customers remain at the heart of
our business. Our success relies upon
attracting new customers and
strengthening our relationships with
those who already trust us.
Customers
Partners
and suppliers
Colleagues
Saga plc
Annual Report and Accounts 2026
24
What matters to them
What matters to them
What matters to them
• Clear and open communication
about our strategy, plans and
potential impacts.
• The opportunity to share what is
important to them and how we can
support them.
• A chance to share knowledge and
skills between our colleagues and the
wider community.
• Consistent creation of long-term value.
• Active engagement with the Group CEO,
Group Chief Financial Officer (
CFO
)
and Investor Relations (
IR
) team.
• Regular updates on the Group’s
financial performance and progress
against our strategy.
• Proactive and transparent
communication.
• Protection of our customers and the
industries we operate in.
• Increasing the trust of the public and
encouraging market competition.
We hold community meetings to provide
updates on developments that may
impact them. Meanwhile, colleagues are
encouraged to take one paid volunteering
day each year, to support causes that
matter most to them and strengthen ties
with local communities.
167
days of colleague volunteering time
in 2025/26
We maintain frequent communication
through results announcements, press
releases, updates on our corporate and
shareholder websites, group events
and one-to-one meetings. Additional
engagement occurs via ad hoc email and
telephone conversations, ensuring
investors remain informed and have
opportunities to provide feedback.
133k
direct and corporate sponsored
nominee shareholders
Relationships with regulators are
managed at subsidiary level and overseen
by the audit and risk and compliance
committees. This approach ensures
consistent communication, adherence
to regulatory requirements and timely
escalation of any issues, supporting our
commitment to integrity and compliance
across all regulated businesses.
How we engage
How we engage
How we engage
Our Group CEO attends each community
meeting, allowing him to feedback directly
to the Board.
Find out more in our 2026
ESG Report
At each Board meeting, an IR report is
considered. This provides an update on
shareholder interaction and feedback
received. Our Group CEO and Group CFO
meet with investors regularly, assisted by
our Director of IR and Treasury. Alongside
this, our Non-Executive Chairman is
available on request and the Chair of our
Remuneration Committee meets with
shareholders throughout the year,
providing the Board with any feedback.
In-person events such as the Annual
General Meeting and results presentations
also provide an opportunity for the Board
to meet with shareholders and investors.
Subsidiary boards, and their committees,
report as necessary to the Audit and Risk
Committee, which is responsible for
escalating any matters of strategic or
reputational importance directly to
the Board.
Find out more in our Audit and Risk
Committee Report on pages 75-79
Board oversight
Board oversight
Board oversight
To fulfil our purpose and best serve the
needs of people over 50, we carefully
consider the impact of every decision
we make and strive to build meaningful
connections with the communities
we support.
We remain focussed on delivering our
strategic plan to create long-term,
sustainable value for shareholders and
investors. We are committed to fair
treatment and providing opportunities
for them to share their views.
Our regulators set the framework
within which we operate, making it vital
that we maintain strong, transparent
relationships built on trust and compliance.
Communities
Shareholders
and investors
Regulators
Saga plc
Annual Report and Accounts 2026
25
Financial statements
Additional information
Governance
Strategic Report
1
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
2
From continuing operations
3
Wholly owned UK subsidiaries of Ageas SA/NV
4
Following the Group’s corporate refinancing and subsequent revised covenant definition, the Net Debt and the Leverage Ratio have been re-presented at 31 January 2025
5
Certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed, advised or controlled by HPS Investment Partners, LLC or its subsidiaries
POSITIONING SAGA
FOR SUCCESS
Group Chief Financial Officer’s Review
“Following the momentum over
the past 12 months, there is a clear
opportunity for material growth
in the future.”
Mark Watkins
Group Chief Financial Officer
£44.2m
Underlying Profit Before Tax
1
from continuing operations
2024/25 – £37.2m
£499.5m
Net Debt
1
2024/25 – £592.8m
4
I am pleased to report that, for the 12 months
ended 31 January 2026, the Group delivered
a strong set of financial results, returning the
Group to profit for the first time in eight
years. From continuing operations,
Underlying Profit Before Tax
1
was £44.2m,
19% higher than the year before, despite
higher finance costs as expected, reflecting
a strong trading performance across both
Travel and Insurance Broking.
Our Travel businesses had an excellent year,
each delivering a step change in earnings.
In Ocean Cruise, continued customer
demand supported consistently high load
factors and growing per diems, resulting in
a 38% increase in Underlying Profit Before
Tax
1
, to £67.3m. River Cruise also performed
strongly, reporting a 48% increase in
Underlying Profit Before Tax
1
, to £5.9m,
driven by growing demand and the addition
of our newest River Cruise ship, Spirit of the
Moselle in July 2025. Holidays reported an
Underlying Profit Before Tax
1
of £14.0m,
up 31% from £10.7m in 2024/25, supported
by increased passenger numbers and the
efficiency savings from the combination
of our Travel businesses under a single
management team.
Insurance Broking also performed well,
and traded ahead of expectations, with
three of our four insurance products
returning to policy growth. As a result,
Underlying Profit Before Tax
1,2
grew 17%
year-on-year, to £16.9m.
The Group reported a profit before tax from
continuing operations of £2.1m, compared
with a loss before tax of £160.2m in the prior
year, which included an impairment of
Insurance Broking goodwill of £138.3m.
At the start of the year, we completed
the refinancing of the Group’s corporate
debt with a £335.0m term loan due
in January 2031, providing a more
stable long-term funding structure.
In summary
• Return to profit following strong trading
in Travel and Insurance Broking.
• Significant Net Debt
1
reduction, now
below £500.0m, alongside an improved
Leverage Ratio
1
of 3.7x.
• Ahead of original plan to deliver at least
£100.0m of Underlying Profit Before
Tax
1
and Leverage Ratio
1
of 2.0x by
January 2030.
To manage interest rate exposure, the
Group fully hedged the term loan using
interest rate derivatives, with hedging
in place until August 2028.
Debt reduction continues to be a key
strategic priority for the Group and the
strong trading performance in Travel and
Insurance Broking, resulted in strong cash
generation, alongside the net proceeds from
the sale of our Insurance Underwriting
business to Ageas
3
, which delivered £21.4m
more cash than originally expected, due to
the business performance, prior to the sale
completion being better than anticipated.
Net Debt
1
at 31 January 2026 reduced to
£499.5m, £93.3m lower than the £592.8m
4
reported at the same point last year, with the
Leverage Ratio
1
improving to 3.7x. Both the
Net Debt
1
and Leverage Ratio
1
exclude the
£60.0m received from Ageas
3
as a result
of the Affinity Partnership, which will
temporarily further reduce Net Debt
1
in
the short term, pending a corresponding
unwinding of working capital in 2026/27.
The Group remained highly cash-generative,
delivering Available Operating Cash Flow
1
of £205.9m, compared with £109.6m in the
prior year, supported by stronger cash
generation in Ocean Cruise and the £60.0m
receipt from Ageas
3
following the launch
of the Insurance Broking Affinity Partnership.
The Group’s available liquidity at year end
comprised £189.7m of Available Cash
1
,
the £116.6m undrawn delayed-draw term
loan (
DDTL
) provided by HPS Funds
5
and
the £33.4m undrawn Revolving Credit
Facility (
RCF
).
Following the momentum over the past
12 months, there is a clear opportunity
for material growth in the future. With
performance ahead of expectations, we
remain confident in delivering at least
£100.0m of annual Underlying Profit Before
Tax
1
, while reducing the Leverage Ratio
1
to
below 2.0x, by January 2030.
Saga plc
Annual Report and Accounts 2026
26
Group income statement
12m to January 2026
12m to January 2025
£m
Continuing
operations
Discontinued
operations
Total
Change
Continuing
operations
Discontinued
operations
Total
Underlying Revenue
6
654.6
60.4
715.0
(6.9%)
588.6
179.6
768.2
Underlying Profit Before Tax
6
Travel
87.2
–
87.2
37.1%
63.6
–
63.6
Insurance Broking (earned)
16.9
(0.4)
16.5
14.6%
14.5
(0.1)
14.4
Insurance Underwriting
–
15.6
15.6
45.8%
–
10.7
10.7
Total Insurance
16.9
15.2
32.1
27.9%
14.5
10.6
25.1
Other Businesses and Central Costs
(16.8)
–
(16.8)
(18.3%)
(14.2)
–
(14.2)
Net finance costs
7
(43.1)
–
(43.1)
(61.4%)
(26.7)
–
(26.7)
Underlying Profit Before Tax
6
44.2
15.2
59.4
24.3%
37.2
10.6
47.8
Impairment of Insurance Broking goodwill
–
–
–
100.0%
(138.3)
–
(138.3)
Other exceptional items
(42.1)
(12.8)
(54.9)
(8.5%)
(59.1)
8.5
(50.6)
Profit/(loss) before tax
2.1
2.4
4.5
103.2%
(160.2)
19.1
(141.1)
Income tax credit/(expense)
2.0
(2.9)
(0.9)
96.2%
(18.5)
(5.3)
(23.8)
Profit/(loss) for the year
4.1
(0.5)
3.6
102.2%
(178.7)
13.8
(164.9)
Earnings/(loss) per share
Underlying Earnings Per Share
6
30.6p
10.5p
41.1p
77.2%
18.1p
5.1p
23.2p
Earnings/(loss) per share
2.9p
(0.4p)
2.5p
102.1%
(127.2p)
9.8p
(117.4p)
The Group’s business model is based on
providing high-quality and differentiated
products to its target demographic,
predominantly focussed on travel and
insurance. The Travel businesses comprise
Ocean Cruise, River Cruise and Holidays.
The Insurance business operates mainly as a
broker, sourcing underwriting capacity from
selected third-party insurance companies,
and, for motor and home, also from the
Group’s in-house underwriter until the sale of
Acromas Insurance Company Limited (
AICL
)
to Ageas
8
, which completed on 1 July 2025.
Other Businesses include Money, Publishing
and CustomerKNECT, a mailing and printing
business.
Underlying Revenue
6
Underlying Revenue
6
decreased 6.9% to
£715.0m (2025: £768.2m), mainly due to
lower revenue in the Group’s discontinued
Insurance Underwriting business.
Underlying Profit Before Tax
6
The Group generated a total Underlying
Profit Before Tax
6
of £59.4m in the current
year, compared with £47.8m in the prior year.
This is primarily due to:
•
£23.6m increase in Travel, moving to an
Underlying Profit Before Tax
6
of £87.2m
(2025: £63.6m), with £18.4m driven by
Ocean Cruise;
•
Underlying Profit Before Tax
6
in Insurance
Broking of £16.5m (2025: £14.4m); and
•
Underlying Profit Before Tax
6
in Insurance
Underwriting of £15.6m (2025: £10.7m).
6
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
7
Net finance costs exclude Travel and Insurance Underwriting finance costs and Travel net fair value losses on derivatives
8
Wholly owned UK subsidiaries of Ageas SA/NV
Operating performance
Net finance costs
7
in the year were £43.1m
(2025: £26.7m), which excludes finance
costs within the Travel business of £15.4m
(2025: £18.4m) and Insurance Underwriting
business of £3.0m (2025: £8.8m). The
increase, as expected, was predominantly
driven by the refinancing of the Group’s
corporate debt at the beginning of the year
at materially higher interest rates.
Saga plc
Annual Report and Accounts 2026
27
Financial statements
Additional information
Governance
Strategic Report
Profit/(loss) before tax
The profit before tax for the year, of £4.5m,
includes a net negative of other exceptional
items of £54.9m, consisting of:
Continuing operations
•
costs relating to the transition to the
20-year partnership for motor and home
insurance with Ageas
9
(the
Affinity
Partnership
) of £13.9m;
•
restructuring costs of £21.5m;
•
costs and fees associated with the Group’s
previous corporate debt, including
accelerated amortisation of fees relating to
the loan facility provided by Roger De Haan,
totalling £7.6m;
•
fair value losses of £0.7m on derivatives;
•
a negative International Financial Reporting
Standard (
IFRS
) 16 ‘Leases’ accounting
adjustment of £0.9m on River Cruise ships;
•
£0.5m Ocean Cruise dry dock costs;
•
impairments to non-financial assets of
£1.9m;
•
foreign exchange losses on River Cruise
ship leases of £0.8m;
•
a net negative modification to Travel
breakage policy of £2.6m;
•
onerous contract provisions net positive
of £1.3m on three-year fixed-price policies;
and
•
release of deferred income associated with
motor and home three-year fixed-price
policies of £7.0m.
Discontinued operations
•
onerous contract provisions net negative
of £4.3m on insurance contracts under
IFRS 17 ‘Insurance Contracts’;
•
restructuring costs of £0.4m;
•
loss on disposal of subsidiaries of £10.2m,
relating to the disposal of the Insurance
Underwriting business, which includes the
release of the positive written to earned
adjustment following the sale of the
Insurance Underwriting business of £3.6m;
•
a £0.1m negative change in discount rate
on non-periodical payment order (
PPO
)
insurance liabilities; and
•
fair value gains on debt securities of £2.2m.
The loss before tax in the prior year, of
£141.1m, includes a £138.3m impairment to
Insurance Broking goodwill and a net negative
of other exceptional items of £50.6m,
consisting of:
Continuing operations
•
impairments to non-financial assets, other
than goodwill, of £24.5m, including software
assets that no longer drive economic
benefit to the Group following the
transition to the Insurance Broking
partnership with Ageas
9
;
•
restructuring costs of £28.4m, including
a provision for the expected costs of
restructuring the Group’s Insurance
Broking operations, ahead of the Ageas
9
partnership becoming operational;
•
costs and amortisation of fees relating to
the loan facility provided by Roger De Haan
of £3.5m;
•
fair value losses of £0.3m on derivatives;
•
a negative IFRS 16 lease accounting
adjustment of £0.5m on River Cruise ships;
•
£1.7m additional Ocean Cruise dry dock
costs and customer compensation relating
to Spirit of Adventure;
•
profit share due to AXA on cessation of the
private medical insurance (
PMI
) contract
of £2.6m;
•
foreign exchange gains on River Cruise ship
leases of £0.6m; and
•
onerous contract provisions net positive of
£1.8m on three-year fixed-price policies.
Discontinued operations
•
impairments to non-financial assets of
£6.3m;
•
restructuring costs of £3.9m;
•
onerous contract provisions net positive
of £13.0m on insurance contracts under
IFRS 17;
•
fair value gains on debt securities of £5.1m;
and
•
a £0.6m positive change in discount rate
on non-PPO insurance liabilities.
Group Chief Financial Officer’s Review
continued
£2.1m
Profit/(loss) before tax from
continuing operations
2024/25 – (£160.2m)
Income tax
The Group’s income tax expense for the year
was £0.9m (2025: £23.8m), representing a
positive tax effective rate of 20.0% (2025:
negative 850.0%), excluding the Insurance
Broking goodwill impairment charge. In both
the current and prior periods, the difference
between the Group’s tax effective rate and
the standard rate of corporation tax was
mainly due to the Group’s Ocean Cruise
business being in the tonnage tax regime.
In addition, in the current year and prior year,
it is also due to all temporary differences at
31 January 2026 and 31 January 2025 not
being considered recoverable and, therefore,
no deferred tax assets were recognised for
these temporary differences. This is the
result of the change in mix of profitability
within the Group, where the majority of the
Group’s profits now come from the Ocean
Cruise business, whereas the Insurance
Broking business has been in decline.
There was also an adjustment in the current
year for the under-provision of prior-year tax
of £0.9m debit (2025: £nil). Excluding the
impact of the Ocean Cruise business being
in the tonnage tax regime, the Insurance
goodwill impairment, the adjustments to
prior-year tax and the non-recognition of net
deferred tax assets, the tax effective rate for
the current year is 16.0% (2025: 21.4%).
Earnings/(loss) per share
The Group Underlying Basic Earnings
Per Share
10
was 41.1p (2025: 23.2p).
The Group’s reported basic earnings per
share was 2.5p (2025: loss of 117.4p).
9
Wholly owned UK subsidiaries of Ageas SA/NV
10
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Saga plc
Annual Report and Accounts 2026
28
Ocean Cruise
The Ocean Cruise business owns two Ocean
Cruise ships, Spirit of Discovery and Spirit
of Adventure.
The business achieved a load factor of 93%
(2025: 91%) and a per diem of £394
(2025: £357). These two factors, when
combined, equated to Underlying Revenue
11
growth of 12.2% and a 37.6% increase in
profitability, from an Underlying Profit Before
Tax
11
of £48.9m in the prior year, to £67.3m in
the current year.
River Cruise
At the beginning of the year, the River Cruise
business had 10-year charters in place for
two boutique purpose-built River Cruise
ships, Spirit of the Rhine and Spirit of the
Danube, alongside one other shorter-term
charter. In July 2025, the business took
delivery of its third boutique purpose-built
River Cruise ship, Spirit of the Moselle, which
is also a 10-year charter.
The business achieved a load factor of 89%
(2025: 89%) and a per diem of £350
(2025: £326). This resulted in Underlying
Revenue
11
growth of 8.1% and a 47.5%
increase in Underlying Profit Before Tax
11
,
to £5.9m (2025: £4.0m).
Holidays
The Holidays business, which includes both
the Saga Holidays and Titan brands,
increased volumes when compared with the
prior year, with passenger numbers
increasing from 54.8k to 60.8k. The revenue
per passenger was broadly flat at £3,044
(2025: £3,062), driven by a passenger
preference towards travel to Europe over
long-haul destinations due to the current
geopolitical environment.
This led to Underlying Revenue
11
growth of
10.3% and an increase in profitability, from
an Underlying Profit Before Tax
11
of £10.7m in
the prior year, to £14.0m in the current year.
12m to January 2026
12m to January 2025
£m
Ocean
Cruise
River
Cruise
Holidays
Total
Travel
Change
Ocean
Cruise
River
Cruise
Holidays
Total
Travel
Underlying Revenue
11
265.6
53.4
185.1
504.1
11.1%
236.7
49.4
167.8
453.9
Gross profit
114.2
16.6
46.1
176.9
14.5%
97.7
15.1
41.7
154.5
Marketing expenses
(15.0)
(6.3)
(12.7)
(34.0)
(11.8%)
(13.8)
(5.7)
(10.9)
(30.4)
Other operating expenses
(16.6)
(4.9)
(20.8)
(42.3)
3.0%
(16.6)
(5.8)
(21.2)
(43.6)
Investment return
–
0.5
1.5
2.0
33.3%
–
0.4
1.1
1.5
Finance costs
(15.3)
–
(0.1)
(15.4)
16.3%
(18.4)
–
–
(18.4)
Underlying Profit Before Tax
11
67.3
5.9
14.0
87.2
37.1%
48.9
4.0
10.7
63.6
Average revenue per passenger (£)
6,009
3,051
3,044
4,115
3.7%
5,543
2,923
3,062
3,968
Ocean Cruise load factor
93%
93%
2ppts
91%
91%
Ocean Cruise per diem (£)
394
394
10.4%
357
357
Ocean Cruise capacity days (’000)
704
704
(0.1%)
705
705
Ocean Cruise revenue per capacity
day (£)
377
377
12.2%
336
336
River Cruise load factor
89%
89%
–
89%
89%
River Cruise per diem (£)
350
350
7.4%
326
326
River Cruise capacity days (’000)
147
147
0.7%
146
146
River Cruise revenue per capacity
days (£)
363
363
7.4%
338
338
Passengers (’000)
44.2
17.5
60.8
122.5
7.1%
42.7
16.9
54.8
114.4
Our Travel business comprises our Ocean Cruise, River Cruise and Holidays operations.
Travel
£67.3m
Ocean Cruise Underlying
Profit Before Tax
11
2024/25 – £48.9m
£5.9m
River Cruise Underlying
Profit Before Tax
11
2024/25 – £4.0m
£14.0m
Holidays Underlying
Profit Before Tax
11
2024/25 – £10.7m
11
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Saga plc
Annual Report and Accounts 2026
29
Financial statements
Additional information
Governance
Strategic Report
Group Chief Financial Officer’s Review
continued
Travel
continued
Current year departures
12 April 2026
Change
13 April 2025
Ocean Cruise revenue (£m)
256.2
16.4%
220.1
Ocean Cruise load factor
79%
–
79%
Ocean Cruise per diem (£)
447
12.6%
397
River Cruise revenue (£m)
52.6
27.1%
41.4
River Cruise load factor
73%
5ppts
68%
River Cruise per diem (£)
372
3.0%
361
Holidays revenue (£m)
165.9
4.0%
159.5
Holidays passengers (’000)
51.6
0.2%
51.5
Forward Travel sales
Ocean Cruise bookings for 2026/27 continue
to show sustained momentum, with a load
factor in line with the same point last year.
The per diem for 2026/27 is ahead of the
same period last year, by 12.6%, reflecting
continued customer demand.
River Cruise also continues to perform well.
For 2026/27, the load factor is 5ppts ahead
of the same point last year, driven by a stable
first-half performance and a stronger second
half. Customer demand is particularly strong
for Spirit of the Danube, with the newest
addition to the fleet, Spirit of the Moselle, also
seeing encouraging uptake. The per diem for
the full year is 3.0% ahead, reflecting strong
customer demand.
Holidays bookings for 2026/27 remain ahead
of the same point last year, with revenue up
4.0% and passengers up 0.2%. Within this,
hosted stays continue to grow year-on-year.
Travel bookings for 2027/28, across Cruise
and Holidays, reflect a strong revenue
position that is 2.3% ahead of the same time
last year.
from Nick
To be picked up from home
and to not really need your
wallet at all, from start to finish,
l would heartily recommend it.”
Saga plc
Annual Report and Accounts 2026
30
12
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
13
Wholly owned UK subsidiaries of Ageas SA/NV
12m to January 2026
12m to January 2025
£m
Motor
broking
Home
broking
Other
broking
Total
Change
Motor
broking
Home
broking
Other
broking
Total
Gross Written Premiums
12
279.6
132.9
139.5
552.0
(4.0%)
294.2
155.1
125.5
574.8
Broker revenue
7.0
11.8
46.0
64.8
9.5%
13.1
6.2
39.9
59.2
Instalment revenue
5.0
3.2
–
8.2
20.6%
3.3
3.5
–
6.8
Add-on revenue
8.2
5.9
–
14.1
(6.0%)
7.2
7.7
0.1
15.0
Other revenue
30.6
14.0
0.7
45.3
24.1%
25.2
15.7
(4.4)
36.5
Written Underlying Revenue
12
50.8
34.9
46.7
132.4
12.7%
48.8
33.1
35.6
117.5
Written gross profit
45.8
34.9
48.3
129.0
9.3%
42.1
33.1
42.8
118.0
Marketing expenses
(16.5)
(5.6)
(10.4)
(32.5)
(55.5%)
(9.1)
(6.0)
(5.8)
(20.9)
Written Gross Profit After
Marketing Expenses
12
29.3
29.3
37.9
96.5
(0.6%)
33.0
27.1
37.0
97.1
Other operating expenses
(79.9)
3.7%
(83.0)
Written Underlying Profit
Before Tax
12
16.6
17.7%
14.1
Written to earned adjustment
(0.1)
(133.3%)
0.3
Earned Underlying Profit
Before Tax
12
16.5
14.6%
14.4
Policies in force
675k
412k
207k
1,294k
1.6%
602k
506k
166k
1,274k
Policies sold
734k
441k
211k
1,386k
2.6%
655k
528k
168k
1,351k
Reconciliation to continuing
operations:
Earned Underlying Profit
Before Tax
12
16.5
14.6%
14.4
Written Underlying Profit Before Tax
12
from discontinued operations
0.3
(25.0%)
0.4
Written to earned adjustment
0.1
133.3%
(0.3)
Underlying Profit Before Tax
12
from continuing operations
16.9
16.6%
14.5
Insurance Broking
The Insurance Broking business provides
tailored insurance products, principally motor,
home, PMI and travel insurance. Its role is to
price the policies and source the lowest risk
price, whether through the panel of motor
and home underwriters or through solus
arrangements for PMI and travel insurance.
Until its sale to Ageas
13
on 1 July 2025,
the Group had an in-house insurer, AICL,
sitting on the motor and home panels,
which competed for that business with
other panel members on equal terms.
AICL offered its underwriting capacity
on the home panel through a coinsurance
deal with a third party, so the Group took
no underwriting risk for that product.
Even if underwritten by a third party,
the offering is presented as a Saga product
and the Group manages the customer
relationship. AICL continues to sit on the
motor and home panels following its sale.
Insurance
Insurance encompasses our motor, home and other broking operations and our in-house
Insurance Underwriting business.
Insurance Broking
Saga plc
Annual Report and Accounts 2026
31
Financial statements
Additional information
Governance
Strategic Report
Insurance Broking
continued
Insurance Broking written Underlying Profit
Before Tax
14
, which excludes the impact of the
written to earned adjustment deferring the
revenue on policies underwritten over the
term of the policy, increased to £16.6m, from
£14.1m in the prior year. Underlying Profit
Before Tax
14
from continuing operations
increased to £16.9m from £14.5m. The
written to earned adjustment is no longer
required following the sale of the Insurance
Underwriting business to Ageas
15
on 1 July
2025, as the Group ceased to underwrite any
insurance policies, so it no longer has to
spread revenue on underwritten policies over
the life of the insurance policy.
A key metric for the Insurance Broking
business is Written Gross Profit After
Marketing Expenses
14
, before deducting
overheads. This reduced from £97.1m in the
prior year, to £96.5m in the current year,
mainly due to lower new business margins
on motor and lower volumes on home.
This was partially offset by higher renewal
margins on motor and home and by an
improved performance of the PMI product.
Written Gross Profit After Marketing
Expenses
14
fell by £3.7m in motor, partially
offset by increases in home of £2.2m and
other broking of £0.9m.
For motor and home insurance, in terms
of the total Written Gross Profit After
Marketing Expenses
14
, the new business
proportion reduced by £14.3m and the
renewal proportion increased by £12.8m.
The three-year fixed-price product remains
significant, with 422k policies sold in the
current year, compared with 518k policies
in the prior year. This represented 36% of
total motor and home policies (2025: 44%),
with 27% of direct new business customers
taking the product (2025: 29%). These
policies remain highly attractive to our
customer base.
The average gross margin per policy for
motor and home combined, calculated as
Written Gross Profit After Marketing
Expenses
14
divided by the number of policies
sold, reduced to £49.9 in the current year,
compared with £50.8 in the prior year.
In addition, customer retention for motor and
home increased from 77% to 85%, overall
motor and home policies in force decreased
2% when compared with 31 January 2025,
and direct new business sales decreased
12ppts to 33% as the Group rebalanced
volumes towards price-comparison website
distribution channels.
Written profit and gross margin per policy
for motor and home are stated after allowing
for deferral of part of the revenues from
three-year fixed-price products, which is then
recognised in profit or loss when the option
to renew those policies at a predetermined
fixed price is exercised or lapses, recognising
the inflation risk inherent in these products.
At 31 January 2026, £1.8m (2025: £8.9m)
of income had been deferred in relation to
three-year fixed-price products. The
reduction is due to the Affinity Partnership
with Ageas
15
, with the responsibility of the
renewal of Saga-branded motor and home
policies transferring to Ageas
15
, meaning
that all previously deferred revenues on
three-year fixed-price products will be
released prior to renewals going live as part
of the Affinity Partnership.
14
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
15
Wholly owned UK subsidiaries of Ageas SA/NV
£16.6m
Insurance Broking Written
Underlying Profit Before Tax
14
2024/25 – £14.1m
£49.9
Motor and home margin
per policy
2024/25 – £50.8
Group Chief Financial Officer’s Review
continued
Motor broking
Gross Written Premiums
14
decreased 5.0%
due to a 15.2% decrease in average
premiums, partially offset by a 12.1% increase
in core policies sold.
Written Gross Profit After Marketing
Expenses
14
was £29.3m (2025: £33.0m),
contributing £39.9 per policy (2025: £50.4
per policy). Lower new business margins
and a 4.8% reduction in renewal policies sold
were partially offset by an increase in renewal
margins and an 80.3% increase in new
business policies sold.
Home broking
Gross Written Premiums
14
decreased 14.3%
due to a 16.5% reduction in core policies sold,
partially offset by a 2.5% increase in average
premiums.
Written Gross Profit After Marketing
Expenses
14
was £29.3m (2025: £27.1m),
equating to £66.4 per policy (2025: £51.3 per
policy). The increase in written gross profits
was mainly due to higher renewal margins.
Other broking
Other broking primarily comprises PMI and
travel insurance.
Gross Written Premiums
14
increased 11.2%
as a result of an increase in policy sales to 176k
(2025: 131k) in travel insurance and to 33k
(2025: 30k) in PMI.
The PMI product performed well, with
commissions and profit share leading to
Written Gross Profit After Marketing
Expenses
14
increasing by £4.7m.
Written Gross Profit After Marketing
Expenses
14
relating to travel insurance
products decreased by £0.9m, mainly as a
result of a reduction to new business margins.
Saga plc
Annual Report and Accounts 2026
32
16
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
17
Wholly owned UK subsidiaries of Ageas SA/NV
Insurance Underwriting (classified as a discontinued operation)
12m to January 2026
12m to January 2025
£m
Gross
Re-
insurance
Net
Gross
change
Gross
Re-
insurance
Net
Insurance Underlying Revenue
16
A
64.2
(4.7)
59.5
(67.0%)
194.5
(17.1)
177.4
Incurred claims (current year)
B
(50.5)
2.8
(47.7)
64.7%
(143.1)
(5.3)
(148.4)
Claims handling costs in relation to
incurred claims
C
(6.3)
–
(6.3)
64.6%
(17.8)
–
(17.8)
Changes to liabilities for incurred claims
(prior year)
D
17.8
(3.7)
14.1
(66.1%)
52.5
(41.2)
11.3
Other incurred insurance service expenses
E
(4.8)
–
(4.8)
61.3%
(12.4)
–
(12.4)
Insurance service result
20.4
(5.6)
14.8
(72.3%)
73.7
(63.6)
10.1
Net finance (expense)/income from
(re)insurance (excludes impact of change
in discount rate on non-PPO liabilities)
(4.9)
1.9
(3.0)
70.8%
(16.8)
8.0
(8.8)
Investment return (excludes fair value gains
on debt securities)
3.8
–
3.8
(59.6%)
9.4
–
9.4
Underlying Profit Before Tax
16
19.3
(3.7)
15.6
70.9%
66.3
(55.6)
10.7
Reported loss ratio
(B+D)/A
50.9%
56.5%
(4.3ppts)
46.6%
77.3%
Expense ratio
(C+E)/A
17.3%
18.7%
(1.8ppts)
15.5%
17.0%
Reported combined operating ratio (
COR
)
(B+C+D+E)/A
68.2%
75.1%
(6.1ppts)
62.1%
94.3%
Current year COR
(B+C+E)/A
96.0%
98.8%
(6.9ppts)
89.1%
100.7%
Number of earned policies
163k
(66.5%)
487k
The Group’s in-house underwriter, AICL,
was sold to Ageas
17
on 1 July 2025 but
continues to underwrite around 60% of the
motor business sold by Insurance Broking,
alongside a smaller proportion of business
on other panels. Alongside this, AICL
underwrites a portion of Saga’s home panel.
Gross insurance Underlying Revenue
16
in the
current year decreased 67.0% to £64.2m
(2025: £194.5m), reflecting a 66.5%
reduction in the number of earned policies
underwritten by AICL while being part of the
Group, due to the sale of AICL to Ageas
17
on
1 July 2025. This was also a 1.4% decrease in
average earned premiums.
The gross insurance service result was in line
with expectations, with a 6.9ppt decrease in
the current year gross combined operating
ratio (
COR
) to 96.0% (2025: 89.1%). After
allowing for reinsurance arrangements, this
increased slightly to 98.8% (2025: 100.7%).
The improved net year-on-year result
reflects the entering of a new profitable quota
share aggregation period, with the motor
surplus generated during the current year
shared with reinsurance partners.
£15.6m
Insurance Underwriting
Underlying Profit Before Tax
16
2024/25 – £10.7m
96.0%
Gross current year COR
2024/25 – 89.1%
Saga plc
Annual Report and Accounts 2026
33
Financial statements
Additional information
Governance
Strategic Report
18
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Group Chief Financial Officer’s Review
continued
£0.3m
Other Businesses Underlying
Profit Before Tax
18
2024/25 – £0.4m
(£23.8m)
Central Costs
2024/25 – (£24.4m)
The Group’s Other Businesses include
Money, Publishing and CustomerKNECT.
Underlying Profit Before Tax
18
for Other
Businesses, when combined, reduced by
£0.1m, from a £0.4m Underlying Profit
Before Tax
18
in the prior year to £0.3m in
the current year.
Central operating expenses reduced
to £23.8m (2025: £24.4m). Gross
administration costs, before Group
recharges, decreased by £2.1m in the year.
12m to January 2026
12m to January 2025
£m
Other
Businesses
Central
Costs
Total
Change
Other
Businesses
Central
Costs
Total
Underlying Revenue
18
Money
6.1
–
6.1
8.9%
5.6
–
5.6
Publishing and CustomerKNECT
11.3
–
11.3
(18.7%)
13.9
–
13.9
Other
–
1.5
1.5
100.0%
–
–
–
Total Underlying Revenue
17.4
1.5
18.9
(3.1%)
19.5
–
19.5
Gross profit
5.4
3.6
9.0
(30.8%)
6.9
6.1
13.0
Operating expenses
(5.1)
(23.8)
(28.9)
6.5%
(6.5)
(24.4)
(30.9)
Investment income
–
3.1
3.1
(16.2%)
–
3.7
3.7
Net finance costs
–
(43.1)
(43.1)
(61.4%)
–
(26.7)
(26.7)
Underlying Profit/(Loss) Before Tax
18
0.3
(60.2)
(59.9)
(46.5%)
0.4
(41.3)
(40.9)
Net costs increased by a further £1.5m due to
lower Group recharges to the business units.
Net finance costs in the year were £43.1m
(2025: £26.7m), which excludes finance costs
within the Travel businesses of £15.4m
(2025: £18.4m) and Insurance Underwriting
business of £3.0m (2025: £8.8m). The
increase was predominantly driven by the
refinancing of the Group’s corporate debt at
the beginning of the year at materially higher
interest rates.
Other Businesses and Central Costs
from Jenny
I just trust the name,
put it like that.”
Saga plc
Annual Report and Accounts 2026
34
19
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
20
Trading EBITDA includes the line-item impact of IFRS 16 with the corresponding impact to net finance costs included in net cash flows used in financing activities
Available Operating Cash Flow
19
£m
12m to Jan
2026
Change
12m to Jan
2025
Group Trading EBITDA
19
153.1
11.7%
137.1
Less Trading EBITDA
19
from restricted businesses
(39.7)
(15.7%)
(34.3)
Group Trading EBITDA
19,20
from unrestricted businesses
113.4
10.3%
102.8
Working capital and non-cash items
86.9
>500.0%
2.2
Dividends and intercompany repayments from restricted businesses
26.2
13.9%
23.0
Capital expenditure funded with Available Cash
19
(20.6)
(12.0%)
(18.4)
Available Operating Cash Flow
19
205.9
87.9%
109.6
Restructuring costs
(42.4)
(99.1%)
(21.3)
Interest and financing costs
(67.1)
(55.0%)
(43.3)
Business disposals
68.8
100.0%
–
Income tax receipts
2.7
(64.0%)
7.5
Other payments
(11.9)
(105.2%)
(5.8)
Change in cash flow from operations
156.0
234.0%
46.7
Change in bond debt
(250.0)
(66.7%)
(150.0)
Change in loan facilities debt
260.0
246.7%
75.0
Change in Ocean Cruise ship debt
(55.6)
10.6%
(62.2)
Cash at 1 February
79.3
(53.3%)
169.8
Available Cash
19
at 31 January
189.7
139.2%
79.3
£m
12m to Jan
2026
Change
12m to Jan
2025
Available Operating Cash Flow
19
by business unit
Ocean Cruise
124.5
34.7%
92.4
River Cruise
2.6
85.7%
1.4
Holidays
13.7
8.7%
12.6
Insurance Broking
79.5
>500.0%
8.1
Insurance Underwriting
10.0
11.1%
9.0
Other Businesses and Central Costs
(24.4)
(75.5%)
(13.9)
Available Operating Cash Flow
19
205.9
87.9%
109.6
Cash flow and liquidity
Saga plc
Annual Report and Accounts 2026
35
Financial statements
Additional information
Governance
Strategic Report
Available Operating Cash Flow
21
is made up of
the cash flows from unrestricted businesses
and the dividends paid by, and intercompany
repayments from, restricted companies,
less any cash injections to those businesses.
Unrestricted businesses include the Group’s
Ocean Cruise business, Insurance Broking
(excluding specific ring-fenced funds to
satisfy Financial Conduct Authority
regulatory requirements) and Other
Businesses and Central Costs. Restricted
businesses include River Cruise, Holidays
and Insurance Underwriting.
As a result of an increase in cash generation
from Ocean Cruise and Insurance Broking,
Available Operating Cash Flow
21
increased
from £109.6m in the prior year to £205.9m
the current year.
The Ocean Cruise business reported an
Available Operating Cash Flow
21
of £124.5m
(2025: £92.4m), with an increase in advance
customer receipts of £12.6m (2025: £12.0m),
net trading income of £108.3m (2025:
£97.3m) and repayment of cash collateralised
Association of British Travel Agents (
ABTA
)
bonding of £11.5m (2025: £11.5m drawdown),
partially offset by capital expenditure of
£7.9m (2025: £5.4m), associated with a
scheduled dry dock for Spirit of Discovery.
Net of interest costs of £12.9m (2025:
£15.8m) and exceptional costs of £0.6m
(2025: £1.7m), the Ocean Cruise business
reported a net cash inflow, before capital
repayments on the ship debt, of £111.0m
for the year, compared with £74.9m in the
prior year.
The River Cruise business provided an
intercompany loan to the Group of £2.6m
in the year (2025: £1.4m), which was agreed
with the Civil Aviation Authority (
CAA
). For
any further excess cash to be paid back to the
Group, dividends will only be paid following an
approval process with the CAA. The business
continues to be under an escrow trust
arrangement as part of its CAA licence.
At 31 January 2026, the business held cash
of £22.7m, of which £12.0m was held in
escrow. The business must hold a minimum
of £1.7m of cash outside of escrow within the
business, as agreed with the CAA.
The Holidays business repaid the Group
£13.7m during the year (2025: £12.6m).
The increase is due to the improved trading
performance in the current year compared
with the prior year, resulting in an increase in
repayment of intercompany loans to the
Group during the current year.
The Insurance Broking business reported
an Available Operating Cash Flow
21
of £79.5m
(2025: £8.1m), which includes £60.0m
(2025: £nil) of upfront consideration as part
of the Ageas
22
Affinity Partnership. The
remaining increase of £11.4m is the result of
an increase in working capital of £7.5m, which
was driven by the receipt of £7.5m from AICL
relating to a stop loss agreement between
AICL and Saga Services Limited. In addition,
there was a reduction in capital expenditure
in the current year of £6.1m. This was partially
offset by a reduction in EBITDA in the current
year of £2.2m.
The Insurance Underwriting business
paid dividends to the Group of £10.0m
(2025: £9.0m), prior to the sale to Ageas
22
,
relating to excess solvency capital.
21
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
22
Wholly owned UK subsidiaries of Ageas SA/NV
£205.9m
Available Operating Cash Flow
21
2024/25 – £109.6m
£189.7m
Available Cash
21
at 31 January
2024/25 – £79.3m
Group Chief Financial Officer’s Review
continued
Other cash flow movements
Interest and financing costs increased in the
current year, predominantly driven by the
refinancing of the Group’s corporate debt at
the beginning of the year at materially higher
interest rates.
The Group continued to make the agreed
payments to the defined benefit pension
fund as part of the deficit recovery plan of
£5.8m (2025: £5.8m), which are now paid
quarterly compared with the previous annual
contributions. In addition, the Group funded
ring-fenced, restricted designated bank
accounts, using Available Cash
21
totalling
£6.1m, over which charges have been granted
in favour of the pension trustees, both of
which are included within other payments.
In the current year, the Group drew its
£335.0m term loan (see change to facilities
within the Financing section for further
details) and used the funds to repay in full and
cancel its £250.0m corporate bond, repay
the £75.0m drawn proportion, and cancel the
£85.0m loan facility, provided by Roger De
Haan. The Group continued to make capital
repayments against its Ocean Cruise ship
debt facilities, with payments totalling
£25.5m (2025: £30.6m) on Spirit
of Discovery’s debt facility and £30.1m
(2025: £31.6m) on Spirit of Adventure’s
debt facility.
Saga plc
Annual Report and Accounts 2026
36
23
Wholly owned UK subsidiaries of Ageas SA/NV
Statement of
financial position
Goodwill
At 31 January 2026, the carrying value of
the Group’s goodwill associated with the
Insurance Broking business was £206.4m
(31 January 2025: £206.4m). Trading
performance in the current year was ahead
of expectations, therefore, following the
annual test of goodwill for impairment, the
Directors concluded that no impairment
was required at 31 January 2026.
Carrying value of Ocean
Cruise ships
At 31 January 2026, the carrying value of the
Group’s Ocean Cruise ships was £555.6m
(31 January 2025: £570.6m). Trading
performance in the current year was very
positive, and, with strong bookings for
2026/27, the Directors concluded that
there were no indicators of impairment
at 31 January 2026.
Investment portfolio
Prior to its sale to Ageas
23
on 1 July 2025, the
majority of the Group’s financial assets were
held by its Insurance Underwriting entity and
represented premium income received and
invested to settle claims and meet regulatory
capital requirements.
As a result of the sale of the Group’s
Insurance Underwriting business, the
amount held in invested funds decreased
by £253.1m to £nil (31 January 2025:
£253.1m). At 31 January 2026, 100% of the
financial assets held by the Group were
invested with counterparties with a risk
rating of BBB or above, consistent with
the prior year end, reflecting the relatively
stable credit risk rating of the Group’s
investment holdings.
Credit risk rating
At 31 January 2026
AAA
£m
AA
£m
A
£m
BBB
£m
Unrated
£m
Total
£m
Derivative assets
–
–
1.1
–
–
1.1
Total financial assets
–
–
1.1
–
–
1.1
Credit risk rating
At 31 January 2025
AAA
£m
AA
£m
A
£m
BBB
£m
Unrated
£m
Total
£m
Investment portfolio
Deposits with financial institutions
–
1.0
10.5
–
–
11.5
Debt securities
22.8
53.2
52.4
50.3
–
178.7
Money market funds
62.9
–
–
–
–
62.9
Total invested funds
85.7
54.2
62.9
50.3
–
253.1
Derivative assets
–
0.2
0.9
–
–
1.1
Total financial assets
85.7
54.4
63.8
50.3
–
254.2
Insurance reserves
Analysis of insurance contract liabilities at 31 January 2026 and 31 January 2025 is as follows:
At 31 January 2026
At 31 January 2025
£m
Gross
Reinsurance
assets
Net
Gross
Reinsurance
assets
Net
Incurred claims – estimate of the present value
of future cash flows
–
–
–
235.9
(88.9)
147.0
Incurred claims – risk adjustment
–
–
–
33.7
(28.2)
5.5
Remaining coverage – excluding loss component
–
–
–
46.3
9.3
55.6
Remaining coverage – loss component
–
–
–
1.8
–
1.8
Total
–
–
–
317.7
(107.8)
209.9
The Group’s total insurance contract liabilities, net of reinsurance assets, decreased by £209.9m in the year to 31 January 2026 from the
previous year end, entirely due to the sale of the Group’s Insurance Underwriting business to Ageas
23
on 1 July 2025. At 31 January 2025, these
balances were included within liabilities directly associated with assets held for sale.
Saga plc
Annual Report and Accounts 2026
37
Financial statements
Additional information
Governance
Strategic Report
Financing
At 31 January 2026, the Group’s Net Debt
24
was £499.5m, £93.3m lower than at the start of the financial year.
Net Debt
24
is analysed as follows:
£m
Maturity date
25
31 January
2026
31 January
2025
5.5% Corporate bond
July 2026
–
250.0
Loan facility provided by Roger De Haan
April 2026
–
75.0
Term loan
January 2031
335.0
–
DDTL
January 2031
–
–
RCF
January 2029
–
–
Spirit of Discovery Ocean Cruise ship loan
June 2031
117.5
143.0
Spirit of Adventure Ocean Cruise ship loan
September 2032
171.7
201.8
Pre-IFRS 16 lease liabilities
5.0
2.3
Less Available Cash
24,26
(189.7)
(79.3)
Add upfront Ageas
27
partnership proceeds
60.0
–
Net Debt
24
499.5
592.8
28
Net Debt
24
includes an add back of the £60.0m of upfront Ageas
27
partnership proceeds due to a restriction within the Group’s facilities with
HPS Funds
29
, where the proceeds from the Ageas
27
partnership cannot be recognised within Net Debt
24
until the working capital unwind
associated with moving motor and home to the partnership model has fully occurred.
Financial covenant compliance
The Group’s Leverage Ratio
24
, at 31 January 2026, was 3.7x (31 January 2025: 4.4x
28
), within the 8.0x covenant under the corporate facilities at
31 January 2026.
£m
31 January
2026
31 January
2025
Net Debt
24
499.5
592.8
28
Consolidated Pro Forma EBITDA
24
133.3
134.6
Leverage Ratio
24
3.7x
4.4x
28
The Group also has financial covenants associated with its Ocean Cruise ship debt facilities, being a debt service cover ratio and an interest cover
ratio. The debt service cover ratio, at 31 January 2026, was 1.9x (31 January 2025: 1.4x), in excess of the 1.2x covenant (31 January 2025: 1.0x)
under the Ocean Cruise ship debt facilities at the same date. The interest cover ratio, at 31 January 2026, was 12.2x (31 January 2025: 7.9x),
in excess of the 2.0x covenant under the ship debt facilities at the same date.
£m
31 January
2026
31 January
2025
ST&H Group consolidated pro forma Trading EBITDA
24
126.8
103.9
ST&H Group consolidated debt service
66.0
75.3
Debt service cover ratio
1.9x
1.4x
£m
31 January
2026
31 January
2025
ST&H Group consolidated pro forma Trading EBITDA
24
126.8
103.9
ST&H Group consolidated total net cash interest expenses
10.4
13.1
Interest cover ratio
12.2x
7.9x
Change to facilities
At the start of the financial year, the Group repaid in full its £250.0m corporate bond and the £75.0m drawings under the £85.0m loan facility
provided by Roger De Haan, which was also cancelled at the same time, and cancelled the existing £50.0m RCF. These repayments were funded
using the new £335.0m term loan secured from HPS Funds
29
.
Since issuing its interim results, the Group extended its RCF for an additional year, extending the contractual maturity to January 2029. There
have been no other changes to the facility and the RCF remains available to support working capital and general corporate purposes and
remained undrawn at 31 January 2026.
The Group also made scheduled repayments on its Ocean Cruise ship debt facilities in March 2025 and September 2025 for Spirit of Adventure
and in June 2025 and December 2025 for Spirit of Discovery, totalling £30.1m and £25.5m respectively.
24
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
25
Maturity date represents the date the principal must be repaid, other than the Ocean Cruise ship loans, which are repaid in instalments
26
Refer to Note 25 of the financial statements for information as to how this reconciled to a statutory measure of cash
27
Wholly owned UK subsidiaries of Ageas SA/NV
28
Following the Group’s refinancing and revised covenant definition, Net Debt and the Leverage Ratio have been re-presented at 31 January 2025
29
Certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed, advised or controlled by HPS Investment Partners, LLC or its subsidiaries
Group Chief Financial Officer’s Review
continued
Saga plc
Annual Report and Accounts 2026
38
Pensions
The Group’s defined benefit pension scheme liability, as measured on an International Accounting Standard 19R basis, decreased by £14.4m to
a £25.4m liability at 31 January 2026 (31 January 2025: £39.8m).
£m
31 January
2026
31 January
2025
Fair value of scheme assets
204.1
200.1
Present value of defined benefit obligation
(229.5)
(239.9)
Defined benefit pension scheme liability
(25.4)
(39.8)
The movements observed in the scheme’s
assets and obligations were impacted by
macroeconomic factors during the year,
where actual inflation levels reduced
compared with recent years, high-quality
long-term corporate bond yields remained
volatile and there continues to be rising cost
of living pressures. The present value of
defined benefit obligations decreased by
£10.4m to £229.5m, primarily as a result
of increases in bond yields over the year.
The fair value of scheme assets increased
by £4.0m, to £204.1m, largely driven by the
recovery plan and Section 75 contributions.
30
Wholly owned UK subsidiaries of Ageas SA/NV
Net assets
Since 31 January 2025, total assets
decreased by £312.7m and total liabilities
decreased by £324.7m, resulting in an
overall increase in net assets of £12.0m.
The reduction in total assets is primarily
due to:
•
a decrease in property, plant and
equipment of £14.5m;
•
a decrease in assets held for sale of
£425.9m following the sale of the Insurance
Underwriting business in the current year;
and
•
an increase in cash and short-term
deposits of £127.8m, mainly as a result
of the strong trading performance of the
Group in the current year, along with the
proceeds received in respect of the sale
of the Insurance Underwriting business
and the Ageas
30
partnership.
The decrease in total liabilities largely reflects:
•
a decrease in liabilities held for sale of
£346.9m following the sale of the Insurance
Underwriting business in the current year;
•
a decrease of £38.7m in financial liabilities,
which is mainly due to a reduction of
£54.3m in bonds, bank loans and other
loans, as a result of the repayment of
£55.6m of capital repayments on Spirit of
Discovery and Spirit of Adventure facilities.
This has been partially offset by an increase
of £12.3m in lease liabilities following
delivery of the River Cruise ship, Spirit of the
Moselle, in the first half of the current year;
•
a decrease of £14.4m in the retirement
benefit scheme liability; and
•
an increase of £75.4m in contract liabilities
due to the receipt of £60.0m of upfront
partnership proceeds from Ageas
30
and
improved future bookings outlook in Travel.
Saga plc
Annual Report and Accounts 2026
39
Financial statements
Additional information
Governance
Strategic Report
Going concern
The Directors have assessed the Group’s
ability to continue as a going concern over
the period to 30 April 2027, being at least
12 months from the date of approval of the
Annual Report and Accounts. This
assessment considered the Group’s current
liquidity position, financial forecasts, debt
facilities, covenant compliance and principal
risks. The review included both the
Board-approved base case and a severe but
plausible stressed scenario.
Under the base case, the Group maintains
Available Cash
31
in excess of internal minimum
liquidity requirements throughout the
assessment period. No drawdown of the
Group’s £33.4m RCF or £116.6m DDTL
facility is required, and the Group remains in
compliance with all financial covenants linked
to its debt facilities.
The stressed scenario models multiple
downside risks occurring concurrently
across the assessment period. These
include lower trading performance across
Ocean Cruise, River Cruise and Holidays,
reflecting a reduction in load factors for
Ocean Cruise from 93% for the year ended
31 January 2026 to 88% over the
assessment period, a 1-2% reduction in per
diems in River Cruise and softer customer
volumes in our Holidays business;
lower-than-planned benefit realisation and
increased operating pressures within
Insurance Broking; and a competitive savings
market combined with weaker demand for
our other products in the Money division.
The scenario additionally incorporates a
cyber-related operational disruption
affecting both Cruise and Insurance, as well as
certain adverse non-trading cash impacts,
including higher ABTA bonding requirements.
Together, these stresses reduce profitability
and cash generation relative to the base case.
31
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
32
Wholly owned UK subsidiaries of Ageas SA/NV
Group Chief Financial Officer’s Review
continued
In forming their conclusion, the Directors
considered the Group’s exposure to the crisis
in the Middle East and the increased volatility
in global energy markets. Saga is 100%
hedged against foreign exchange risk for both
2026/27 and 2027/28 and is 100% and 75%
hedged for commodity risk, respectively.
However, the Group remains directly
exposed to risks associated with supply
constraints for marine fuel in its Cruise
operations and, indirectly, to jet fuel through
the Holidays business unit’s partnerships with
airlines. Additional reverse stress testing
indicates that, in 2026/27, Saga could
withstand a reduction in planned EBITDA of
more than 50% before breaching its leverage
covenant and losing access to currently
undrawn debt facilities.
The Directors also considered additional
downside risks not explicitly modelled,
including regulatory, operational and
economic uncertainties. These were
assessed as either remote within the going
concern period or mitigated through existing
controls and contingency planning.
Having reviewed the forecasts, stress testing
and associated risk analysis, the Directors
are satisfied that the Group can expect to
remain in compliance with its debt covenants
and retain access to currently undrawn
facilities even under the stressed scenario.
Noting that it is not possible to accurately
predict all possible future risks to the Group’s
trading, based on this analysis and the
scenarios modelled, they have concluded
that the Group has adequate resources to
continue in operational existence for the
foreseeable future and that there are no
material uncertainties that may cast
significant doubt on the Group’s ability to
continue as a going concern. Accordingly,
the financial statements to 31 January 2026
have been prepared on a going concern basis.
Dividends and financial
priorities for 2026/27
Dividends
Given the Group’s priority of reducing
Net Debt
31
, the Board of Directors does not
recommend payment of a final dividend for
the 2025/26 financial year, nor would this
currently be permissible under financing
arrangements and while the ship debt facility
deferred amounts are outstanding.
Financial priorities for 2026/27
The Group’s financial priorities for the
current financial year are to reduce Net
Debt
31
via capital-light growth, continue
to build on the momentum in our Travel
businesses and Insurance Broking ahead
of the full transition to the partnership
with Ageas
32
.
Mark Watkins
Group Chief Financial Officer
20 April 2026
Saga plc
Annual Report and Accounts 2026
40
Our ESG framework
OUR COMMITMENT
TO ESG
At Saga, we recognise the importance of Environmental,
Social and Governance (
ESG
) and continue to make
progress with our ESG agenda.
Environmental, Social and Governance
In 2025, we refreshed our ESG framework
to ensure the continued applicability to our
business and our stakeholders’ priorities.
Progress was made against our existing key
performance indicators (
KPIs
) and targets,
which we track and report on within our
ESG Report.
Within our refreshed strategy, we have
ensured our customer remains at the
centre, with our key focus being to deliver
meaningfully differentiated products at
great value. We are committed to being
respectful of our customers’ data and
continuing to assess their changing needs.
In addition to simplifying our ESG framework,
we continued to focus on creating an engaged,
inclusive and diverse culture for our colleague
base. This includes launching our new Diversity,
Equity, Inclusion and Belonging (
DEI&B
)
Policy and developing internal training to
support and equip our teams. This training
will be launched in 2026. We have included
society in our refreshed framework, enabling
us to further focus on supporting causes our
customers and colleagues care about.
The environment remains a key area of focus
as Saga. During the year, our highlights
included continuing to calculate a complete
Scope 1-3 emissions footprint and starting to
transition our fleet vehicles away from diesel
and trialling electric vehicles. In addition, we
continue to support the UK Government’s
commitment to net zero by 2050.
To further this, during the year we have
developed an actionable net zero roadmap
with meaningful targets that we can aspire to
achieve with tangible actions and initiatives
comprised of five key principles.
•
Fuels and power
– Continuing to review
our options for our ships and vehicles
•
Partners and suppliers
– Work with our
partners and suppliers to encourage
sustainable process
•
Operational efficiencies
– Make our
operations more efficient
•
Reducing waste
– Implement different
practices to reduce waste
•
Product development
– Continue to
consider sustainability when developing
products and experiences
R
e
s
p
o
n
s
i
b
le
b
u
s
i
n
e
s
s
R
u
n
o
u
r
b
u
s
i
n
e
s
s
i
n
a
r
e
s
p
o
n
s
i
b
l
e
a
n
d
s
u
s
t
a
i
n
a
b
l
e
w
a
y
Colleague
Colleagues can be themselves and
perform at their best
Society
Support
causes
that are
important
to our customers
and colleagues
Environment
Manage our
impact on the
environment
Customer
Build customer trust
These principles have detailed action plans
which will be monitored and tracked to
completion. Our progress will be reported
within our annual ESG report.
Our Executive Team is remunerated against
customer satisfaction and our ESG targets
including carbon footprint, charity
partnerships and colleague diversity.
Saga plc
Annual Report and Accounts 2026
41
Financial statements
Additional information
Governance
Strategic Report
Environmental, Social and Governance
continued
Our climate-related
financial disclosures
We recognise the importance of the Task
Force on Climate-related Financial
Disclosures (
TCFD
) in providing a framework
for transparent reporting around
climate-related risks and opportunities.
In support of the framework, and in line with
our obligations under Financial Conduct
Authority UK Listing Rule (
UKLR
) 6.6,
the following pages set out our updated
disclosures consistent with the TCFD
recommendations on climate-related
financial disclosures, including the TCFD
guidance for all sectors.
During the year, we continued to ensure that
our responses to sustainability-related risks,
were incorporated into our business planning
processes, which formed the basis of certain
key judgements linked to financial
performance and the integration of climate
risk into our viability modelling.
The Board oversees climate-related risk
exposure within its risk management
framework. The Board is informed of
climate-related issues on a regular basis,
through management reporting and
escalation through its Committees.
The Board has overall accountability for risks
associated with climate change and commits
to including climate-related risk formally on
the Board agenda, including the oversight
of emissions performance and embedding
climate resilience into risk management, as
part of the wider ESG strategy. Our
Non-Executive Director designated as our
ESG Champion, Gemma Godfrey, provides
Board-level advocacy for ESG, including
factors related to climate change.
In 2025, the Audit Committee and the
Risk Committee were combined, providing
complete oversight of the identification of
risks within the risk framework, which
includes ESG risk. The Audit and Risk
Committee also oversees the framework of
internal controls, which includes those
relating to ESG. The Audit and Risk
Committee examines climate-related risk as
part of its consideration of principal risks and
uncertainties (
PRUs
). The Audit and Risk
Committee also discusses the Group’s
overall risk tolerance, strategy and ability to
detect new risks, including those related to
climate change. The Committee Chair
reports their recommendations to the
Board, outlining the PRUs, how they are
identified and any mitigating actions.
The Audit and Risk Committee monitors the
integrity of the Group’s financial statements
to oversee the effectiveness of internal
control systems.
4
Metrics and targets
Find out more on page 47
1
Governance
Find out more to the right
2
Strategy
Find out more on page 43
3
Risk management
Find out more on page 47
The Operating Board is tasked with ESG
delivery, including climate-related risk
assessment, and ensuring that action and
performance management for climate issues
are delivered throughout the organisation.
It also holds responsibility for overseeing
major capital expenditure, acquisitions and
divestitures. The Operating Board reports to
the Board through the Group Chief Executive
Officer (
CEO
).
Find out more in division of
responsibilities on page 70
We have an established ESG Steering
Committee, with representation from senior
leaders across our business units and key
Group functions. This Committee is chaired
by the Chief People Officer and has
responsibility for implementing ESG
initiatives and monitoring ESG risks, which
include measures relating to climate change.
This Committee reports into the Operating
Board which is chaired by the Group CEO
through the Chief People Officer.
In 2025, we refreshed our ESG strategy,
which includes a focus on managing our
impact on the environment. Both the
Operating Board and plc Board were
engaged in the strategy development
process and approval. The refresh ensures
that it continues to be relevant to the
organisation and reflects future business
priorities.
Management incentives are partially tied
to the achievement of the ESG targets
described within our 2026 ESG Report.
Board and Committee responsibilities
Task Force on Climate-related Financial Disclosures Report
Overall accountability for management of climate-related risks and opportunities.
Discussed bi-annually and as needed, following escalation from its Committees.
1
Governance
Board
Oversees the risk
management
framework and
internal controls
relating to climate
risk management and
broader ESG topics.
Audit and Risk
Committee
Links policy on DEI&B
to strategy and
promotes diversity
in new appointments.
Nomination
Committee
Sets
performance-linked
pay schemes, including
implementation
of ESG-related
incentives.
Remuneration
Committee
Implements
ESG strategy
and ensures
integration of ESG
considerations within
strategies, budgets
and operating plans.
Operating
Board
Supports delivery of
ESG targets and drives
ESG accountability
across the business
units and Group
functions.
ESG Steering
Committee
Saga plc
Annual Report and Accounts 2026
42
In 2025, our ESG strategy was refreshed.
This refresh continued to acknowledge the
environment as a priority. This year, we
continued to work towards our targets
focussed on calculating Scope 3 emissions,
developing the actions and initiatives which
form our net zero roadmap and introducing
low-carbon technologies to our cruise ship
fleet. More details on our net zero roadmap
can be found in our 2026 ESG report.
As reported in our 2025 Annual Report and
Accounts, we completed a climate scenario
analysis to assess the resilience of the
Group against potential future climate
change impacts.
This was refreshed in 2025 with new global
regions included. The refresh did not show
any significant changes in the types of risks
and opportunities we are exposed to, or the
severity of these risks and opportunities.
We are satisfied that our refreshed strategy
supports the mitigation activities as outlined
within our scenario analysis.
Our climate scenario analysis (as detailed on
page 46) involved engagement with each of
our business units, facilitated by key central
functions, including risk and finance, and
supported by external advisers.
We assessed climate-related risks across our
business units and within our key operating
regions. The timeframes used in our scenario
analysis were chosen for their relevance, both
to our own operations, including the lifespan
of our assets, and to international pledges on
emissions reductions.
Risks and opportunities were evaluated on a
sectoral and geographical basis in alignment
with the climate-related risk and opportunity
categories described within tables A.1.1 and
A.1.2 of the TCFD Implementation Guidance.
Our most significant risks and opportunities
are described in the table overleaf.
2
Strategy
Developing actions and
initiatives for our
net zero roadmap
Since the sale of our Insurance
Underwriting business and the
consolidation of our Cruise and Holidays
businesses, Travel now accounts for
the majority of our carbon emissions.
We are continually exploring ways in
which we can reduce our emissions
footprint. During the year, we continued
installation of shore power connectivity
for our fleet, allowing our ships’ engines
to be turned off when in port, reducing
emissions when compared with using
marine fuel. Although there have been
delays due to supply issues, we are
aiming to convert our entire fleet to
this technology by the end of 2026.
Following successful trials in 2024, we
continued to utilise fatty acid methyl
ester (
FAME
) biofuel on board our
ocean fleet. Our ships have maintained
their ‘A’ ratings in key international
energy efficiency rating schemes.
Other measures taken during the
year include the phasing out of diesel
and introduction of electric vehicles
to our car fleet and working towards
minimising waste on our ships. We
have established a dedicated working
group, who are actively reviewing
further opportunities to make
reductions in our carbon emissions.
Saga plc
Annual Report and Accounts 2026
43
Financial statements
Additional information
Governance
Strategic Report
Environmental, Social and Governance
continued
2
Strategy
continued
Description
Growing exposure to regulatory requirements,
including emissions taxation, carbon pricing and
reporting burden, increases costs across all
business units. Potential reputational damage,
and litigation, arise due to incidents of
non-compliance with more rigorous regulation.
Description
Adaptation to lower-carbon practices, including
the retro-fit of ships, use of FAME biofuel, use of
sustainable aviation fuels (Cruise and Holidays)
and digital media products (Publishing) drive
increasing costs and product pricing. Failure to
adapt could lead to reputational damage and
competitive disadvantage.
Mitigation
Saga has tracked emissions for several years,
building an understanding of emissions sources.
Our Cruise fleet is relatively new and less polluting
than industry counterparts. Saga is continuing to
evolve our net zero roadmap, aligned with the UK
Government’s 2050 target, while existing
practices, including the utilisation of FAME biofuel,
enhanced hull cleaning and shore power
connectivity, are reducing emissions over time.
Mitigation
Saga will proactively implement strategic initiatives,
including a net zero roadmap focussed on
maintaining competitiveness. The ongoing
transition to digital media products, alongside
media content focussed on environmental
protection, aligns with an increasingly
climate-conscious customer base.
Category
T
Transition
Business units
Cruise, Holidays,
Insurance, Money
and Publishing
Time horizon
Task Force on Climate-related Financial Disclosures Report
continued
Category
T
Transition
Business units
Cruise, Holidays,
Insurance and
Publishing
Time horizon
Risks
Description
Increasingly severe rain, drought, heat and storm
events cause supply chain disruption, leading to
reduced customer experience and increased
business costs. Incidents of severe weather affect
both Cruise and Holidays itineraries and the
availability of supplies across business activities.
Increased insurance claims for property damage
(motor and home lines)
1
, and risks to health
(private medical and travel lines) affect claims
frequency, profitability and reinsurance costs.
Damage to customers’ assets may also lead to
withdrawals from savings accounts.
Description
Sea level rise and altered weather patterns
result in increased coastal erosion and flooding.
Port operations (Cruise), beach front
destinations (Holidays), property (Insurance)
and general supply chains (including Publishing)
are disrupted. Consequent flooding and
infrastructure damage leads to general
disruption and complaints.
Mitigation
Cruise and Holidays itineraries are continually
reviewed and updated in response to incidents,
including those related to weather. Following our
partnership with Ageas
2
, we no longer have an
in-house underwriter. Going forward, our Insurance
control measures are largely dependent on
third-party underwriters. Engagement and
communication with our third party underwriters
is key to developing controls.
Mitigation
The Travel business model allows flexibility in the
sites visited for Cruise and accommodation used
for Holidays, enabling adaptability to changing
weather patterns. Following our partnership with
Ageas
2
, we no longer have an in-house underwriter.
Going forward our insurance control measures are
largely dependent on third-party underwriters.
Engagement and communication with our third
party underwriters is key to developing controls.
Communication with customers around delays to
the Saga Magazine delivery and our digital Magazine
via the app may mitigate reputational impact.
Category
P
Physical
Business units
Cruise, Holidays,
Insurance, Money
and Publishing
Time horizon
Category
P
Physical
Short term
(up to 2030)
Short term
(up to 2030)
Medium term
(2031–2040)
Medium term
(2031–2040)
Long term
(2041–2050)
Long term
(2041–2050)
Business units
Cruise, Holidays,
Insurance, Money
and Publishing
Time horizon
Short term
(up to 2030)
Medium term
(2031–2040)
Long term
(2041–2050)
Short term
(up to 2030)
Medium term
(2031–2040)
Long term
(2041–2050)
1
The assessment looks back and considers any risks associated with all our operations within the year. Where operations have changed following the partnership with wholly owned
UK subsidiaries of Ageas SA/NV, this will be reflected in our 2027 Annual Report and Accounts
2
Wholly owned UK subsidiaries of Ageas SA/NV
Acute physical
Chronic physical
Policy and legal
Market and technology
Saga plc
Annual Report and Accounts 2026
44
115,896 tCO
2
e
Scope 1 and 2 emissions
2024/25 – 107,766 tCO
2
e
Energy and resource efficiency
Products and services
Market resilience
Opportunities
Description
Collaboration with supply chains, including
ship technology providers and fuel suppliers,
will enable the introduction of energy savings
to Cruise activities.
Increased use of low-emission drop-in fuels,
improved ship specifications on new vessels,
and retro-fit of technology to existing vessels
can improve asset efficiency, extending asset
life and ensuring Cruise products remain
relevant into the future.
The ongoing shift to digital media products,
from traditional paper products, will reduce
operational costs and improve climate
resilience.
Description
The physical impacts of climate change may
open new geographies for travelling and
incentivise innovative travel offerings at
differing times of the year.
Customer involvement in sustainability-
focussed holidays, media products focussed
on sustainability themes, and other avenues,
provide a growing method of engagement
with our customer base.
ESG themes can increasingly feature in
product portfolios, including within insurance
and investment products.
Description
Group-wide net zero planning provides an
opportunity to improve resilience, through
understanding decarbonisation routes and
opportunities to engage with, and strengthen,
supply chains.
Climate-conscious financial products can be
tailored to reward customers for sustainable
behaviours.
Saga plc
Annual Report and Accounts 2026
45
Financial statements
Additional information
Governance
Strategic Report
Task Force on Climate-related Financial Disclosures Report
continued
Scenario analysis
During 2025, we reviewed our scenario
analysis to ensure alignment with the
recommendations of the TCFD. We utilised
a range of scenarios across both normative
and exploratory pathways. Our 2025 review
was based on the initial analysis, which was
completed in 2023. We intend to revisit this
analysis on a regular basis to ensure changes
to our operating model continue to be
considered and are aligned to upcoming or
emerging regulatory requirements. A full
refresh is planned for 2026.
Climate scenarios
Our climate scenario analysis examined three
Shared Socioeconomic Pathway (
SSP
)
scenarios from the Intergovernmental Panel
on Climate Change (
IPCC
) and three
transition scenarios from the International
Energy Agency (
IEA
). We also considered
sector-specific transition guidance from the
International Maritime Organization (
IMO
)
and UMAS. These scenarios were selected
as the most current projections of future
climate change relevant to Saga’s
business activities.
Geographic regions
In 2025, we increased the number of global
regions considered as the focus of our
scenario analysis, based on their significance
to the operations of our business units.
Global regions are as defined by the IPCC.
The global regions reviewed were:
•
UK;
•
Mediterranean;
•
Southern Africa;
•
South Asia;
•
Europe; and
•
Eastern North America.
The UK region is significant as the base for
the majority of our operations and as the
location of the majority of our assets,
customers, and insured properties and
vehicles. The other global regions selected
collectively contribute the majority of
revenue for our Travel business as
destination locations.
Time horizons
We considered the following time horizons:
•
Short term (up to 2030)
•
Medium term (2031–2040)
•
Long term (2041–2050)
Time horizons up to 2050 were assessed, due
to the significance of this date for transition
scenarios, in alignment with international
pledges on emissions reductions and the
expected manifestation of significant physical
climate impacts by this date.
Methodology
We conducted an initial desktop study to
identify Saga’s resilience to potential climate
impacts, based on our selected climate
scenarios, across our chosen regions and
time horizons.
We then conducted workshops with risk,
finance and operational subject matter
experts, across each of our business units
and key Group functions.
Based on the outputs of these workshops,
risks were assessed for their impact and
likelihood and aligned to Saga’s risk
management framework and scoring
mechanism.
Summary of findings
Our findings highlighted the shorter-term
adaptation to a low-carbon economy and
increasing exposure to regulatory
requirements, including emissions taxation
and carbon pricing, as well as a growing
reporting expectation, as key transition risks
to the Group. In the longer term, we found
that the increasingly severe acute and
chronic impacts of climate change could
disrupt supply chains, leading to negative
impacts on customer experience, higher
insurance premiums and supply chain issues.
Our findings identified that our strategy
remains appropriate, based on the risks and
opportunities identified within each scenario,
although we recognise the need to continue to
develop our climate resilience going forward.
2
Strategy
continued
Environmental, Social and Governance
continued
Scenario models utilised
Scenario summary
Low-emission
(best-case)
scenario
Physical climatic impacts are minimised and are less
severe than in the medium- and high-emission scenarios.
Advancements in technical and operational efficiency
temper growth in energy demand across sectors and
alternative fuels contribute the majority of supply to the
shipping sector.
Physical: IPCC SSP1-2.6: projected global
temperature increases of 1.3°C–2.4°C by 2100.
Transition: Net zero emissions by 2050 UMAS
– 1.5°C; IMO – 1.5°C to below 2°C.
Medium-emission
(most likely)
scenario
Physical climatic impacts are more severe than in the
low-emission scenario but less severe than in the
high-emission scenario. Significant emission reductions
occur within electricity generation, despite a doubling of
demand driven by increased electrification. Transport and
industry see a less marked fall in emissions, with increased
energy demand in regions without net zero pledges
partially offsetting emissions reduction.
Physical: IPCC SSP2-4.5: projected global
temperature increase of 2.1°C–3.5°C by 2100.
Transition: IEA Announced Pledges Scenario –
1.7°C.
High-emission
(worst-case)
scenario
Physical climatic impacts are more severe than in the
medium-emissions scenario. The energy mix of fossil fuels
falls slightly, although overall energy demand is increased,
driven by growing populations, higher incomes and rising
temperatures increasing demand for space cooling
(e.g. air conditioning).
Physical: IPCC SSP5-8.5: projected global
temperature increase of 3.3°C–5.7°C by 2100.
Transition: IEA Stated Policies Scenario – 3.5°C.
Summary of scenarios analysed
Saga plc
Annual Report and Accounts 2026
46
Process for identifying and scoring risks
Climate risk considerations have been built
into the Group risk management framework,
which was applied across our business units.
Risks were identified and assessed against
the Group risk assessment matrix, which
scores frequency and probability of risks
against their impact. As an evolution of our
Group risk assessments matrix, an ESG
category will be incorporated within the
future risk assessments used across the
Group, ensuring ESG considerations
(including climate-related impacts) are
captured. ESG risks were considered at
a business unit level and reported to the
relevant boards and risk committees.
The Board is responsible for setting risk
appetite and associated metrics. Where risks
are considered out of appetite, or where
mitigation measures are insufficient, actions
are assigned to resolve this.
Risk appetite status and action plans to
resolve out-of-appetite risks are reported
to the Audit and Risk Committee on a
regular basis.
Accountability for management of
climate-related risks are held by the relevant
business unit leadership team and, at the
Group level, by the Group CEO.
Find out more in risk management on
pages 49-50
Our published set of ESG targets focus on the
key themes of our ESG framework, including
environment. Our executive remuneration
plans are partially tied to performance against
these ESG targets, which include continuing
to track against our net zero roadmap.
More details about our remuneration can be
found on page 89.
Following on from our previous reporting,
we are committed to the following KPIs:
•
Maintain an ‘A’-rating on our owned ships in
the Energy Efficiency Existing Ship Index
(
EEXI
) and Carbon Intensity Indicator (
CII
)
ratings up to December 2026 and
investigate ways to improve EEXI and CII
scores beyond December 2026.
Climate-related risks were scored based on
the significance of their financial, operational
and regulatory impact, consistent with other
categories of risk.
Climate-related risks have been documented
alongside key controls used to mitigate risk.
Process to manage climate-related risks
Climate-related risks were considered at a
business unit level by management and
reported to the relevant boards and risk
committees. Risks were escalated as
required. ESG including climate change has
been identified as one of Saga’s PRUs, which
are considered by the Audit and Risk
Committee, comprising three Non-Executive
Directors during the year
3
.
•
Introduce shore power capability on 100%
of our River and Ocean Cruise vessels by
December 2026
4
.
Saga uses a cross-industry greenhouse gas
(
GHG
) emissions metric (tonnes of carbon
dioxide equivalent (
tCO
2
e
) per unit of Trading
EBITDA
5
), and we continue to develop our
capability in understanding our emissions
performance and areas for improvement.
We continue to calculate and report
emissions covering Scopes 1-3 in alignment
with the GHG Protocol and UK Government
conversion factors for company reporting.
Further detail is available in our Streamlined
Energy and Carbon Report (
SECR
) below.
The introduction of shore power capability
on our River Cruises has been completed.
Our Ocean Cruise vessels are being equipped
with the technology with a target completion
date of December 2026.
Saga is committed to supporting the
UK Government’s commitment to net zero
by 2050. In 2025, we investigated the key
principles required to meet a net zero target
by 2050. We will continue to track against our
net zero roadmap within our ESG Report.
Find out more about our
ESG KPIs and targets,
including GHG emissions,
in our 2026 ESG Report
Energy and carbon statement
Saga reports all emissions sources within
its operational boundary pursuant to the
Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon
Report) Regulations 2018, which implement
the Government’s policy on SECR.
Further reporting on Scope 3 emissions
and energy efficiency is available in our
2026 ESG Report.
Greenhouse gas emissions in tCO
2
e
Emissions scope
2025/26
2024/25
Scope 1
6
115,195
6
107,015
Scope 2 (location-based)
701
751
Scope 2 (market-based)
20
219
Scope 3 (business travel)
122
126
Total Scope 1, 2 (location-based) and 3 (business travel)
116,018
107,892
Scope 1, 2 (location-based) and 3 (business travel) emissions
intensity per £m Trading EBITDA
5
758
787
3
Julie Hopes, Non-Executive Director, resigned from the Board with effect from 27 February 2026. At the date of signing this report, the Audit and Risk Committee comprises two
Non-Executive Directors.
4
Delayed from December 2025 due to hardware supply issue
5
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
6
Includes fugitive refrigerant emissions of 296tCO
2
e (2025/26) and 3,110 tCO
2
e (2024/25) outside the required scope of SECR requirements, reported on a voluntary basis.
This increase in emissions associated with refrigerants was due to better reporting and data collection associated with Cruise ship refrigerant gases
Methodology
Emissions calculations were based on the
UK Government’s Environmental Reporting
Guidance (2013), the GHG Protocol
(2004:2015) and the UK Government’s
GHG Conversion Factors for Company
Reporting (2024).
In limited instances, where primary data
for purchased energy was not available,
assumptions were made based on averages
for surrounding months within the same site
to account for energy performance and
seasonal variation.
3
Risk management
4
Metrics and targets
Saga plc
Annual Report and Accounts 2026
47
Financial statements
Additional information
Governance
Strategic Report
Emissions summary and rationale
Saga’s 2025/26 SECR-aligned emissions
footprint (covering fuel combusted in
Company controlled and owned vehicles and
sites, purchased electricity and business
travel related to rented vehicles) was
116,018 tCO
2
e, with an intensity of 758 tCO
2
e
per £m Trading EBITDA
7
. Our combined
Scope 1 and 2 footprint was 115,896 tCO
2
e.
Total energy consumption was 425,285
megawatt hours.
Between 2025 and 2026, the emissions
intensity of UK grid electricity reduced by
15% due to changes in the impact of energy as
well as increase in power derived from natural
gas compared with previous years.
The average temperature across the
reporting period increased from 9.78°C
to 10.03°C.
During the reporting period, our emissions
associated with methane (
CH
4
) from marine
fuel totalled 48 tCO
2
e, our nitrous oxide
(
N
2
O
) emissions totalled 1,400 tCO
2
e and
sulphur (
S
) totalled 164 tCO
2
e. These all
increased from 2024/25, in line with the
increase in marine fuel used on Spirit of
Adventure and Spirit of Discovery.
Emissions (tCO
2
e)
2025/26
2024/25
CH
4
48
45
N
2
O
1,400
1,252
S
164
156
We utilised a FAME 10% biofuel mix across
4,740 tonnes of fuel in our cruise vessels,
Spirit of Adventure and Spirit of Discovery.
Per tonne of fuel, this reduced emissions by
6% compared with marine gas oil and 4%
when compared with marine fuel oil.
The IEA and International Renewable Energy
Agency predict that FAME will become a
more viable fuel alternative as production
and yield improve towards 2030.
Noting the targets set out in UKLR 6.6.6R(9),
the Board is committed to improving its
diversity in the coming years. At 31 January
2026, female Board representation was
29%
7
, below the 40% recommendation
of the FTSE Women Leaders Review,
while the Board met the Parker Review
recommendation that one Non-Executive
Director identify as being from an ethnically
diverse background.
We do not yet meet the recommendation that
at least one of the CEO, Chief Financial Officer
(
CFO
), Senior Independent Director (
SID
) or
Chair roles be held by a woman.
Colleague gender identity or sex
Number of
colleagues
8
Percentage of
colleagues
8
Number of
senior managers
9
Percentage of
senior managers
9
Men
1,759
60%
21
58%
Women
1,177
40%
15
42%
Not specified/prefer not to say
–
–
–
–
Board and executive gender identity or sex
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board (CEO,
CFO, SID, Chair)
Number in
executive
management
10
Percentage of
executive
management
10
Men
5
71%
11
4
7
78%
12
Women
2
29%
11
–
2
22%
12
Not specified/prefer not to say
–
–
–
–
–
Board and executive ethnic background
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board (CEO,
CFO, SID, Chair)
Number in
executive
management
10
Percentage of
executive
management
10
White British or other White
(including minority-white groups)
6
86%
11
4
9
100%
Mixed/Multiple ethnic groups
–
–
–
–
–
Asian/Asian British
1
14%
11
–
–
–
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group, including Arab
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
DEI&B
7
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
8
Includes all colleagues, senior management, executive management and Board at 31 January 2026
9
While Provision 23 of the UK Corporate Governance Code defines ‘senior management’ as the layer below the Board and the Company Secretary and their direct reports,
we believe it most appropriate to disclose the gender balance of our Operating Board and Senior Leadership Team, at 31 January 2026
10
Defined as the Operating Board members and Company Secretary in accordance with UKLR 6.6.6R(10)
11
Julie Hopes, Non-Executive Director, resigned from the Board with effect from 27 February 2026. At the date of signing this report, female representation on the Board was 17%
and the ethnic background of Board members was 83% White British or other White and 17% Asian/Asian British
12
Jerry Toher, CEO of Saga Personal Finance, resigned from his position with effect from 31 January 2026. At the date of signing this report, female representation in executive
management was 25%
We set externally published targets to
develop female representation on the Board
to at least 40% by 2027, and to maintain at
least one Director from an ethnically diverse
background by the same date.
In accordance with the UKLR, the tables
below detail the diversity profile of the Board
and executive management.
This data was collated from our colleague
database, populated using information
provided by each individual at recruitment or
during our diversity data collection exercise.
Our colleagues are asked to select their
relevant characteristics on both sex/gender
and ethnicity.
The Nomination Committee Report on
pages 72-74 sets out further detail on
our approach to Board diversity.
Gender pay report
We support the UK Government’s ambition
to address the gender pay gap. Our report
detailing our gender pay gap and
commitments can be found on our website
(www.saga.co.uk/gender-pay-review).
We set a target to increase female
representation across senior management
positions and above to 50% by 2027.
Environmental, Social and Governance
continued
Saga plc
Annual Report and Accounts 2026
48
Board assessment of risk
management and internal control
Our Board has ultimate responsibility for
the Company’s risk management, internal
control and risk culture. It is also responsible
for regularly reviewing the effectiveness
of risk management and control systems,
ensuring that there is an ongoing systematic
process for identifying, evaluating and
managing the emerging and principal risks
faced by Saga.
This system accords with the Financial
Reporting Council’s guidance on risk
management, internal control and related
financial and business reporting, and was
in place for the year under review and up to
the date of approval of this Annual Report
and Accounts.
Risk maturity is measured, and all business
units (
BUs
) seek to continuously improve
their maturity over time, in line with the
targets set. Risk objectives are set for all
members of the Operating Board, with an
end-of-year assessment against the
achievement of these objectives.
Risk framework
Saga developed its risk management
framework to best suit the diversity of its
BUs, regulatory requirements and industry
standards. This ensures the required levels
of risk maturity are maintained in our
financial services businesses, while enabling
Travel to place more focus on the risk
framework elements which are appropriate
for their business.
Our risk management framework is made up
of the following: risk strategy and plan, risk
governance, risk appetite, incident
management, and risk and control registers.
Risk maturity against each element of the
risk framework is assessed for each BU and
Group function, with plans in place to ensure
continual improvement.
Risk strategy and plan
Our risk strategy and plan, which are aligned
with our overarching strategy, are considered
and approved annually.
Risk governance
The main consideration within risk
governance is the Board management of
risk and subsequent delegation to risk
committees and other governance forums.
This ensures that risk is managed effectively
and that there is appropriate oversight
through reporting and accountability defined
within each committee’s Terms of Reference
and, where applicable, through the application
of the Senior Managers and Certification
Regime. Additionally, the suite of Saga risk
policies, including, but not limited to, conduct
risk, incident management and internal
control, define our risk management
framework and high-level expectations
of the 1
st
and 2
nd
line in respect of risk
management activity.
Incident management
The 1
st
line business areas are responsible
for raising risk incidents identified in a timely
manner, conducting appropriate root cause
analysis to prevent recurrence and resolving
incidents promptly. The 2
nd
line oversees this
activity to ensure appropriate resolution of
incidents, fair customer outcomes, policy
adherence and that appropriate actions are
implemented to avoid recurring incidents.
1
2
nd
and 3
rd
line roles for Saga Services Limited and Saga Personal Finance are separated in line with professional and best practice standards
Risk management
EFFECTIVELY
MANAGING OUR RISKS
Effective risk management and control is achieved through application of the
‘three lines of defence’ model as follows:
Governing body
Accountability to stakeholders for Group oversight
Management
Actions (including managing risk)
to achieve organisational objectives
External assurance providers
Internal Audit and
Assurance (
IAA
)
Independent
assurance
1
st
line roles
Provision of
products/services
to customers and
managing risk
2
nd
line roles
Expertise, support,
monitoring and
challenge on
risk-related matters
2
nd
and 3
rd
line roles
1
Independent and objective
assurance and advice
on all matters related
to the achievement
of objectives
Expertise, support,
monitoring and challenge
on risk-related matters
Governing body roles:
integrity, leadership and transparency
Our governance framework
Saga plc
Annual Report and Accounts 2026
49
Financial statements
Additional information
Governance
Strategic Report
Risk and control registers
Each BU and Group function is responsible
for identifying and managing its risks and
associated key controls, which are captured
on risk and control registers and scored
using a risk matrix that rates risk against
both impact and likelihood. Key controls
are subject to design and operational
effectiveness testing by the business and
validated through periodic 2
nd
line assurance
reviews, with action taken where controls are
found to be ineffective. Our risk registers help
to identify the top risks facing the various
businesses, which in turn inform our principal
risks and uncertainties.
Risk appetites
Saga’s Board-approved appetite statements
focus on the most key areas of risk for Saga,
providing our Board with visibility and
oversight of our exposure to these risks
compared with appetite. In particular, the
Board oversight ensures that we promptly
and appropriately respond to any risks which
are out of appetite, or which are moving
towards becoming out of appetite. Our risk
appetites are designed to support the
achievement of our strategy and be used
in key decision making.
Risk maturity
Each BU is assessed periodically against
our risk maturity matrix across both the 1
st
and 2
nd
lines of defence, with actions agreed,
and tracked through to closure for any
areas where there is a desire to increase
risk maturity.
Process feedback
Outputs from the risk management cycle
are fed back to our risk committees and
boards by exception to ensure that the risk
framework remains effective and supports
our strategy, business model and decision
making processes.
Independent process assurance
Saga’s IAA function is positioned centrally
within the Group, operating independently
of the BUs. It is, therefore, able to provide
independent assurance of the effectiveness
of the risk management procedures.
The objective of IAA is to help protect the
assets, reputation and sustainability of the
organisation by providing independent,
reliable, valued and timely assurance to the
Board and Operating Board. To preserve
the independence of the function, the IAA
Director’s primary reporting line is to the
Chair of the Audit and Risk Committee, and
the Internal Audit team is prohibited from
performing operational duties for the
business. Risk management responsibilities
of the IAA Director are also supported by
the independent reporting line to the Chair
of the Audit and Risk Committee.
All activities of the Company fall within the
remit of the IAA team, and there are no
restrictions on their work. IAA fulfils its role
and responsibilities by delivering the annual
risk-based audit plan. Each audit provides
an opinion on the control environment and
details of any issues found. IAA works with the
BUs to agree the remedial actions necessary
to improve the control environment and
these are tracked to completion. The Head
of Internal Audit submits reports to, and/or
attends, board and audit committee
meetings for the BUs, with the IAA Director
reporting to the Audit and Risk Committee.
Statement of review
As a result of its consideration and
contribution to risk management and internal
control activities, the Board is satisfied that
there is an appropriate framework for
identifying, evaluating and managing the
Group’s risks and internal controls and it is
regularly reviewed. The Board’s statement
of review of the effectiveness of Saga’s risk
management and internal control system
is set out on page 59.
Our risk management framework and
systems are designed to manage, rather
than eliminate risk, and operate to facilitate
the achievement of our business objectives
within our stated risk appetites.
There was regular reporting to the Audit and
Risk Committee throughout the year on the
status and evolution of Saga’s risk framework.
Risk management
continued
Saga plc
Annual Report and Accounts 2026
50
The matrix shows the principal risks and uncertainties (
PRUs
) facing
the Company, including those that would threaten its business model,
future performance, solvency or liquidity.
Principal risks and uncertainties
MITIGATING
EACH RISK
Saga takes a ‘bottom-up’ and ‘top-down’
approach to developing and reviewing its
PRUs, which occurs at least twice a year with
oversight from the Operating and plc Boards.
The PRUs have been refined throughout the
year to reflect our portfolio-based business
model in line with our strategy and use of
partnerships. The main changes are:
•
Insurance pricing, claims and underwriting
PRU has been updated to Demand and
competitiveness to cover the range of
products across the Group, reflecting
the risk to performance.
A
Strategic
B
Operational
C
Insurance
D
Financial
Key risk category
Our risks
1
Demand and competitiveness
B
C
2
Delivery and execution
B
3
Supply chain and partner risk
B
4
Regulatory and legislative action
B
5
Cyber
B
6
Concentration risk and exposure
to Travel market disruption
B
7
Liquidity risk
D
8
Fraud and financial crime
B
9
Culture and talent
B
10
Environmental, Social
and Governance
(ESG
)
A
B
Principal risks
Remote
Within 50 years
Unlikely
Within 10 years
Possible
Within 5 years
Probable
Within 2 years
Frequent
More than one
per year or in
the next year
Likelihood/timeframe
Minor
Mo
derate
Serious
Severe
Fundamental
Risk reward/impact
8
10
9
3
4
1
2
5
6
7
•
Supply chain risk has been updated
to include partners, as Saga relies on
multiple suppliers and partners to
conduct business.
•
The Regulatory action PRU has been
updated to include legislation.
•
Breach of data protection and General
Data Protection Regulation (
GDPR
)
has been removed as a standalone PRU
as it is included within the Regulatory
and legislative action PRU.
•
A new PRU, Concentration risk and
exposure to Travel market disruptions,
was introduced to reflect the Group’s
reliance on the profitability on Travel
over the next few years.
•
Organisational resilience has been removed
as a standalone PRU, as it is considered
within other PRUs.
•
The Capability and capacity PRU has been
updated to Culture and talent to reflect
the importance of culture and attracting,
developing and retaining key skills is to
the Group’s success.
1
5
9
Saga plc
Annual Report and Accounts 2026
51
Financial statements
Additional information
Governance
Strategic Report
1
Risk trend represents the current view of the future three-month trend and not the trend relative to the last published Annual Report and Accounts
Principal risks and uncertainties
continued
Description
Our business is undergoing a transformation that
is expected to simplify our business, grow our
customers and reduce our debt. As with any
change, there is a risk that failure to successfully
implement this change impacts our ability to
deliver the transformation and impacts future
performance.
Mitigation
Coherent change planning and prioritisation is at
the core of our planning and can be evidenced in
the successful delivery of change to date. Robust
change governance ensures achievement of
significant strategic change initiatives.
Risk trend
Link to strategy
1
2
3
Scope
Saga plc
Risk category
B
Risk owner
Group and business
unit (
BU
) CEOs
Delivery and execution
2
Description
Saga operates in regulated markets and is subject
to regular reporting and scrutiny. Failure to
comply with regulations and legislation, including
GDPR, could result in regulatory sanction,
remediation, penalties or loss of customer
confidence.
Mitigation
Robust controls, governance and reporting are
in place to ensure regulatory and legislative
compliance and good customer experiences and
outcomes are achieved.
Risk trend
Link to strategy
1
B
Scope
Insurance and Travel
Risk category
B
Risk owner
Group CEO and
BU CEOs
Regulatory and legislative action
4
Description
Saga relies on multiple suppliers and partners
to conduct business. There is a risk of customer
impact, business interruption, financial loss
and reputational damage arising from the
performance or potential failure of such parties.
Mitigation
A robust supplier risk management framework
is in place to ensure third-party partners are
appropriately selected and monitored, including
their operational and financial resilience.
Risk trend
Link to strategy
1
2
3
Scope
Saga plc
Risk category
B
Risk owner
Chief Financial
Officer (
CFO
) and
BU CEOs
Supply chain and partner risk
3
Description
Demand for our products and our ability to deliver
those products competitively to our target
market is fundamental to our business. Failure
to drive and maintain demand would represent
a risk to performance and, in the long-term,
business viability.
Mitigation
Our businesses use deep customer insight and
market testing to support decision making, tailoring
products for our customers and setting pricing
relative to demand and wider market dynamics.
Risk trend
Link to strategy
1
Scope
Insurance
Risk category
B
C
Risk owner
Chief Executive
Officer (
CEO
)
of Travel
CEO of Insurance
Demand and competitiveness
1
Key
A
Strategic
B
Operational
C
Insurance
D
Financial
Risk categories
B
Threat to business model
1
Maximising the growth of
our existing businesses
4
Reducing debt, while simplifying
our operations
2
Driving incremental growth
through new business lines
and products
3
Growing our customer base and
deepening those relationships
Strategic pillars
Improving
Stable
Worsening
Risk trend
1
Saga plc
Annual Report and Accounts 2026
52
Description
While a portfolio business, the majority of our
profits for the next few years will be driven by the
profitability of our Travel businesses, which could
be impacted by significant travel disruption.
Mitigation
As a portfolio group, we have a natural level of
diversification in comparison to other travel
businesses, with the Travel business also being
diversified across Ocean Cruise, River Cruise and
Holidays. In addition, our diversification strategy is
to grow our businesses, products and services in
line with our partnership model.
Risk trend
Link to strategy
1
Scope
Travel
Risk category
B
Risk owner
CEO of Travel
Concentration risk and exposure to Travel market disruption
6
Description
The Group relies on several sources of funding
for its long-term liquidity and is also reliant on
shorter-term trade financing, e.g. Association
of British Travel Agents bonding and merchant
acquiring to support its working capital needs.
As such, Saga is exposed to the risks associated
with repaying or refinancing this funding as it
reaches maturity.
Mitigation
Robust financial controls and reporting is in place to
assess liquidity and support early identification of
potential risks to Group liquidity from business
performance or interruption. We maintain access
to sufficient undrawn facilities that can support
liquidity to the extent that trade finance is removed.
Risk trend
Link to strategy
2
4
B
Scope
Saga plc
Risk category
D
Risk owner
Group CFO
Liquidity risk
7
Description
The ever-evolving external threat environment
means that, like most businesses, Saga is exposed
to the risk of potential cyber security breaches.
The result of a material breach could result in
system lockdowns, ransom demands and/or
compromise of substantial data, leading to
business disruption, customer/colleague
compensation and regulatory sanctions.
Mitigation
We have a dedicated Information Security Team,
with robust systems and controls. A proactive
vulnerability management programme is in place,
including controls to actively detect and respond to
incidents, industry benchmarking and external
penetration testing to maintain security posture.
Cyber
5
Risk trend
Link to strategy
1
B
Scope
Saga plc
Risk category
B
Risk owner
Chief Information
Officer
Description
There is a risk that failures of processes, systems
or people result in a reduced ability to prevent or
detect fraud and financial crime risk. This could
result in increased financial losses, regulatory
censure and reputational damage.
Mitigation
Financial crime framework and robust controls
in place, which are rigorously monitored and
reported on.
Risk trend
Link to strategy
1
Scope
Saga plc
Risk category
B
Risk owner
Group CFO and
BU CEOs
Fraud and financial crime
8
Saga plc
Annual Report and Accounts 2026
53
Financial statements
Additional information
Governance
Strategic Report
Description
Having the right culture, people and skills is
fundamental to the success of our business.
Failure to embed our culture or attract, develop
and retain our talent would represent a risk to the
delivery of our strategy.
Description
There is a risk that Saga does not maintain
compliance with increasing ESG-related
regulation or fails to deliver on its stated ESG
strategy in line with stakeholder expectations,
due to a lack of resource and/or business
engagement, causing reputational, customer
and financial impacts.
Mitigation
Competitive employment packages with continued
investment in pay, wellbeing and talent management
to attract, develop and retain capability in key roles,
develop future leaders and drive internal career
progression.
Mitigation
Defined strategy and metrics, with appropriate
governance, monitoring and reporting in place
to ensure we meet regulatory disclosures and
maintain current ratings.
Risk trend
Risk trend
Link to strategy
1
2
4
Link to strategy
1
3
Scope
Saga plc
Scope
Saga plc
Risk category
B
Risk category
A
B
Risk owner
Group CEO and
Chief People Officer
(
CPO
)
Risk owner
CPO
Principal risks and uncertainties
continued
Culture and talent
ESG
9
10
2
Risk trend represents the current view of the future three-month trend and not the trend relative to the last published Annual Report and Accounts
Key
A
Strategic
B
Operational
C
Insurance
D
Financial
B
Threat to business model
1
Maximising the growth of
our existing businesses
4
Reducing debt, while simplifying
our operations
2
Driving incremental growth
through new business lines
and products
3
Growing our customer base and
deepening those relationships
Improving
Stable
Worsening
Risk categories
Strategic pillars
Risk trend
2
Saga plc
Annual Report and Accounts 2026
54
Viability Statement
The Directors have considered the
viability of the Group over the five years
to January 2031. This period has been
selected as being consistent with the
planning horizon over which the Directors
normally consider the future performance,
capital and solvency requirements of the
business and includes consideration of
annual repayment obligations relating
to the Group’s Cruise ship debt facilities
over this timeframe.
In making this statement, the Directors
have considered the resilience of the
Group, taking account of its current
position, the principal risks facing the
business in severe, but plausible, scenarios
and the effect of mitigating actions
available to management.
The Directors have considered each of the
Group’s principal risks and uncertainties
(
PRUs
) detailed on pages 51-54 to
determine which might threaten the
Group’s ongoing viability. Severe, but
plausible, outcomes for each have been
identified, with an estimate of the potential
financial impact quantified. Assessments
of the potential financial impact have been
derived from both internal calculations and
examples of similar incidents in the public
domain. In assessing the viability of the
Group, the Directors have considered
appropriate management actions that may
be taken to manage the solvency of the
Group in the event of severe, but plausible,
downside scenarios.
The PRUs have been modelled individually, as
a probability-weighted average of all possible
scenarios and as a combination of the top
three risks identified.
The three largest sensitivities, in terms
of financial impact, were identified as
the following:
1.
Delivery and execution risk in our Cruise
division: being the risk of key business
change initiatives failing to be delivered
effectively. This was modelled as
the impact of a 10% reduction in Ocean
Cruise ship load factors across the
assessment period.
2. Regulatory action. This has been modelled
as a breach of the Data Protection
Act/General Data Protection Regulation
resulting in a fine equating to 2% of
revenue in any year of the assessment.
3. A cyber event impacting the Travel
businesses, resulting in impact to guests
and customers, reputation and brand
damage to the Group, regulatory scrutiny
and/or financial loss. This was assessed
through modelling the cancellation of
cruises for one of our Ocean Cruise ships
and one of our River Cruise ships for 75
days and consequent lost revenue in any
year of the assessment; in addition to
modelling the impact of all bookings to a
key Holidays destination being cancelled
for six months.
Reverse stress testing was also conducted to
ascertain which PRU, or combination of PRUs,
might lead to breach of covenant and cash
flow solvency thresholds.
The outcome of the modelling confirmed
that none of the top three PRUs, in isolation
or in combination, would compromise the
Group’s viability and that the Group could
expect to remain within its debt covenants
and retain access to currently undrawn
facilities across the assessment period.
In the unlikely event of all three top PRUs
occurring simultaneously, use of the
Group’s currently undrawn £33.4m
Revolving Credit Facility and £116.6m
delayed-draw term loan facility may be
required. The reverse stress test
demonstrated that the likelihood of
occurrence of a combination of PRUs
sufficiently severe as to cause a breach of
debt covenants or to fall below minimum
solvency thresholds is remote.
Based on the above assessment,
therefore, the Directors have a reasonable
expectation that the Group will be able to
continue in operation and meet its liabilities
as they fall due over the next five years.
Saga plc
Annual Report and Accounts 2026
55
Financial statements
Additional information
Governance
Strategic Report
Key disclosure statements
Non-financial and sustainability information statement
An overview of our approach to environmental, colleague, social, human rights, anti-corruption and anti-bribery matters, including where
additional information can be found elsewhere in this report or in our policies, can be found in the table below.
Details of our business model can be found on pages 22-23, and our principal risks and uncertainties are on pages 51-54. Our standalone
Environmental, Social and Governance (
ESG
) Report, alongside key policies and further reading, can be found on our corporate website
(www.corporate.saga.co.uk/about-us/environmental-social-and-governance/).
Reporting
requirement
Our approach, key policies and outcomes
More information
Environmental
matters
•
Our ESG strategy defines our approach to environmental matters, including managing our
impact on the environment. Our priority areas of focus are carbon emissions, supporting
suppliers to meet sustainability standards, understanding our impact on nature and biodiversity,
focussing on the sustainability impact of our products and managing climate-related risks and
opportunities. Our ESG strategy was informed by a double materiality assessment and includes
key performance indicators and targets to drive progress.
•
We have an ESG Champion on our Board and an established ESG Steering Committee, tasked
with supporting delivery of the ESG strategy.
Outcome
•
Developed a meaningful net zero roadmap.
•
Continued our charity partnership with ORCA and launched our partnership with Kent Wildlife
Trust.
•
Moving away from diesel vehicles within our owned chauffeur fleet and replacing with hybrid and
electric vehicles.
•
ESG matters are considered an important part of all strategic discussions.
Environmental,
Social and
Governance on
pages 41-48
2026 ESG Report
Climate-related
financial
disclosures
•
Our Task Force on Climate-related Financial Disclosures (
TCFD
) report provides details of our
climate-related governance arrangements, risks and opportunities, and targets.
•
Completed TCFD-aligned climate change scenario analysis and risk assessment.
Outcome
•
TCFD targets set and monitored closely, ensuring compliance with regulation.
Environmental,
Social and
Governance on
pages 41-48
2026 ESG Report
Colleagues
•
Our Diversity, Equity, Inclusion and Belonging (
DEI&B
) Policy commits us to create a truly
inclusive culture, where all colleagues can bring their authentic selves to work.
•
We remain a committed member of the UK Disability Confident Scheme and support the
advancement of employment for disabled persons in the UK.
•
Our Health and Safety Policy contains a clear set of principles and commitments which apply to
all colleagues, contractors and members of the public.
•
We are inclusive of age through our Grandparents’ Leave and Menopause Policies.
Outcome
•
Colleague engagement increased across Saga, with our most recent survey scoring 8.1 out of 10,
an improvement of 0.2 from December 2024.
•
Reaccredited as a menopause-friendly employer.
•
During the year, we were honoured to have been ranked sixth in the UK Best Employers 2025 list
by the Financial Times.
•
Growth in the participation of our colleague networks.
•
An inclusive culture which benefits from diversity of thought. Colleagues understand our purpose
and feel comfortable to voice their opinions.
Environmental,
Social and
Governance on
pages 41-48
2026 ESG Report
DEI&B Policy
Social matters
•
We seek to understand and carefully consider our impact within our communities. We ensure
open dialogue with the community so they are aware of our strategy, as well as any impact to them.
•
We promote colleague involvement in the community through our Public Duties Policy, Reservist
Policy and through giving all colleagues paid time off to volunteer within the community.
Outcome
•
Over £116k in charitable donations and funds raised during the year.
•
167 colleagues used their volunteer day, equivalent to 1,174 hours donated.
•
Saga takes the needs of the communities in which it operates into account and enables
colleagues to contribute.
Environmental,
Social and
Governance on
pages 41-48
2026 ESG Report
Respect for
human rights
•
We support the rights of all people as set out in the Universal Declaration of Human Rights.
Our Labour Standards Statement sets out the human rights principles adopted across the
Group, alongside our commitments to working responsibly and with integrity.
•
Our Modern Slavery Statement provides detail on our approach to risk, due diligence, policies,
training and audit in this area.
•
Our Supplier Code of Conduct establishes the types of behaviour Saga expects from any entity
that supplies products or services to the Saga Group.
Outcome
•
No incidents of human rights violations or modern slavery were identified in 2025/26.
•
Our colleagues, suppliers and their employees are protected and our stakeholders are reassured
by our high standards.
Labour Standards
Statement
Modern Slavery
Statement
Supplier Code
of Conduct
Anti-bribery and
anti-corruption
•
Our zero-tolerance approach to bribery and corruption is set out in our Anti-Bribery and
Corruption Policy, laying out clear guidance for the assessment of risk of bribery and corruption
across our business.
•
All colleagues receive mandatory training on anti-bribery and anti-corruption.
•
Our Supplier Code of Conduct establishes the types of behaviour Saga expects from any entity
that supplies products or services to the Saga Group.
Outcome
•
There were no fines, penalties or settlements for corruption reported in 2025/26.
•
Our stakeholders can be assured that we operate a zero-tolerance approach.
2026 ESG Report
Anti-Bribery and
Corruption Policy
Supplier Code
of Conduct
Saga plc
Annual Report and Accounts 2026
56
Section 172(1) statement
Duty to promote the success of the Company
The Directors have had regard for the matters set out in Section 172(1)(a)–(f) of the Companies Act 2006 (
S172(1)
) when performing their duty
under Section 172. The Directors consider that they have acted in good faith in the way that would be most likely to promote the success of the
Company for the benefit of its members as a whole, while also having regard to the S172(1) matters referred to below.
A description of how the Board engages with its key stakeholders can be found on pages 24-25 and the principal decisions made by the Board
during 2025/26, how stakeholders were considered and the likely consequences of these decisions over the longer term are set out on
pages 64-68. Further information on how S172(1) has been applied by the Board can be found in the table below.
S172(1) matter
Further information incorporated into this statement by reference
Likely consequences of any
decision in the long term
Chairman’s Statement
Pages 10-11
Group Chief Executive Officer’s Strategic Review
Pages 12-17
Environmental, Social and Governance
Pages 41-48
Principal risks and uncertainties
Pages 51-54
Chairman’s introduction to governance
Pages 60-61
Board activities
Pages 64-68
Nomination Committee Report
Pages 72-74
Audit and Risk Committee Report
Pages 75-79
Directors’ Remuneration Report
Pages 80-107
The interests of the
Company’s employees
Group Chief Executive Officer’s Strategic Review
Pages 12-17
Market review
Pages 20-21
Purpose and business model
Pages 22-23
Engaging with stakeholders
Pages 24-25
Environmental, Social and Governance
Pages 41-48
Principal risks and uncertainties
Pages 51-54
Chairman’s introduction to governance
Pages 60-61
Board activities
Pages 64-68
Division of responsibilities
Page 70
Nomination Committee Report
Pages 72-74
Audit and Risk Committee Report
Pages 75-79
Directors’ Remuneration Report
Pages 80-107
The need to foster the
Company’s business
relationships with suppliers,
customers and others
Chairman’s Statement
Pages 10-11
Group Chief Executive Officer’s Strategic Review
Pages 12-17
Purpose and business model
Pages 22-23
Engaging with stakeholders
Pages 24-25
Environmental, Social and Governance
Pages 41-48
Principal risks and uncertainties
Pages 51-54
Board activities
Pages 64-68
Impact of the Company’s
operations on the community
and environment
Engaging with stakeholders
Pages 24-25
Environmental, Social and Governance
Pages 41-48
Board activities
Pages 64-68
The Company’s reputation
for high standards of
business conduct
Group Chief Executive Officer’s Strategic Review
Pages 12-17
Environmental, Social and Governance
Pages 41-48
Risk management
Pages 49-50
Board activities
Pages 64-68
Audit and Risk Committee Report
Pages 75-79
The need to act fairly as
between members of
the Company
Engaging with stakeholders
Pages 24-25
Chairman’s introduction to governance
Pages 60-61
Board activities
Pages 64-68
Board leadership and Company purpose
Page 69
Directors’ Remuneration Report
Pages 80-107
This Strategic Report is presented to inform members of the Company and help them assess how the Directors have performed their
duty under S172(1). It has been approved by the Board and signed on its behalf by
Mike Hazell
Group Chief Executive Officer
20 April 2026
Saga plc
Annual Report and Accounts 2026
57
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Governance at a glance
GOVERNANCE
Corporate Governance Statement
59
Key statements and application of the
UK Corporate Governance Code
60
Chairman’s introduction to governance
62
Board of Directors
64
Board activities
69
Board leadership and Company purpose
70
Division of responsibilities
71
Composition, succession and evaluation
72
Nomination Committee Report
75
Audit and Risk Committee Report
Directors’ Remuneration Report
80
Annual Statement
83
Remuneration at a glance
85
Annual Report on Remuneration
97
Directors’ Remuneration Policy
108 Directors’ Report
111
Statements of responsibilities
112
Independent Auditor’s Report
to the Members of Saga plc
IN THIS SECTION
Board activities
Maximising the growth of our
existing businesses
•
Combined Holidays and Cruises into
one consolidated Travel business.
•
Expanded our River Cruise fleet.
•
Sold our Insurance Underwriting
business.
•
Launched the 20-year motor and home
insurance partnership with Ageas
1
.
Driving incremental growth through new
business lines and products
•
Launched a strategic partnership with
NatWest Boxed.
Growing our customer base and
deepening those relationships
•
Launched the ‘Experience is Everything’
podcast to broaden reach and build loyalty.
•
Simplified customer consent to reduce
duplication and protect the customer
experience.
•
Increased product awareness through
growth in customer acquisitions.
Reducing debt, while simplifying our
operations
•
Strengthened the balance sheet and
simplified financing.
•
Refocussed the Board on strategy;
disbanded the Innovation and Enterprise
Committee.
•
Merged the Audit and Risk Committees.
Find out more in Board activities on
pages 64-68
Governance framework
Our governance structure remains streamlined, enabling effective Board oversight.
Board
Data Management Committee
Environmental,
Social and Governance (
ESG
)
Steering Committee
Board Committees
Operating Board
Find out more in division of responsibilities on page 70
Board allocation of time during the year
Maximising the growth of our
existing businesses
Reducing debt, while simplifying
our operations
Growing our customer base and
deepening those relationships
c.30%
c.15%
c.20%
Driving incremental growth through
new business lines and products
c.15%
People and culture
c.10%
Oversight of risk management
c.5%
c.5%
ESG
1
Wholly owned UK subsidiaries of Ageas SA/NV
Saga plc
Annual Report and Accounts 2026
58
Compliance Statement
The Board is committed to high standards
of corporate governance and, during the year, managed Saga’s
operations in accordance with the UK Corporate Governance
Code 2024 (the
Code
). A full version of the Code can be found
on the Financial Reporting Council’s website (www.frc.org.uk).
Saga publishes an annual UK Corporate Governance Code
Statement, providing further detail on the application of the
Code. This is available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Viability Statement
The Viability Statement can be found in the
Strategic Report on page 55.
Going concern
The going concern basis of preparation can be
found in Note 2.1 of the financial statements on page 123.
Fair, balanced and understandable
In accordance with the Code,
the Board established arrangements to evaluate whether the
information presented in the Annual Report and Accounts is fair,
balanced and understandable. Having taken advice from the
Audit and Risk Committee, the Board considers that the Annual
Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s position and performance,
business model and strategy.
Assessment of risk
Through the risk management process
detailed on pages 49-50, the Board can confirm that it has carried
out a robust assessment of the emerging and principal risks facing
the Company, including those which would threaten our business
model, future performance, solvency or liquidity and reputation.
Statement of review
The risk management process detailed
on pages 49-50 was in place for the year under review and up to
the date of approval of this report. The Board recognises the
importance of appropriate systems of internal control and risk
management. The Group operates a ‘three lines of defence’
risk management framework, overseen and monitored by the
Audit and Risk Committee (see pages 75-79). Work conducted
by 2
nd
and 3
rd
lines recognised risk maturity improvements within
the year. While identifying some areas for improvement, this
provided reasonable assurance that the systems of risk
management and internal control were broadly effective.
Section 172(1)
The Section 172(1) statement can be found in the
Strategic Report on page 57.
2024 Corporate Governance Code
The Company established
a Corporate Governance Steering Committee as a management
group to address the changes resulting from the Code. Further
information can be found on page 70.
Key statements
Key statements and application of the UK Corporate Governance Code
The Company seeks to comply with the Principles set out in the Code, promoting good corporate governance to support the long-term
sustainable success of the Group.
Board leadership and Company purpose
Read more
on pages
A.
Board effectiveness
71
B.
Purpose, values, strategy and culture
1
-
25
,
41
-
48
and
69
C.
Board decision making
60
-
61
and
64
-
68
D.
Engagement with stakeholders
24
-
25
,
57
and
64
-
68
E.
Oversight of workplace policies
and practices
42
-
55
,
69
-
70, 71
and
77
Division of responsibilities
F.
Role of the Chair
69
and
71
G.
Independence and division of responsibilities
69
-
70
H.
External commitments and conflicts of interest
62
-
63
I.
Board resources
64
and
70
-
71
The Board believes that, during the reporting period, the Company was in
full compliance with all applicable Principles and Provisions of the Code,
save that:
•
Provision 3:
While the Chairman was available to meet with shareholders
during the year on request, as he is a significant shareholder, it was
determined that it would be more appropriate for the Group Chief
Executive Officer (
CEO
) and Group Chief Financial Officer (
CFO
) to
regularly engage with major shareholders.
•
Provision 9:
Due to his shareholding in the Company, the Non-Executive
Chairman was not considered independent on appointment. Taking into
account Roger De Haan’s history with the Saga brand and business, his
proposed time commitment, the terms of the Relationship Agreement
between him and the Company and his letter of appointment, the
appointment was deemed to be in the best interests of the Company.
Application of the UK Corporate Governance Code
Composition, succession and evaluation
Read more
on pages
J.
Appointments to the Board and succession planning
60-61
and
72-74
K.
Board composition and length of tenure
62-63
and
71
L.
Board and individual evaluation
71
and
74
Audit, risk and internal control
M.
Financial reporting
External audit and internal audit – independence
and effectiveness
75
-
79
N.
Fair, balanced and understandable assessment
59
and
77
O.
Risk management and internal controls
44
,
47
,
49
-
50
,
59
and
75
-
79
Remuneration
P.
Remuneration philosophy
80
-
82
Q.
Directors’ Remuneration Policy
97
-
107
R.
Annual Report on Remuneration
85
-
96
•
Provision 23:
While the Code defines ‘senior management’ as the layer
below the Board and the Company Secretary and their direct reports,
we think it is more appropriate to disclose the gender balance of the
Operating Board and Senior Leadership Team.
•
Provision 34:
Roger De Haan waived his fee for the financial year end and
since becoming Non-Executive Chairman in 2020
1
.
•
Provision 39:
Pension contributions/payments in lieu for Executive
Directors are aligned with those of the majority of colleagues (6% of
salary). Colleagues can, however, opt to increase their contribution to
a maximum of 10%, which the Company will match. This does not apply
to Executive Directors.
1
Given the strong performance of the business, the Remuneration Committee decided that it is now appropriate to reinstate a Chair fee. This follows Roger De Haan waiving
his fee since 2020 when he became Non-Executive Chairman, which was one of the many ways he actively supported the business. He will now receive a fee of £150,000
for 2026/27 which is below the £200,000 originally set for the role
Saga plc
Annual Report and Accounts 2026
59
Financial statements
Additional information
Governance
Strategic Report
Dear shareholder,
2025/26 was a particularly busy year for the
Saga Board. We dedicated a considerable
amount of our time to discussing a new
strategy for the Company together with its
five-year plan. It was time well spent because,
having embedded the strategy, we are seeing
a significant transformation at Saga and our
financial performance has improved. We now
have a simpler business model that allows us
to improve our profitability and meet our
customers’ needs more effectively.
The Board reviewed the main contractual
terms for the purchase of our Insurance
Underwriting business and the contract for
our motor and home Affinity Partnership,
both of which have led to a major
reengineering of our Insurance operations.
We also considered the strategic partnership
with NatWest Boxed that went live in
December 2025.
We supported the decision to combine our
Cruise and Holidays management teams
that has led to a single, more effective and
customer centric operation.
At a time when our balance sheet has been
strengthening, we were able to approve
the refinancing of a major part of our debt,
repaying the £250m 2026 bond and the
£75m drawn portion of the £85m facility that
I had provided. This allowed the facility and
the Group’s existing Revolving Credit Facility
to be cancelled. Our Net Debt
1
and Leverage
Ratio
1
have been reducing at pace and this
remains a strategic priority for us.
The steps we took in 2025/26 have led to the
Company’s return to the FTSE 250 and were
reflected in the award of ‘Transformation of
the Year’ at the 2025 plc awards.
Find out more in Board activities on
pages 64-68
Changes to Board and Committee
structure/composition
Following the resignation of Steve Kingshott
and Peter Bazalgette from the Board with
effect from 9 April 2025, Gareth Hoskin was
appointed as Senior Independent Director
and Chair of the Nomination Committee and
became a member of the Remuneration
Committee, while Julie Hopes also became
a member of the Nomination Committee.
In July, the Board approved the Nomination
Committee’s recommendation to merge the
Audit and Risk Committees. Gareth Hoskin
became its chair, and Anand Aithal and
Julie Hopes became the other members.
Since the year end, the Board has agreed that
the Innovation and Enterprise Committee
should be disbanded.
The Nomination Committee considered and
recommended the proposal for the Board to
re-appoint Anand Aithal and Gemma Godfrey
as Non-Executive Directors in September
when their first three-year terms came to an
end and the Board approved the Committee’s
recommendation to re-appoint them.
Julie Hopes resigned from the Board on
27 February 2026. The Board approved the
Nomination Committee’s recommendation
that Gemma Godfrey should take her place
as chair of the Remuneration Committee
and become ‘People Champion’. The Board
agreed that no other changes to committee
membership should be made at that stage
despite the fact that membership of the
Audit and Risk Committee and the
Remuneration Committee are below the
suggested Code recommendation. It was
agreed that the position would be reviewed
once a decision has been made about future
Board composition.
Sir Roger De Haan
Non-Executive Chairman
I would like to thank Julie for the contribution
she made during her time on the Board. Her
expertise in insurance and her wise counsel
have been invaluable to Saga over the past
seven years.
Find out more in our Nomination
Committee Report on pages 72-74
Risk management
The Audit and Risk Committee supported
the Board in achieving its key strategic goals,
including the refinancing agreed to improve
the Group’s liquidity, and to enable long-term
strategic partnerships with Ageas
2
and
NatWest Boxed. The Committee also
oversaw the successful implementation of a
new general ledger system which improved
the control environment and standardised
and simplified processes.
The Committee focussed on providing
independent challenge and oversight in
assessing the principal risks the business
faced and the design and effectiveness of
its critical controls. It also monitored risk
maturity and supported the business in
responding to the challenges it faced. It
escalated matters to the Board, including
the action the Group was taking to address
the elevated cyber security risk.
During the year, the Committee received
updates from the Corporate Governance
Reforms Steering Committee, a
management group that was established
to monitor and deliver the actions needed
to ensure compliance with the requirements
set out in the UK Corporate Governance
Code 2024 and relevant legislation.
Find out more in our Audit and Risk
Committee Report on pages 75-79
Corporate Governance Statement
Chairman’s introduction to governance
1
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
2
Wholly owned UK subsidiaries of Ageas SA/NV
GOVERNANCE
REPORT
Saga plc
Annual Report and Accounts 2026
60
People and remuneration
The Nomination Committee considered
the Group’s approach to evaluating
performance, talent and succession
planning and the progress made in creating
a diverse and high-quality pipeline. It also
considered how the Group was performing
against its Diversity, Equity, Inclusion and
Belonging (
DEI&B
) targets.
The Remuneration Committee was mindful
of the Group’s transition to a lower risk, less
complex and less volatile business when it
considered its approach to applying the
Remuneration Policy and reviewing
colleagues’ pay and reward.
Under the three-year Policy cycle and
following a process to consult shareholders,
a new Remuneration Policy was presented
at the 2025 AGM. The Board was pleased to
receive a 99.63% shareholder vote in favour
of the new Policy.
Find out more in:
How the Board monitors culture on
page 64
Directors’ Remuneration Report on
pages 80-107
Environmental, Social and
Governance (
ESG
)
During the year, we simplified our ESG
strategy and took significant steps to align
it with the Group’s new strategic priorities.
The ESG strategy ensures that we are acting
as a responsible business, and we developed
a net zero roadmap that aligned with the
expectations of the UK Government and
ensured that we were managing our impact
on the environment.
We continued to support causes that were
important to our customers and colleagues
and, during the year, we announced our
charity partnership with Kent Wildlife Trust
and we continued to support ORCA which
had a presence on many of our Ocean Cruise
ships’ sailings.
In the year, new appointments were made
to our ESG Steering Committee, which is
responsible for actioning our ESG strategy
across our businesses and which reports to
our Operating Board. Gemma Godfrey is the
Non-Executive Director designated as our
ESG Champion.
Find out more in:
Environmental, Social and Governance
on pages 41-48
2026 Environmental, Social and
Governance Report
Board and Committee
performance review
The Board effectiveness and performance
review was led by our Senior Independent
Director, Gareth Hoskin, supported by our
Group Company Secretary. He interviewed
all Directors. Areas of focus included
strategy, culture and ways of working, Board
composition, skills and succession. Feedback
was also sought on the effectiveness of
Board Committees.
The conclusions of the review was that the
Board had made good progress over the
last year, successfully overseeing the
implementation of the Group’s new strategy,
and that it had operated in a constructive,
open and respectful manner. The review
concluded that the Board’s committees had
also operated effectively, with constructive
engagement with management and the Board.
Find out more in composition,
succession and evaluation on page 71
Our 2025 Annual General
Meeting (
AGM
)
This year, our AGM will be held on
30 June 2026, at the offices of Herbert Smith
Freehills LLP, Exchange House, Primrose
Street, London EC2A 2EG. Full details will be
set out in the Notice of AGM in due course.
Sir Roger De Haan
Non-Executive Chairman
20 April 2026
Saga plc
Annual Report and Accounts 2026
61
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Board of Directors
The Board composition brings a wealth of expertise and leadership with a diverse range
of backgrounds spanning key sectors relevant to the Company. With a commitment to
delivering growth, governance and sustainability, their collective balance of experience will
ensure long-term value creation. Each Board member’s biography demonstrates the insight
and contribution they bring to the Board.
Key
Committee Chair
AR
Audit and Risk Committee
OB
Operating Board
N
Nomination Committee
R
Remuneration Committee
Appointed
5 October 2020
Key strengths and experience
•
Experienced business leader and
board director with extensive
experience in travel and financial
services industries.
•
Significant history with Saga,
having worked in the business
for over 40 years, including
over 20 years as Chairman and
Chief Executive Officer.
•
Instrumental in transforming Saga
from a specialist tour operator to
one that offered its own cruises,
and expanding the business to
cover publishing, insurance and
financial services, creating the
Saga brand.
•
Knighted in the 2014 New Year
Honours List for services to
education and to charity in Kent
and overseas.
Other roles
Director of Folkestone Harbour
companies; and Chair of Friends
of Folkestone Academy
(appointed January 2004) and the
two charities: Creative Folkestone
(appointed January 2003) and
The Roger De Haan Charitable
Trust (appointed September 1978).
Appointed
9 October 2023 (as Group Chief Financial Officer).
Group Chief Executive Officer from 28 November 2023
Key strengths and experience
•
Over 30 years of multi-sector
experience in a variety of
executive roles.
•
Significant experience in leading
multi-sector brand led businesses.
•
Substantial experience in strategy
development and execution.
•
Deep understanding of corporate
turnarounds and financing.
•
Fellow of the Chartered Certified
Accountants in England and
Wales.
•
Previous senior roles include:
Interim Chief Financial Officer
at The Co-op Group; Chief
Executive Officer of Debenhams
and Group Chief Financial Officer
prior to that; and various senior
management roles at Sky (media
and telco), Fonterra (global dairy)
and Pfizer (pharmaceutical and
consumer).
Appointed
28 November 2023
Key strengths and experience
•
Extensive knowledge of Saga,
with over 10 years of experience
within the business, including time
as Chief Corporate Development
Officer, Finance Director of Travel,
Interim Finance Director of
Insurance and Director of Investor
Relations and Corporate Finance.
•
Experience in delivering corporate
strategy, investor communications
and internal/external analysis
and reporting.
•
Considerable strategic, investor
and operational finance experience
across multiple sectors.
•
Fellow of the Institute of
Chartered Accountants in
England and Wales.
•
Previous senior roles include:
Chief Financial Officer Europe
and Central Asia at Intertek;
Finance Director of the
Processing, Recovery and
Disposal Division at Secure
Energy Services; and Group
Financial Controller at
Bovis Homes.
Other roles
Director of Creative Folkestone
(appointed September 2024).
Appointed
11 March 2019
Key strengths and experience
•
Over 22 years of experience in
insurance, in a variety of roles.
•
Chartered Accountant, with
recent and relevant financial
experience and competence
in accounting (Institute of
Chartered Accountants in
England and Wales).
•
Previous roles include: Chair of
Acromas Insurance Company
Limited, main Board Director
and Chief Executive Officer
International, and finance, retail
marketing and HR roles in Legal
& General; accountant at PwC;
Vice Chair and Senior
Independent Director at Leeds
Building Society; and Trustee,
Non-Executive Director and Chair
of the Audit and Risk Committee
at Diabetes UK.
Other roles
Senior Independent Non-Executive
Director and member of the
Group Audit, Group Risk, Group
Remuneration and Group
Nomination and Governance
Committees of OSB Group plc
(appointed April 2025).
Mark Watkins
Group Chief Financial Officer
Roger De Haan
Non-Executive Chairman
Mike Hazell
Group Chief Executive Officer
Gareth Hoskin
Senior Independent Director and
Speak Up Champion
OB
AR
R
N
N
OB
Saga plc
Annual Report and Accounts 2026
62
Appointed
1 September 2022
Key strengths and experience
•
Founder of two successful digital
businesses.
•
Specialist in digital
transformation, innovation
and de-risking the delivery
of new services.
•
Previous roles include:
Boardroom adviser on The
Apprentice USA; Non-Executive
Director of VivoPower
International plc; Non-Executive
Director of Forester Life Limited;
Non-Executive Director of
Eight Capital Partners plc; and
Non-Executive Director of
Kingswood Holdings Limited.
Other roles
1
Non-Executive Director of Telecom
Plus plc (appointed August 2025);
Chair and Non-Executive Director
of Scottish Widows Schroder
Wealth (ACD) Limited (appointed
August 2024); Non-Executive
Director and Chair of the
Management Liaison Forum of
Oberon Investments Group plc
(appointed September 2021);
and business and money expert
on ITV and Sky News.
Board experience
Strategy development and execution
Travel
Insurance
Personal finance and wealth management
Consumer facing and brand led businesses
Multi-sector executive experience
Digital and technology
Board leadership and corporate governance
Investor and stakeholder management
Risk management and audit oversight
Finance and accounting expertise
People, culture and ESG leadership
Board composition
Non-Executive Chairman
Executive Directors
Non-Executive Directors
Under 50
2
50–59
2
60–69
1
70 and over
1
Under 1 year
–
1 to 3 years
2
3 to 6 years
3
Over 6 years
1
Board age
Board tenure
Gemma Godfrey
Independent Non-Executive Director, Environmental,
Social and Governance Champion, People Champion
and Chair of Saga Personal Finance Limited
Appointed
1 September 2022
Key strengths and experience
•
Extensive non-executive
experience in fintech, insurance
broking, asset management and
accountancy.
•
Entrepreneurial perspective,
having co-founded his own data
analytics business.
•
Previous roles include: Managing
Director at Goldman Sachs; Lead
Non-Executive Board Member of
the Cabinet Office; Non-Executive
Director of Nationwide Building
Society; and Non-Executive
Appointee to Council Board of
Association of Chartered
Certified Accountants.
Other roles
Non-Executive Director and
member of the Remuneration
Committee of Persimmon plc
(appointed January 2025);
Trustee of the Institute for
Government (appointed
September 2024); Non-Executive
Director and member of Audit
and Risk Committee and
Nomination Committee of
Polar Capital Holdings plc
(appointed January 2022).
Anand Aithal
Independent Non-Executive Director
AR
N
N
R
1
The Board approved Gemma Godfrey’s new role at Telecom Plus plc, concluding that it was appropriate and that she had sufficient time to undertake the role
Saga plc
Annual Report and Accounts 2026
63
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Board activities
How culture is embedded
Culture is embedded throughout the Company by creating an
inclusive and diverse business, using data and targets to drive action
and meaningful change. It is important that colleagues have a voice
and connection is maintained through colleague surveys and
networks and by developing our external partnerships and employer
brand. The People Committee and colleague forums play a vital role
in maintaining a dialogue between colleagues and the Board and
provide a platform to explain the Group’s approach to investing
and rewarding colleagues.
During the year, the Board held six scheduled meetings and one ad hoc
meeting. The Board remained focussed on supporting the delivery of
the Group’s strategy and overseeing the continued transformation of
Saga into a simpler, lower risk and more resilient business. The Board
devoted significant time to strategic oversight, financial performance,
risk management and stakeholder engagement, while ensuring that
the Group remained well positioned to deliver sustainable long-term
value for shareholders.
The Board is satisfied that it operated effectively throughout the year
and that its activities were aligned with the Group’s purpose, strategy
and values.
As always, there was a need to ensure that the consequences of
decisions would promote the long-term success of the Company,
as well as maintain Saga’s reputation for high standards of
business conduct.
Find out more in:
Engaging with stakeholders on pages 24-25
Section 172(1) statement on page 57
The Board regularly reviews a range of information to actively monitor culture. The table below shows the key sources of data the Board tracks,
with a view to take action where adjustments or remedial action are needed. During the year, the Board was satisfied that the culture was aligned
with the Company’s purpose, values and strategy. The Board performance review provided an opportunity for the Board to consider how
Directors could lead by example and promote the desired culture.
Cultural identifier
Cultural priorities
Promoting
integrity and
openness
Valuing
DEI&B
Being responsive
to the views of
stakeholders
Culture aligned
to purpose, values
and strategy
Colleague surveys
People Champion Non-Executive Director
attendance at People Committee
Speak Up report
Diversity, equity, inclusion and belonging (
DEI&B
)
Environmental targets
Health and safety performance
Internal audit reports and findings
How the Board monitors culture
Inclusion
Personal
development
Wellbeing
Leadership
Community
FOCUSSED ON DRIVING
GROWTH IN SAGA
During the year, the Board remained focussed on making the right decisions to simplify the
Group, strengthen the balance sheet and position Saga for sustainable long-term growth,
while carefully considering the impact of those decisions on our stakeholders.
Culture framework
Reward and
recognition
Saga plc
Annual Report and Accounts 2026
64
How the Board considered
matters set out in
Section 172(1) (
S172(1)
)
of the Companies Act 2006
(the
Act
)
•
The Board considered and discussed the strategy and five-year plan for the Group and each of the
businesses. This included consideration of how to drive long-term sustainable growth through our
existing businesses.
•
The CEOs of each business unit attended every Board meeting to discuss current trading, strategy,
opportunities and risks.
•
Significant time was dedicated at Board meetings to deep dives to help with understanding how the
decisions to promote growth in existing businesses would impact the Group strategy and financial
performance.
•
Updates were provided at every meeting on the progress of the Ageas
1
partnership to ensure that the
impact on all stakeholders was considered throughout and beyond the transition period.
Stakeholder management
•
The Board discussed how to continue to deliver exceptional experiences to
customers
, while also
creating value for
shareholders
.
•
The impact on
colleagues
was considered in every decision and discussion, with a clear understanding
of the impact each decision had on colleagues, particularly important for the Insurance partnership,
where a number of colleagues transferred to Ageas
1
. Holidays and Cruise colleagues were consulted
on the changes as a result of the consolidation of the Travel businesses.
•
Regulators
were kept up to date throughout the completion of the sale of AICL and the implementation
of the partnership and were updated on how Saga would still continue to deliver good outcomes for
our
customers
.
•
The
Pension Trustees
were consulted and involved in the completion of the sale of AICL to ensure a fair
and transparent outcome for those in the pension scheme.
Challenges faced
•
Managing operational change, while maintaining customer satisfaction, high-quality levels of service and
an exceptional customer experience.
•
Regulatory considerations associated with a partnership arrangement and the sale of AICL.
•
Retention of colleagues and suppliers throughout the transition of the motor and home business and
completion of the sale of AICL.
Outcome and impact
of the decision
•
Our Holidays business benefited from the consolidation of leadership and operations across the
Travel businesses, as this resulted in improved efficiency, greater sharing of best practice and experience.
Customers also benefited from the alignment of the customer experience across the Travel offering.
This gave rise to an excellent performance over the year, with increased passenger numbers in Holidays,
an increase in Travel revenue and Underlying Profit Before Tax
2
.
•
The successful expansion of the River Cruise fleet further supported growth in our Travel business and
strengthened our position in river cruising, meeting customer demand and further enhancing our
premium travel offering.
•
The successful completion of the sale of AICL fundamentally changed the risk profile of our Insurance
operations and was a significant milestone in transforming our business operations.
•
The launch of the Ageas
1
partnership represented a major step in simplifying our operations and
reducing complexity. The partnership is now embedded within the Insurance operating model, combining
Saga’s brand and customer base with Ageas’s
1
insurance expertise to deliver best-in-class motor and
home insurance.
•
Consolidated our Holidays and Cruise businesses to form one Travel business and leadership team.
•
Expanded our River Cruise fleet, with the Spirit of the Moselle joining in the year and Spirit of the Lorelei scheduled to join in 2027.
•
Completed the sale of Acromas Insurance Company Limited (
AICL
).
•
The agreement with Ageas
1
for a 20-year partnership for motor and home insurance went live.
Considered how to maximise our
existing businesses in their strategic
and customer growth
Connection to strategic pillars
Key Board decision
Key to our strategic pillars
1
Maximising the
growth of our
existing businesses
4
Reducing debt,
while simplifying
our operations
2
Driving incremental growth
through new business lines
and products
3
Growing our customer
base and deepening
those relationships
1
3
1
Wholly owned UK subsidiaries of Ageas SA/NV
2
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Saga plc
Annual Report and Accounts 2026
65
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Board activities
continued
How the Board reached its
decision and considered
matters set out in S172(1)
of the Act
•
The Board considered the role of the Saga brand and publishing in strengthening customer engagement.
•
The long-term impact of decisions on customer trust, brand strength and sustainable growth were
discussed.
•
Directors assessed how initiatives supported the Group’s strategy to deepen customer relationships and
enhance lifetime value.
•
Every decision took into account the interests of customers and the importance of protecting the
customer experience.
•
Consideration was also given to the need to maintain high standards, including responsible use of
customer data and consent.
Stakeholder management
•
The Board discussed how to continue to deliver exceptional products and services to
customers
,
while also creating value for
shareholders
.
•
Opportunities to expand
supplier
and
partnership
relationships, which are essential for implementing
the strategy and enhancing Saga’s product and service offerings, were considered.
Challenges faced
•
Ensuring data use and consent met regulatory expectations.
•
Converting customer engagement into long-term relationships.
Outcome and impact
of the decision
•
The Publishing business expanded its content offering with the launch of the new podcast, ‘Experience
is Everything’, complementing Saga’s award-winning magazine, newsletters and magazine website.
The impact of this was to broaden Saga’s reach, deepen engagement and strengthen our position as
a trusted voice for our readers.
•
Customer engagement was strengthened through publishing and digital channels. The improved use
of data and customer insight allowed us to serve our customers more effectively, creating lasting
relationships built on trust.
•
We stopped asking customers for additional Group consent if they had already provided consent to
multiple business units, which resulted in an improved customer experience.
•
Saga Money newsletter and webinars promoting financial wellbeing continued to see increased customer
demand, which increased the engagement with customers, creating meaningful interactions which
deepen our understanding of this audience.
•
Established our Publishing business at the core of our focus on understanding and serving older people.
•
New podcast, ‘Experience is Everything’, launched in December 2025, expanding our customer reach and deepening brand loyalty.
•
Changed how customer consent was sought to avoid unnecessary duplication and protect the customer experience.
•
Continued to build awareness of our products through driving growth in customer acquisitions.
Considered how to grow our
customer base and deepen
those relationships
Connection to strategic pillars
Key Board decision
1
2
3
Key to our strategic pillars
1
Maximising the
growth of our
existing businesses
4
Reducing debt,
while simplifying
our operations
2
Driving incremental growth
through new business lines
and products
3
Growing our customer
base and deepening
those relationships
Saga plc
Annual Report and Accounts 2026
66
How the Board reached its
decision and considered
matters set out in S172(1)
of the Act
•
The Board remained focussed on reducing debt and were mindful that they needed to continue to
consider the actions required to strengthen the balance sheet, reduce financial complexity and provide
a stable, long-term funding structure.
•
This included the finalisation of corporate financing arrangements, which resulted in the repayment of the
£250.0m corporate bond and repayment and cancellation of the loan facility provided by Roger De Haan.
•
The Board recognised that the sale of AICL would remove underwriting risk and, therefore, simplify
operations.
•
The impact of the implementation of the Ageas
3
Affinity Partnership was also assessed.
Stakeholder management
•
The impact on all stakeholders was considered, including
colleagues
,
customers
,
communities
,
partners and suppliers
,
shareholders
and
investors
.
Saga Pension Scheme Trustees
were also
consulted and kept informed.
•
Transparent communication with
colleagues
, particularly those who were impacted by the sale of AICL
or the partnership arrangement with Ageas
3
.
•
Regulators
were kept informed of the corporate refinancing, partnership arrangement with Ageas
3
and
sale of AICL and were updated on how Saga would continue to deliver good outcomes and exceptional
products and services for
customers
.
Challenges faced
•
Managing complex financing, governance and transaction workstreams in parallel.
•
Multiple stakeholders to manage, across complex negotiations with multiple workstreams, while
continuing to deliver business as usual.
Outcome and impact
of the decision
•
Significant progress was made in reducing debt to £499.5m at 31 January 2026, £93.3m lower than
at the same point in the previous year, providing the Group with resilience to navigate market conditions
and deliver strong long-term returns.
•
The new credit facilities included a £335.0m term loan and a £116.6m delayed-draw term loan with HPS
Funds
4
, alongside a £33.4m Revolving Credit Facility (
RCF
) syndicated between Barclays and NatWest.
These facilities materially enhanced liquidity, increased covenant headroom and provided funding
certainty, while offering improved flexibility. The funds drawn in February 2025 enabled the full repayment
and cancellation of the £250.0m bond and repayment of the £75.0m drawings under the £85.0m loan
facility provided by Roger De Haan, which was subsequently cancelled. The existing RCF was also cancelled.
•
The successful completion of the sale of AICL to Ageas
3
for £67.5m generated net proceeds of £56.9m,
£11.4m above initial guidance, in addition to £10.0m of pre-completion dividends, and significantly
simplified Saga’s operations.
•
The successful launch of the 20-year Affinity Partnership with Ageas
3
was a major milestone in simplifying
our business. With motor new business going live, £60.0m of the total £80.0m cash consideration was
received and the partnership combined Saga’s brand and customer base with Ageas’s
3
expertise to
deliver best-in-class motor and home insurance.
•
The simplification of operations created a more agile business that can deliver efficiently and at scale,
will reduce the level of technical, operational and regulatory activity that is undertaken and leverage the
capabilities and infrastructure available through the new Insurance partner.
•
The Group’s governance structure was simplified. The merger of the Audit and Risk Committees
facilitated a more focussed discussion on internal controls and risk management and alignment of
strategy. Following the year end, and in line with the continued simplification of our operating model,
the Innovation and Enterprise Committee was disbanded.
Simplification of the Group’s operating model
and governance structure as a result of being
a lower risk, less complex business
Connection to strategic pillars
Key Board decision
1
4
•
Finalised financing arrangements to strengthen the balance sheet and reduce financial complexity.
•
Ensured that the Board was focussed on strategic discussions at every meeting.
•
Merged the Audit and Risk Committees to align with the Group’s simplified operating model.
3
Wholly owned UK subsidiaries of Ageas SA/NV
4
Certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed, advised or controlled by HPS Investment Partners, LLC or its subsidiaries
Saga plc
Annual Report and Accounts 2026
67
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Board activities
continued
How the Board reached its
decision and considered
matters set out in S172(1)
of the Act
•
The Board considered how the arrangement would create incremental growth opportunities aligned to
the Group’s strategy.
•
The terms of the partnership with NatWest Boxed were negotiated to ensure that the collaboration would
make the most of combining Saga’s deep customer insight with NatWest’s scale and NatWest Boxed
technology.
Stakeholder management
•
The Board reviewed ways to maintain quality products and services for
customers
, while increasing
shareholder
value.
•
Options to expand
supplier
and
partnership
relationships, essential for Saga’s strategy and enhancing
its products and services, were reviewed.
Challenges faced
•
Ensuring incremental growth initiatives were appropriately governed and aligned to the Group’s strategy.
•
Managing dependence on partners, while protecting customer experience and brand standards.
•
Balancing the pursuit of growth opportunities with the need to avoid additional complexity or risk.
Outcome and impact
of the decision
•
The partnership brought together two market leaders to deliver a new and innovative suite of savings
products that are competitive, flexible and tailored for Saga’s customer demographic.
•
The arrangement supported the Group’s strategy to broaden Saga Money’s product range, drive
increased volumes and improve commercial terms, while remaining in line with the intention to extend
capital-light revenue streams.
•
Launch of strategic partnership with NatWest Boxed to provide a savings product tailored for our customers, to support growth in Saga
Money products.
Expanded growth through new
business lines and products
Connection to strategic pillars
Key Board decision
2
Key to our strategic pillars
1
Maximising the
growth of our
existing businesses
4
Reducing debt,
while simplifying
our operations
2
Driving incremental growth
through new business lines
and products
3
Growing our customer
base and deepening
those relationships
Saga plc
Annual Report and Accounts 2026
68
Board leadership and Company purpose
At 31 January 2026, the Board comprised seven Directors with a broad set of complementary skills, industry expertise and each
bringing a different perspective.
On 27 January 2026, the Board reviewed and approved a document detailing the division of responsibilities and roles of the Chairman,
Group CEO, Senior Independent Director, all Committee Chairs and the Non-Executive Directors nominated ESG Champion, Speak Up
Champion and People Champion. This is available on our corporate website (www.corporate.saga.co.uk/about-us/governance).
Member
Role
Max. possible
meetings
Attendance
Roger De Haan
Non-Executive Chairman (leadership, Board governance, setting
the agenda and facilitating open Board discussions, performance
and shareholder engagement)
7
7
Mike Hazell
Group CEO (Group performance and developing strategy for
Board approval)
7
7
Mark Watkins
Group CFO (Group financial performance, including creation of
the budget and five-year plans for recommendation to the Board)
7
7
Independent Non-Executive Directors
Role
Max. possible
meetings
Attendance
Anand Aithal
Participate in, assess, challenge and monitor Executive Directors’
delivery of the strategy (within risk and governance structures);
financial controls and integrity of financial statements; and
Board diversity. Evaluate and appraise the performance of
the Non-Executive Chairman, Executive Directors and
senior management.
7
6
Gemma Godfrey
1
(ESG Champion)
7
7
Julie Hopes
1
(People Champion)
7
6
Gareth Hoskin
(Speak Up Champion)
7
7
Our Board
A document summarising the matters which are reserved for the
Board was last considered on 27 January 2026. These include
the following:
Strategy and management
•
Setting the Group’s purpose, values, strategy and standards and
ensuring these align with our culture.
•
Approving the strategic direction, budgets, forecasts and
objectives, as well as their successful implementation.
•
Overseeing our operations, including policies relating to regulatory,
financial and operational matters.
•
Any decision which may have a material impact on the Group.
For example, new business activity, significant expansion,
partnerships or diversification/cessation of existing businesses.
Structure and capital
•
Approving changes relating to our capital, corporate, management
or control structures; and borrowings and guarantees, other than
in the normal course of business.
Financial items, risk management and internal controls
•
Approving the interim and preliminary results and Annual Report
and Accounts, alongside material capital or operating expenditure
outside predetermined tolerances or beyond agreed delegated
authorities.
•
Ensuring maintenance of a sound system of internal controls,
including risk appetite and policies, such as the Risk Policy.
Contracts and business transactions
•
Approving capital projects which are strategically material, are not
in the usual course of business or are outside of normal financial
limits in place.
•
Conducting post-investment reviews which were not considered in
detail by the Audit and Risk Committee or where the Board decides
a full review is required.
•
Joint ventures, material arrangements with customers or suppliers
and major investments.
Communication and engagement with stakeholders
•
Considering the balance of interests between stakeholders,
including shareholders, customers, colleagues and the communities
in which we operate.
•
Ensuring that independent channels are available for colleagues to
engage and raise any matters of concern.
See pages 24-25 for details of the Board’s role in stakeholder
engagement, which supports Directors’ duties under Section 172(1)
of the Companies Act 2006.
Shareholder engagement
The Board seeks feedback from our shareholders on the Company’s
performance against strategy and actively monitors their views.
Full details of how we engage with our shareholders can be found in the
Strategic Report on page 25. In addition, an Investor Relations report
is tabled at each Board meeting.
We recognise that we have a significant number of retail shareholders,
many of whom are also our customers. We engage with this group
through arranging presentations via the Investor Meet Company
platform, which provides an opportunity for our Group CEO and
Group CFO to answer any questions they may have. Shareholders also
have the opportunity to meet the Directors at our Annual General
Meetings (
AGM
).
AGM
The AGM will be held on 30 June 2026 at 11.00am at the offices
of Herbert Smith Freehills Kramer LLP, Exchange House, Primrose
Street, London, EC2A 2EG. Full details, and an explanation of business
to be considered at the meeting, will be provided in the Notice of AGM.
A copy will be available on Saga’s corporate website in due course
(www.corporate.saga.co.uk).
Board roles
1
Julie Hopes resigned from the Board with effect from 27 February 2026. Gemma Godfrey was appointed as the Non-Executive Director designated as the Board’s People
Champion with effect from 23 March 2026
Saga plc
Annual Report and Accounts 2026
69
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Division of responsibilities
Purpose:
To ensure that Saga’s data
is actively managed, controlled and
monitored in accordance with the Group’s
data governance framework and oversee
the associated risks.
Data Management Committee
Purpose:
To support and monitor delivery
of the Group’s ESG strategy and targets
and to drive ESG accountability across the
business units.
ESG Steering Committee
Our governance framework
An annual review of the governance framework was undertaken by
the Company to ensure it continued to allow business units to operate
autonomously within a Group framework. The Data Management
Committee continues to consider and support our data strategy.
The Audit and Risk Committee Chair serves as the Speak Up
Champion. The Chair of the Remuneration Committee is the
nominated People Champion and regularly attends the People
Committee. A Non-Executive Director is appointed as the ESG
Champion and regularly meets with the ESG and Sustainability
Manager, who attends Operating Board and Board meetings to
discuss ESG strategy and targets. The ESG Steering Committee
meets regularly and reports to the Operating Board. For more
information on the governance put in place to monitor ESG strategy,
see page 42.
The below reflects the Company’s current governance framework.
Purpose:
To review and monitor the
leadership needs of the Board and senior
management and support the Company’s
continued ability to recruit and develop the
level and balance of skills, experience and
knowledge required to ensure its long-term
success.
Purpose:
To oversee the integrity of the
Group’s financial reporting, the effectiveness
of its risk management and internal controls
and the independence and performance of
internal and external auditors. Confirm that
the Group has robustly assessed its principal
risks, including those that could threaten
its business model, performance, solvency
or liquidity.
Find out more in our
Audit and Risk Committee Report
on pages 75-79
Find out more in our
Nomination Committee Report
on pages 72-74
•
Approve strategic direction and ensure its
successful implementation.
•
Leadership and management of the Group,
including setting the Group’s purpose, values
and standards and aligning these with culture.
•
Encourage innovation and consider the views,
interests and needs of key stakeholders,
including colleagues, customers, communities
and shareholders.
•
Ensure that independent channels are
available for colleagues to engage and raise
matters of concern. This includes discussing
an annual report presented by the
Non-Executive Director who acts as
Speak Up Champion.
•
Ensure oversight of compliance with
statutory and regulatory obligations.
•
Ensure an effective internal controls and risk
management framework is maintained.
•
Assess the potential impact of decisions.
•
Monitor ESG strategy in all business units
across the Group.
Board
Nomination Committee
Audit and Risk Committee
Operating Board
Purpose:
To support the Group CEO in
the performance of duties in relation
to the management and day-to-day running
of the Group.
Duties:
•
Implement the Group’s strategy.
•
Act as guardians of the brand, customer
and data strategy.
•
Cultural leadership and people strategy.
•
ESG strategy and review/monitoring of
targets. Oversee ESG Steering Committee.
•
Review principal risks and uncertainties
across the Group.
•
Ensure effective implementation of Group
risk policy and internal controls framework in
a consistent manner across all business areas.
•
Monitor performance of business units
against targets, objectives and key
performance indicators set by the Board.
•
Review and discuss talent management and
succession planning throughout the Group.
•
Review and monitor culture, diversity, equity,
inclusion and belonging and colleague
engagement metrics.
•
Manage risk and conduct, review Group
risk and internal audit and assurance plans,
and report potential, or actual, breaches
of regulation or policy to the Board.
•
Oversee Data Management Committee.
Purpose:
To support our continuous listening strategy, where all colleagues can speak up and share the things that matter to them, enabling our
leadership to act and respond to feedback. This gives the employees a voice in the boardroom.
People Committee
Purpose:
To determine the policy and
terms and conditions of employment,
remuneration/compensation and benefits
of senior executives, and to review workforce
remuneration and incentive programmes to
ensure alignment with culture and strategy
and determine share-based arrangements.
Find out more in our
Directors’ Remuneration Report
on pages 80-107
Remuneration Committee
In 2024, the Corporate Governance Reforms (
CGR
) Steering
Committee, a management group, was established to oversee
delivery of the CGR and the work needed to ensure the Group’s
2
nd
and 3
rd
line control environment meets the requirements of
the Economic Crime and Corporate Transparency Act 2023 and
Provision 29 of the UK Corporate Governance Code. Its purpose
is to support and monitor implementation of the reforms by
supervising the Group’s preparatory work and key project
workstreams on material controls in anticipation of the new
CGR requirements.
Since the year end, the Board decided to disband the Innovation and
Enterprise Committee. The Innovation and Enterprise Committee
had been established to assess the strategic alignment of growth
proposals with the Company’s purpose and oversight of this is now
undertaken directly by the Board.
Saga plc
Annual Report and Accounts 2026
70
Composition, succession and evaluation
Board performance review
The Board performance review consisted of all Directors participating in an interview conducted by our Senior Independent Director, with
support from the Group Company Secretary. Areas of focus included execution of strategy, Board dynamics and ways of working, Board
composition, skills and succession, and Board effectiveness.
Feedback was also requested on the effectiveness of the Board Committees and the performance of the Non-Executive Chairman and
individual Directors. The Company Secretary also sought views from all committee attendees and external advisers. The Senior
Independent Director and the other Non-Executive Directors met to appraise the Non-Executive Chairman’s performance and the
Non-Executive Directors had regular meetings with the Non-Executive Chairman at which their performance was discussed.
The members of the Board
The Board considers the composition and size of the Board to be
appropriate, taking into account the independence of character, skills
and integrity of, and different approach taken by, all the Directors.
The Nomination Committee is considering the skills and Board
composition required for the Group’s future strategic direction.
Our Directors have a broad range of experience in a variety of markets
and sectors, particularly in the areas of travel, insurance, financial
services, customer service, brand management, strategy and asset
and risk management, all of which are invaluable to Saga.
Our Non-Executive Directors met regularly during the year without
Executive Directors present and provided objective, rigorous and
constructive challenge to management.
The Senior Independent Director acts as a sounding board for the
Non-Executive Chairman.
Independent Non-Executive Directors and
Board composition
We continue to comply with the Code recommendation that at least
half of our Board, excluding the Chairman, are Non-Executive
Directors whom the Board considers to be independent.
For the year ended 31 January 2026, the Board considered Anand
Aithal, Gemma Godfrey, Julie Hopes
1
and Gareth Hoskin to be
independent Non-Executive Directors, free from any business or
other relationships that could materially interfere with the exercise of
their independent judgement or objective challenge of management.
Annual re-election
All Directors are required to stand for annual re-election at the
Company’s AGM. The Board’s view is that each of the Directors
standing for re-election should be re-appointed.
We believe that they have the skills required for the Board to discharge
its responsibilities, as outlined in each of their biographies set out on
pages 62-63.
The details of the specific reasons why each Director’s contribution
continues to be important to the Company’s long-term sustainable
success will be included in our Notice of AGM.
DEI&B
The Group has a DEI&B Policy and, during the year, forums were held
on topics relating to DEI&B, which provided valuable insight around
how colleagues felt relating to matters such as inclusivity, age,
ethnicity and gender. The Board recognises that it is important to
consider the need to have an inclusive approach for all colleagues.
For details of the gender split of our Board and senior management,
see page 48.
Find out more in:
Environmental, Social and Governance on pages 41-48
Nomination Committee Report on pages 72-74
Action taken as a result
of the 2024/25 evaluation
Areas of focus for 2026/27
The review concluded that the Board had worked
well during the year, using the governance
framework to support the strategic review
of the Group and significant project work.
Actions taken included:
•
Growth strategy –
Board meetings were
restructured to promote a strong and
consistent focus on the Group’s growth
strategy throughout the year. Discussions
routinely considered brand perception,
competitive dynamics, the impact of
technological change and the needs of key
stakeholders, with customers remaining
central to all discussion.
•
Board ways of working –
Active consideration
was given to how the Board could enhance its
ways of working by making greater use of
Directors’ skills and experience to support
executive management in driving growth.
Board papers became increasingly forward
looking, with a clearer emphasis on strategic
and external factors and well defined outcomes.
•
Reporting –
Oversight of strategic delivery
was strengthened through enhanced
reporting, including regular updates from
individual businesses against their growth
plans. Progress in relation to the Insurance
partnership with Ageas
2
and the sale of AICL
was also closely monitored.
•
Governance framework –
The governance
framework was continuously reviewed to
ensure it reflected the Group’s simplified
operating model, while maintaining high
standards in overseeing risk management
and internal controls.
Conclusions from 2025/26
evaluation
Board focus.
The Board successfully
oversaw a demanding period of execution,
simplification and delivery. There is clear
agreement and a shared understanding
of the future strategic plan.
Board dynamics and ways of working.
The Board provides a safe space for
discussion, with openness about
successes and challenges. It operates
in a constructive and respectful manner,
with a high level of trust in management.
Board composition, succession and
skills.
The Board is recognised as highly
committed, engaged and deeply
knowledgeable. It is vital that the Board
composition reflects the operating model
of the Group and is shaped to deliver the
next phase of growth.
Board effectiveness.
Board papers have
improved in clarity and structure, with key
issues highlighted.
Board Committees.
Committee
effectiveness was generally viewed
positively, with a healthy level of challenge
and debate in meetings.
Focus on future strategy.
The Board will
consider how to spend time in the most
effective way, with a balance of discussions
around operational delivery and
medium- to long-term strategy.
Board culture.
Consideration will be given
to establish how the quality of debate can
be strengthened further, ensuring that all
perspectives are heard.
Information, cadence and use of time.
The deep dives into key strategic areas and
businesses will continue, with a focus on
articulating key areas the Board is being
asked to address and allowing sufficient
time for a thorough discussion.
Board composition.
The Nomination
Committee will prioritise identifying the
skills and Board composition required to
support the Group’s future strategic
direction.
Committees.
The purpose of each Board
committee will be refreshed, to ensure
there is a consistent understanding of roles
and responsibilities. The way in which
insights are surfaced at the Board will be
reviewed, to ensure that matters for
escalation or reporting are communicated
in the most effective way possible.
1
Julie Hopes resigned from the Board with effect from 27 February 2026
2
Wholly owned UK subsidiaries of Ageas SA/NV
Saga plc
Annual Report and Accounts 2026
71
Financial statements
Additional information
Governance
Strategic Report
The Committee’s responsibilities
•
Review the structure, size and composition of the Board
needed to ensure that the right balance of skills, experience
and knowledge are in place.
•
Consider how to develop a diverse pipeline in succession
planning and talent development of Executive Directors and
senior executives.
•
Evaluate the independence, experience, diversity and
knowledge of the Board.
•
Identify and nominate candidates to fill Board and Committee
vacancies.
•
Review Board performance evaluation results in relation to
Board composition.
The Committee’s Terms of Reference were reviewed
during the year (approved by the Board on 27 January 2026)
and are available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Committee evaluation
An evaluation of the Committee’s performance took place during
the year, as part of the Board performance review (for details see
page 71).
The inherently complex nature of the Committee’s remit and the
vital role it plays in ensuring that the right skills are in place for the
next phase of growth was acknowledged. It was agreed that a
review of the Committee’s purpose and remit in an ever increasing
regulatory environment would strengthen understanding and
make the Committee even more effective.
Committee composition and attendance
Key actions in 2025/26
•
Changes to the Board and Committee composition to ensure
that the skills and experience of Directors supported the
delivery of Group strategy.
•
Continued discussion and focus on succession planning and
talent development.
•
Reviewed progress against set targets relating to diversity,
equity, inclusion and belonging (
DEI&B
).
Priorities for 2026/27
•
Consider and review the skills and board composition required
to support the Group’s future strategic direction.
•
Continued focus on succession planning for Executive and
Non-Executive Directors and senior management.
•
Monitor how management is developing its current and future
leaders and driving greater diverse representation at more
senior levels.
•
Ensure that Group culture supports the right environment
for talent development.
1
Peter Bazalgette resigned from the Board with effect from 9 April 2025 and Gareth Hoskin became Chair, and Julie Hopes a member, with effect from the same date
2
Julie Hopes resigned from the Board with effect from 27 February 2026
Nomination Committee Report
“The Committee’s focus this year centred
on several core priorities in response to the
Group’s evolving strategic landscape, to ensure
that the Board has the right skills in place as
Saga continues to advance its transformation.”
Gareth Hoskin
Chair, Nomination Committee
Corporate Governance Statement
Members
(majority are Independent
Non-Executive Directors)
Member
since
Max.
possible
meetings
Attendance
Gareth Hoskin
1
(Chair)
31 Dec 2023
4
Peter Bazalgette
1
30 Sep 2022
1
Anand Aithal
31 Dec 2023
4
Roger De Haan
5 Oct 2020
4
Gemma Godfrey
31 Dec 2023
4
Julie Hopes
2
9 April 2025
3
Board composition
Succession planning and
talent development
DEI&B
Board evaluation
c.50%
c.20%
c.15%
c.15%
What we did during the year
Time spent on matters
Saga plc
Annual Report and Accounts 2026
72
Dear shareholder,
The Nomination Committee’s (the
Committee
) focus this year
centred on several core priorities in response to the Group’s evolving
strategic landscape, to ensure that the Board has the right skills in
place as Saga continues to advance its transformation. During the
year, the Committee oversaw changes to Board and Committee
composition and spent a significant amount of time ensuring the
Board and Committee framework aligned with the Group’s evolving
operating model.
Succession planning, skills assessment and diversity remained
central themes throughout the year. The Committee reviewed the
depth and strength of leadership pipelines and considered capability
requirements arising from strategic change. Since the year end, and
following the resignation of Julie Hopes, we have started a Board
composition review to ensure that we have the right knowledge and
experience in place to support delivery of the Group’s strategy. The
Committee also maintained clear focus on DEI&B, monitoring progress
against targets and discussing areas requiring further improvement.
Board composition
As highlighted in last year’s report, Steve Kingshott and Peter
Bazalgette resigned from the Board with effect from 9 April 2025.
These changes to the Board followed the successful agreement of the
Insurance Underwriting sale and Affinity Partnership with Ageas
3
and
reflected the Group’s new simplified business model.
Following these changes, I was appointed as Senior Independent
Director, Chair of the Nomination Committee and became a member
of the Remuneration Committee. Additionally, Julie Hopes became a
member of the Nomination Committee.
During the year, the Committee also considered and recommended
the merger of the Audit and Risk Committees to align with the Group’s
simplified operating model, noting the benefits of doing so, including
facilitating a more focussed discussion on internal controls and risk
management and alignment of strategy. The Board ultimately
approved the merger and that I chair the newly combined Audit and
Risk Committee, with Anand Aithal, Gemma Godfrey and Julie Hopes
as members.
The Committee considered the proposal to re-appoint Anand Aithal
and Gemma Godfrey as Non-Executive Directors when they were
proposed for re-appointment after serving their first three-year
terms and the Board approved the Committee’s recommendation
to re-appoint them.
Since the year end, Julie Hopes resigned from the Board with effect
from 27 February 2026. The Board subsequently approved the
Committee’s recommendation that Gemma Godfrey be appointed
Chair of the Remuneration Committee and the Non-Executive
Director designated ‘People Champion’.
The Committee also considered the future of the Innovation and
Enterprise Committee and the Board approved the recommendation
that this be disbanded as its duties were now being undertaken at the
Board, in line with the simplification of the Group’s business model.
Committee members agreed that no other changes to committee
membership should be made at this stage. It is recognised that this
means that Committee membership for the Audit and Risk
Committee and Remuneration Committee is below the suggested
Code requirements but it was felt that this is appropriate in the
circumstances and will be reviewed once a decision has been made
about future Board composition. In the meantime, the Committee
was comfortable that these committees had the appropriate skills
to fulfil their duties.
Succession planning and talent development
During the year, the Committee received comprehensive updates on
talent management across the senior leadership population, including
the reshaped Operating Board.
The Committee reviewed the performance, strengths and
development priorities of the Group Chief Executive Officer and
Group Chief Financial Officer, as well as succession plans for each
of the Operating Board. Given the scale of the business, it was
recognised that it was not realistic to have named successors for
every role and that the solution lay in developing talent within the layers
below. It was accepted that succession for certain roles would need to
be managed externally.
The Committee discussed how the renewed focus on a consistent,
Group-wide performance and talent framework, supported by
external assessment and coaching for our senior leaders, would
strengthen leadership capability and succession depth.
Throughout the year, the Committee monitored progress in building
a more agile, future-ready and diverse leadership pipeline to support
the Group’s strategic ambitions and remains committed to overseeing
the development of current and future leaders. It was agreed that it
would be beneficial for the Board to have visibility of the expertise and
corporate knowledge, as well as leadership capabilities within the
Group. This is achieved through the deep dive sessions that take place
at the Board, which senior leaders are invited to attend.
Independence and election of Directors
After the year end, but prior to publication of this Annual Report and
Accounts, the Committee considered the profiles of the Directors,
each Director’s independence, contribution and time commitment
necessary to perform their duties and recommended to the Board
that all should be put forward for re-election at the 2026 Annual
General Meeting.
The UK Corporate Governance Code 2024 requires that at least
half of the Board, excluding the Chairman, are considered to be
independent Non-Executive Directors. At 31 January 2026, four of
the seven (57%) Board members were independent Non-Executive
Directors, with other members being the Non-Executive Chairman
and two Executive Directors.
DEI&B
The Committee considered the approach to evaluate performance,
talent and succession and the progress made in creating a diverse and
high-quality pipeline.
Committee members received an update on the Company’s inclusion
strategy, including progress made to date and the key priorities for
the coming year.
The Group continued to strengthen its inclusion work, and maturity
in DEI&B has improved, supported by continued collaboration with
external partners, including Working Together and Welcome to all
in Hospitality, Travel & Leisure. Key achievements include strong
colleague engagement, growth of colleague networks, delivery of
inclusive events, and progress on gender representation in leadership.
Further information can be found in the 2026 ESG Report.
The Company has a DEI&B Policy in place, with the aim of raising
awareness of fairness and equality in the workplace and outlining how
everyone is responsible for creating an inclusive environment that
respects the dignity and diversity of all people. This policy applies to
the Group, including the Board, and is linked to Company strategy.
All colleagues must report any breaches, whether actual or perceived,
to their line manager or to the People team. There is also the option to
report on an anonymous basis via the Company’s Speak Up process.
3
Wholly owned UK subsidiaries of Ageas SA/NV
Saga plc
Annual Report and Accounts 2026
73
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Nomination Committee Report
continued
Our Board-agreed data-driven targets form part of the Company’s
Environmental, Social and Governance strategy. For more
information, see page 48. It is recognised that further progress is
needed against the data-driven targets and the Company remains
committed to achieving them.
At 31 January 2026, the Board had a 29% gender balance of women
4
,
and one member is from an ethnic minority background. At the same
date, the gender balance was 42% for the Operating Board and senior
layers of management below Board level
5
. The Committee recognises
that the gender balance on the Board reduced further following Julie
Hopes’ resignation and this does not meet the targets set out in the UK
Listing Rules on board diversity. This is something the Board remains
committed to improving and will be a key focus when reviewing the
executive and non-executive leadership needs of the organisation.
Details of the gender balance of those in senior management can be
found on page 48.
Targets are disclosed on our corporate website (www.corporate.
saga.co.uk/about-us/environmental-social-and-governance/).
The intention remains to increase female representation in the
Senior Management Team and above to 50%, and 40% on the Board,
by 2027.
Board evaluation
It was decided that the best way to stimulate the Board’s thinking on
how they can carry out their role and focus on continually improving
their performance was for me to conduct interviews with each of the
Directors, with the support of the Group Company Secretary.
The interviews centred on execution of strategy, Board dynamics and
ways of working, Board composition, skills and succession, and Board
and Committee effectiveness.
The evaluation report was discussed by the Board and this confirmed
that the Board were clear on the strategic direction of the Group and
had successfully overseen a demanding period of execution,
simplification and delivery. More details can be found on page 71.
Gareth Hoskin
Chair, Nomination Committee
4
At the date of signing this report, female representation on the Board was 17%
5
While Provision 23 of the UK Corporate Governance Code defines ‘senior management’ as the layer below the Board and the Company Secretary and their direct reports,
we believe it most appropriate to disclose the gender balance of our Operating Board and Senior Leadership Team
Saga plc
Annual Report and Accounts 2026
74
Audit and Risk Committee Report
“During the year, the Board agreed to combine
the Audit and Risk Committees into a joint
committee, in line with our strategy to simplify
our business model, resulting in a more
efficient approach to managing the Group’s
internal controls and risk framework.”
Gareth Hoskin
Chair, Audit and Risk Committee
The Committee’s responsibilities
•
Consider the integrity of the financial statements.
•
Review the adequacy and effectiveness of the Company’s
internal control and risk management framework.
•
Monitor the effectiveness of the Company’s Internal Audit and
Assurance (
IAA
) and Finance functions and the external auditor.
•
Review and advise the Board on the Group’s overall risk
appetite, tolerance, strategy and current risk exposure.
•
Review the IAA work plan.
•
Monitor principal risks and uncertainties (
PRUs
) and consider
the Group’s capability to identify, and manage, new and
emerging risk.
•
Review material breaches of risk limits and adequacy of action.
•
Provide qualitative and quantitative advice to the Remuneration
Committee on risk weightings.
•
Review the Group’s interim and preliminary financial
statements and accounting policies.
•
Review and approve key judgements and estimates used as
a basis for preparing the Group’s financial statements.
•
Approve the remuneration and terms of engagement and
determine the independence of the external auditor.
•
Monitor the scope of the annual audit and the extent of
non-audit work undertaken by the external auditor.
•
Provide recommendations on the fair, balanced and
understandable assessment, going concern basis of
preparation and viability statements.
•
Ensure that Speak Up and anti-fraud systems are in place
and monitored.
Following the combination of the Audit and Risk Committees,
the Committee’s Terms of Reference were revised in July 2025.
The current Terms of Reference were approved by the Board on
27 January 2026 and are available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Committee evaluation
A review of the Committee’s performance took place during the year
as part of the Board performance review (for details see page 71).
The review concluded that the Committee was well run,
disciplined and effective, with strong chairing and constructive
engagement with management. The decision to merge the Audit
and Risk Committees was seen as positive and there was
confidence in the Committee’s scrutiny of financial reporting,
internal controls and PRUs.
Committee composition and attendance
Members
(all are independent
Non-Executive Directors)
Member
since
Max.
possible
meetings
Attendance
Gareth Hoskin (Chair)
4 Apr 2019
3
Anand Aithal
17 Nov 2022
3
Julie Hopes
1
31 Dec 2020
3
Audit Committee (merged with Risk Committee July 2025)
Gareth Hoskin (Chair)
4 Apr 2019
2
Anand Aithal
17 Nov 2022
2
Julie Hopes
31 Dec 2020
2
Risk Committee (merged with Audit Committee July 2025)
Julie Hopes (Chair)
4 Apr 2019
1
Gemma Godfrey
17 Nov 2022
1
Gareth Hoskin
31 Dec 2020
1
The Board is satisfied that Gareth Hoskin provides recent and
relevant financial expertise through his chartered accountancy
qualification and career experience. The Committee members
also demonstrate appropriate independence and collectively
bring strong financial and commercial experience across
industries, including those relevant to the Company. Details of
their skills and experience are set out in the Directors’ biographies
on pages 62–63.
Key actions in 2025/26
•
Integrated financial control systems to support and enhance
the control framework, including the implementation of and
transition to a new general ledger system.
•
Supported work to improve the Group’s liquidity exposure,
leading to the refinancing agreed with HPS Funds
2
.
•
Continued review of the Corporate Governance Reforms (
CGR
)
to enhance and align the control environment.
•
Supported alignment of Group controls required as a result of
the Ageas
3
partnership.
•
Commenced the external audit re-tender process in respect of
the 2027/28 audit.
•
Supported the Board in forming a common view of the key risks
to the business and agreeing appropriate risk appetites.
Priorities for 2026/27
•
Monitoring progress of the CGR preparation work to ensure
compliance with Provision 29 of the UK Corporate
Governance Code.
•
Completing the competitive re-tender process in respect of the
2027/28 audit.
•
Continuing to support the Board to form a common view of the
key risks to the business and agree appropriate risk appetites.
Financial statements
(including key judgements
and estimates)
Internal financial
controls
Internal audit,
including Speak Up
External audit
c.35%
c.10%
c.20%
c.15%
Risk management,
including strategy, policy,
appetites and compliance
c.20%
What we did during the year
Time spent on matters
1
Julie Hopes resigned from the Board with effect from 27 February 2026
2
Certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed, advised or controlled by HPS Investment Partners, LLC or its subsidiaries
3
Wholly owned UK subsidiaries of Ageas SA/NV
Saga plc
Annual Report and Accounts 2026
75
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Audit and Risk Committee Report
continued
Dear shareholder,
During the year, the Board agreed to combine the Audit and Risk
Committees (the
Committees
) into a joint committee (the
Committee
), in line with our strategy to simplify our business model,
resulting in a more efficient approach to managing the Group’s
internal controls and risk framework. I would like to thank Julie Hopes
for chairing the Risk Committee and for the contribution and expertise
provided during her tenure.
The Committees supported the Board during a year which saw
significant progress in achieving key strategic goals, including the sale
of our Insurance Underwriting business, launch of our long-term
strategic partnership with Ageas
4
and improvement in the Group’s
liquidity by agreeing corporate refinancing with HPS Funds
5
. The
Committee also oversaw the successful implementation of a new
cloud-based general ledger system, which aims to improve the control
environment and standardise and simplify processes.
The Committee received regular updates from the CGR Steering
Committee, a management group established to support, monitor
and deliver actions needed to ensure timely compliance with revised
requirements set out in the Code and relevant legislation.
The Committee was focussed on providing independent challenge
and overseeing the Group’s financial reporting and internal controls,
assessment of the top risks facing the business and the design and
effectiveness of critical controls. It was also responsible for monitoring
risk maturity and supporting the business in responding to the
challenges it faced.
Our report outlines how we have carried out our responsibilities
over the period, including our oversight of the IAA function and
our management of the relationship with the external auditor,
KPMG LLP (
KPMG
).
Reporting
The preliminary and interim results underwent thorough review and
scrutiny, with attention given to the implementation of key accounting
policies and the exercise of significant judgement. The processes and
outcomes in these areas were carefully evaluated. Throughout the
year, KPMG delivered reports focussed on topics identified as
presenting substantial audit risk.
Significant issues
The Committee exercises its judgement in determining the
accounting matters that are of particular importance to the financial
statements. Any such matters are subject to discussions between
senior management, the Group Chief Financial Officer and KPMG
as part of the audit process.
Letter from the Financial Reporting Council (
FRC
)
On 7 January 2025, the Group received a letter from the FRC,
requesting further information on certain matters covered in
the Annual Report and Accounts for the financial year ended
31 January 2024. Specifically, the FRC asked:
•
why the customer option to fix insurance premiums at the first and
second renewal points, under the three-year fixed-price policies,
was accounted for as a separate performance obligation and not as
being within the boundary of the underlying insurance contract; and
•
for further details concerning the judgement that, where insurance
contracts were also underwritten by the Group, the arrangement of
the insurance contract was a distinct and separate service from the
insurance underwriting services.
The Committee reviewed management’s responses and noted that
the FRC closed the case in June 2025, having confirmed they were
satisfied with the responses received.
Liquidity, going concern and viability
The Committee performed a detailed review of the Group’s
projected cash flow, borrowing capacity and the covenants within
its borrowing facilities, based on papers prepared by management.
The Committee discussed management’s ongoing measures to
reduce operating costs and mitigating the liquidity PRU exposure
by facilitating the full syndication of the facility with HPS Funds
5
.
Find out more in:
Note 2.1 of the financial statements on page 123
Viability Statement on page 55
Independent Auditor’s Report to the Members of Saga plc on
pages 112-117
Valuation of goodwill
The Committee considered indicators of impairment of the carrying
value of Insurance goodwill at 31 July 2025 and the conclusion that
there were no new indicators of impairment at that date.
At 31 January 2026, the Committee reviewed management’s
impairment assessment prepared in line with International
Accounting Standard (
IAS
) 36 ‘Impairment of Assets’. The Committee
considered the assumptions made by management in relation to the
calculation of the discount and terminal growth rates; and the
robustness of the underlying cash flow forecasts following the
transition to a partnership model with Ageas
4
for motor and home
insurance products in reaching the conclusion that no further
impairment was required at the balance sheet date.
Find out more in:
Note 16 of the financial statements on pages 150-151
Independent Auditor’s Report to the Members of Saga plc on
pages 112-117
Valuation of the parent company’s investment in subsidiaries
The recoverability of the carrying value of the investment in
subsidiaries held on the balance sheet of the Company was evaluated
by the Committee. Cash flow forecasts, discount rates, valuation
methodology and stresses were all considered as part of
management’s analysis used in the calculation to determine that a
reversal of impairments recorded in previous years of £181.1m would
be recognised at 31 January 2026.
Find out more in:
Note 2 of the Company financial statements on pages 192-193
Independent Auditor’s Report to the Members of Saga plc on
pages 112-117
Valuation of Ocean Cruise ships
The Committee reviewed indicators of impairment for the Group’s
Ocean Cruise ships at 31 July 2025 and 31 January 2026.
Management reviews concluded that there were no indicators of
impairment at either date. Analysis considered key elements of the
trading outlook, change in the useful economic lives and the residual
values of the assets due to any changes in climate change, the discount
rate and technological obsolescence.
Find out more in:
Note 17 of the financial statements on page 152
Independent Auditor’s Report to the Members of Saga plc on
pages 112-117
4
Wholly owned UK subsidiaries of Ageas SA/NV
5
Certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed, advised or controlled by HPS Investment Partners, LLC or its subsidiaries
Saga plc
Annual Report and Accounts 2026
76
Acromas Insurance Company Limited (
AICL
) disposal
On 1 July 2025, Saga completed the disposal of AICL. The Group
reported an initial loss on disposal of £23.9m at 31 July 2025.
Following completion of the final balance sheet, sale proceeds
increased by £4.5m, reflecting adjustments to deferred tax balances,
a receipt of a Section 75 contribution of £3.2m into the Saga Pension
Scheme after the half year and the recognition of further costs of
disposal. The revised loss on disposal is £10.2m.
Find out more in:
Note 38 of the financial statements on pages 182-185
Independent Auditor’s Report to the Members of Saga plc on
pages 112-117
Carrying value of other material assets
The Committee reviewed other items of the Group’s property, plant
and equipment, including assets classified as held for sale, River Cruise
ships and software intangibles, for indicators of impairment. In
undertaking this review, the Committee considered key aspects of the
trading outlook, changes to useful economic lives, and residual values
in light of the Group’s evolving business model and technological
developments. As a result of this assessment, impairments totalling
£1.9m were recognised in the year.
Find out more in Notes 15, 17, 18 and 38 of the financial
statements on pages 149, 152-153 and 182-185
Held for sale property assets
The Committee also assessed whether properties classified as held
for sale at the balance sheet date continued to meet the International
Financial Reporting Standard (
IFRS
) 5 ‘Non-current Assets Held for
Sale and Discontinued Operations’ criteria. Although no properties
had been sold during the year, all held for sale properties remained
actively marketed, with a number being under offer. Although
completion of the planned sales within the next 12 months cannot be
assured, the Committee was satisfied that the classification of the
properties as held for sale remained appropriate. Third-party
valuations were conducted at 31 January 2026 and it was concluded
that no further impairments were required.
Find out more in Note 38 of the financial statements on page 185
Defined benefit pension scheme
The Group made contributions of £5.8m (2025: £5.8m) to the defined
benefit pension scheme, in line with the deficit recovery plan agreed
following the 31 January 2023 triennial valuation. Revised contribution
levels were confirmed as part of that valuation.
The Committee also reviewed the assumptions agreed between
management and the Group’s pension scheme advisers when
assessing the scheme’s valuation in accordance with IAS 19 ‘Employee
Benefits’ at both 31 July 2025 and 31 January 2026.
Find out more in Note 27 of the financial statements on
pages 167-170
Internal control observations of the external auditor
As part of the audit process, the Committee reviewed the internal
control observations identified by KPMG. Management attended
Committee meetings to provide further context and assurance
regarding the actions being taken in response.
Accounting policies
The Committee received reports from management in relation to
significant accounting policies and was satisfied that suitable key
accounting policies had been adopted, and judgements were
appropriate and provided a true and fair view of the Company’s
financial performance and position.
Fair, balanced and understandable
A key governance requirement is for the Board to ensure that the
Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable, and provides shareholders with the information
needed to assess the Group’s position, performance, business model
and strategy. The Committee advised the Board that it supported
the statement on page 59, following its review of whether:
•
the report was clear and presented a balanced view of the Group’s
successes, challenges, opportunities and risks;
•
key messages were appropriately highlighted and key performance
indicators (
KPIs
) disclosed at a suitable level;
•
the segmental information in Note 3 of the financial statements
was consistent with, and reconciled to, Alternative Performance
Measures (
APMs
) and other information included in the Strategic
Report; and
•
APMs were reconciled to the nearest IFRS measures, with
definitions clearly explained.
Going concern and viability
The going concern disclosure is on page 123, and the Viability
Statement and assessment methodology are on page 55. The
Committee reviewed the Group’s current position, key risks
(pages 51-54), and the five-year viability approach. It considered both
the base case and a severe but plausible scenario, including the key
assumptions underpinning each.
Audit and control
Internal controls
The Committee reviewed the outcome of the audits completed in
the year, including for data management and governance, and key
financial controls and partnerships (Insurance). The Group Financial
Controller provided updates on accounting issues and key aspects of
financial controls at every meeting. Regulatory development updates
were also received throughout the year and updates from the CGR
Steering Committee, to address the changes to the UK Corporate
Governance Code and supervise the Group’s preparatory work and
key project workstreams on material controls in anticipation of the
new CGR requirements.
Regular updates were received on the oversight and progress of the
phased implementation of the new general ledger system that went
live on 1 November 2025. The new cloud-based system enhances the
control environment and enables the standardisation of processes.
Financial crime and Speak Up reporting
Policies covering financial crime (including anti-bribery and corruption,
anti-fraud, anti-money laundering and terrorist financing; and
sanctions and asset freezing) were reviewed during the year and
approved by the Committee. The Speak Up Policy, annual report and
processes were reviewed against best practice to uphold integrity,
effectiveness and colleague engagement.
The Speak Up Policy was recommended for Board approval by the
Committee, which was granted in April 2025. It is my responsibility
to ensure the integrity, independence and effectiveness of the
Company’s Speak Up Policy and procedures. The Committee
reviewed all reported cases and concluded that they had been
handled in accordance with the policy or, where applicable,
exceptions noted accordingly.
Saga plc
Annual Report and Accounts 2026
77
Financial statements
Additional information
Governance
Strategic Report
Corporate Governance Statement
Audit and Risk Committee Report
continued
IAA
The Committee approved the IAA work plan and internal audits
conducted throughout the year were reviewed. The audit plan was
refreshed quarterly, maintaining agile alignment with strategic
objectives, and progress was reported by the IAA Director, with plan
adjustments being considered as necessary and approved by the
Committee. The Committee was satisfied that the IAA function was
appropriately resourced, when combined with the use of external
resource for specialised audits. The IAA Director attended all
Committee meetings and two private meetings with Committee
members during the year.
The Committee monitored whether the IAA function was able to
exercise independent judgement from management throughout
the year and was satisfied that this was the case. The Committee
also monitored the work of the risk, compliance and IAA functions
to ensure that their activities complemented each other. The KPIs
reviewed included the timeliness of issuing reports and completing
issues assurance. The Internal Audit Charter and mandate was also
approved by the Committee during the year, which had been updated to
align with current Global Internal Audit Standards and is available on our
corporate website (www.corporate.saga.co.uk/about-us/governance).
As Committee Chair, I carried out an assessment of the independence
of the IAA Director during the year which was considered by the
Committee. The Committee concluded that the IAA Director’s
independence, objectivity and integrity did not give rise for concern.
Work activity was focussed on readiness for the UK CGR, which included
enhancements to the documentation, mapping and assessment of
key processes and the design and operational effectiveness of
material controls across the internal risk and control environment.
A selection of risk-based work conducted over the year covering
financial and non-financial controls is shown below:
•
Key financial controls (plc)
•
Partnerships (Insurance)
•
Customer journey (Holidays)
•
Tax
•
Conduct risk (Insurance and Money)
•
Data management and governance
Action plans were agreed with management where improvements
were identified and appropriately tracked.
Risk management, compliance and internal controls
The effectiveness of the Group risk management framework and
internal control systems was discussed and all material, financial,
operational and compliance controls were considered. Substantial
progress had been made throughout the year to strengthen risk
management processes and risk maturity. Changes and additions
to the PRUs were reviewed and challenged throughout the year to
ensure they remained aligned to the agreed strategy and business
model. Further information can be found in the Strategic Report on
pages 51-54. This formed the basis of the scenario testing used
to produce the Viability Statement (see page 55).
An annual year-end review of the effectiveness of the risk management
and controls framework was presented by the IAA Director. The
Committee recognised the improvements made in year and
concluded that while there were areas where further improvements
are planned for 2026, the internal risk and control environment is
broadly effective.
We recommended to the Board that the appropriate statements
could be made, confirming that a robust assessment of emerging and
principal risks facing the Group, and a review of the effectiveness of
the risk management process, had been carried out (see pages 49-50).
Find out more in principal risks and uncertainties on
pages 51-54
Risk strategy, policy and appetites
PRUs were reviewed at each meeting and changes and adjustments
challenged to ensure alignment with strategy. The results of this
review are shown in the Strategic Report on pages 51-54 and form the
basis of the scenario testing used to produce the Viability Statement
(see page 55). Our risk management processes are set out on
pages 49-50 and are designed to manage, rather than eliminate, the
risk of failure to achieve business objectives and can only provide
reasonable assurance against any material misstatement or loss.
Find out more in risk management on pages 49-50
Cyber risk
The Chief Information Officer reported to the Committee on actions
taken to address the elevated cyber security risk environment.
The Company continued to strengthen its cyber resilience through
a vulnerability management programme, including independent
penetration testing. Enhanced detection and response capabilities
were deployed across the technology estate, supported by a strategic
initiative to reduce the Company’s overall attack surface and further
minimise potential exposure to cyber threats.
The Risk Policy was reviewed during the year, with updates made to the
risk management framework to reflect the strategic changes in the
business. The policy continued to facilitate clear direction to assist the
Company to address risk appetite. The Risk Policy was recommended
for Board approval by the Committee, which was granted in April 2025.
Subsidiary audit committees
The non-executive subsidiary chairs of the Saga Services Limited
audit, risk and compliance committee and the Saga Cruises Limited
risk and assurance committee, ensure that there is an adequate level
of oversight and that matters are escalated to the Committee as
appropriate. The AICL and Saga Personal Finance (
SPF
) audit, risk and
compliance committees were chaired by Non-Executive Directors until
the disposal of AICL in July 2025 and the transfer of the SPF audit, risk
and compliance responsibilities to the SPF board in November 2025.
External audit
In accordance with the FRC’s audit committees and external audit:
minimum standard, Article 7.1 of the Competition & Market Authority
Audit Order 2014 and the Company’s Independent Auditor Policy; the
Committee commenced a competitive re-tender process in the year
in respect of the 2027/28 audit. In December 2025, the Committee
welcomed audit partner, Natalia Bottomley, who replaced Timothy
Butchart as audit lead for KPMG on the Saga audit. Timothy had held
office as lead audit partner since the start of the 2022/23 audit.
Natalia brings a wealth of experience in the travel and retail sectors.
Audit planning
KPMG presented an audit plan for the financial year that included an
outline of its materiality thresholds, risk assessments and proposed
approach. Key aspects of the plan are detailed in the Independent
Auditor’s Report to the Members of Saga plc on pages 112-117.
The audit scope, materiality, coverage and areas of focus, together
with KPMG’s planned response to identified significant audit risks
were considered by the Committee, taking into account size,
complexity and susceptibility to fraud and error. KPMG’s engagement
terms and fee proposal for 2025/26 were also considered and
approved by the Committee.
Saga plc
Annual Report and Accounts 2026
78
Auditor independence and non-audit fees
The Committee members met with the external auditor three times
during the year without management being present. The objectivity
and independence of KPMG were continually challenged and
monitored by the Committee and auditor independence was
confirmed by KPMG throughout the year.
A robust Auditor Independence Policy on non-audit fees and
employment of the former employees of the external auditor is in place
and reviewed annually, in accordance with the Revised Ethical
Standard 2024 issued by the FRC. The policy lists non-audit services,
which the Committee is satisfied may be carried out by the external
auditor without affecting its independence. Clear approval levels are
detailed where the Committee Chair, or the whole Committee, is
required to authorise assignments. Audit fees payable to KPMG in
respect of the year ended 31 January 2026 were £1.8m (2025: £2.2m)
and non-audit service fees incurred were £0.2m (2025: £0.5m). This
equates to a non-audit fee ratio of 0.1 (2025: 0.2). A summary of fees
paid to the external auditor is set out in Note 5 to the consolidated
financial statements on page 143.
Audit quality and effectiveness of external auditor
The following were considered when assessing the effectiveness
of KPMG:
•
Our perception of KPMG’s understanding and insight into the
Group’s business model.
•
How key areas of judgement were approached by KPMG, the extent
of challenge and the quality of reporting.
•
The content of, and management’s responsiveness to, KPMG’s
management letter.
•
Feedback from management, following completion of an evaluation
survey on the audit process (including audit scope, audit
communication, independence and objectivity).
The Committee’s evaluation found that the auditor conducted the
audit process effectively, demonstrating strong independence,
together with appropriate focus and challenge on key accounting
judgements and estimates. The Committee was satisfied that the
audit remained robust and continued to provide objective scrutiny of
management. As a result, it recommended to the Board that KPMG
be reappointed as the Company’s auditor at the forthcoming Annual
General Meeting.
Gareth Hoskin
Chair, Audit and Risk Committee
Saga plc
Annual Report and Accounts 2026
79
Financial statements
Additional information
Governance
Strategic Report
Directors’ Remuneration Report
Annual Statement
“Following a year of significant strategic progress for Saga,
alongside substantially improved shareholder experience
and our re-admission to the FTSE 250 Index, the Committee
believes the remuneration outcomes for the year should be
well aligned with this performance, whilst supporting our
commitment to fair and responsible reward for colleagues
across the Group.”
Gemma Godfrey
Chair, Remuneration Committee
The Committee’s responsibilities
•
Set and monitor the Remuneration Policy (the
Policy
) for
senior executives, considering the relevant legal and regulatory
requirements and all relevant factors to ensure alignment with
delivery of value over the long term.
•
Determine and monitor remuneration packages for Executive
Directors, the Chairman and senior management.
•
Review workforce remuneration and related policies and
practices, setting principles for pay across the business and
ensuring alignment of incentives and rewards with culture.
•
Determine all aspects of share-based incentive arrangements.
•
Review and administer colleague share schemes.
•
Set key performance indicators (
KPIs
) for the Annual Bonus
Plan and long-term incentives.
•
Prepare a Directors’ Remuneration Report annually.
•
Engage with shareholders on significant remuneration
matters and consider their feedback when determining
policy and outcomes.
•
Appoint and oversee remuneration consultants and external
advisers, ensuring their independence.
The Remuneration Committee’s Terms of Reference were
reviewed during the year (approved by the Board on
27 January 2026) and are available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Committee evaluation
A review of the Committee’s performance took place during the
year, as part of the Board performance review (for details,
see page 71).
The review recognised that the Committee had operated
effectively in a demanding and complex space and there was
strong alignment on values and a focus on ensuring colleagues
were treated fairly.
What we did during the year
Time spent on matters
The Policy
Regulatory
developments
Senior management
remuneration
Share schemes
c.10%
c.10%
c.45%
c.20%
Colleague
compensation and
benefits structure
c.15%
Committee composition and attendance
Members
(all are independent
Non-Executive Directors)
Member
since
Max. possible
meetings
Attendance
Julie Hopes
1
(former Chair)
4 Apr 2019
4
Gareth Hoskin
2
9 Apr 2025
3
Gemma Godfrey
1
17 Nov 2022
4
Peter Bazalgette
2
17 Nov 2022
1
Key actions in 2025/26
•
Approved salary increases as part of the annual salary review,
and levels of bonus awards.
•
Approved targets for our Annual Bonus Plan.
•
Made grants under the Restricted Share Plan (
RSP
).
•
Consulted with shareholders on the Policy changes
implemented.
•
Conducted a review of our remuneration advisers.
Priorities for 2026/27
•
Continue to set and monitor remuneration, ensuring this
evolves and supports our strategy.
•
Continue to ensure that Executive Director and senior
management remuneration is aligned with the wider workforce.
1
Julie Hopes resigned from the Board with effect from 27 February 2026. With effect from 23 March 2026, Gemma Godfrey became Chair of the Committee
2
Peter Bazalgette resigned from the Board with effect from 9 April 2025. Gareth Hoskin became a member of the Committee with effect from the same date
Saga plc
Annual Report and Accounts 2026
80
Dear shareholder,
I am pleased to present to you the Directors’ Remuneration Report for
the year ended 31 January 2026, which has been approved by both the
Remuneration Committee (the
Committee
) and the Board.
Following Julie Hopes’ resignation on 27 February 2026, I assumed
position of the Chair of the Committee. I would like to thank Julie for
her contribution to Saga and the Committee.
Business context
The year under review has been one of significant strategic execution
for Saga, moving to a lower risk, simpler and less volatile business
model, while seeing strong trading performance in both the Travel and
Insurance businesses.
Both our Cruise and Holidays operations maintained their strong
momentum, showing the positive impact of our decision earlier in the
year to consolidate our Travel businesses under one management
team. Ocean Cruise achieved load factors of 93% for the full year with
per diems increasing by 10%, reflecting the continued appeal of our
boutique, all-inclusive offering to the over-50s market. In July 2025,
we welcomed the Spirit of the Moselle to our River Cruise fleet, which
has traded well since the launch and supports our ambition to expand
this profitable segment further. River Cruise also delivered another
year of strong performance, achieving an 89% load factor and a 7%
increase in per diem.
Holidays continued its turnaround, delivering significant growth
year-on-year with Underlying Profit Before Tax
3
increasing 31%,
supported by passenger growth of 11%.
We made significant progress with our partnership and simplification
strategy, successfully completing the sale of our Insurance
Underwriting business, beginning our 20-year Ageas
4
insurance
partnership and launching our new NatWest Boxed savings
partnership. Insurance Broking outperformed expectations,
delivering growth across three of our four insurance products and
reporting Underlying Profit Before Tax
3
ahead of the prior year.
The corporate refinancing, which completed in February 2025,
materially strengthened our balance sheet, extending debt maturities
to 2031 and fully repaying the corporate bond and loan facility
provided by Roger De Haan.
Shareholders have experienced a strong recovery in value over the
year, with the share price significantly outperforming the broader
market and supporting Saga’s re-admission to the FTSE 250 Index
after several years. The Committee believes this reflects the market’s
recognition of the strategic progress made by management in
repositioning the business.
These achievements were delivered against a backdrop of gradually
improving consumer confidence, though cost-of-living pressures
persisted for many households. The over-50s demographic we serve
has shown resilience, with continued appetite for travel experiences.
Following a year of significant strategic progress for Saga, alongside
substantially improved shareholder experience and our re-admission
to the FTSE 250 Index, the Committee believes the remuneration
outcomes for the year should be well aligned with this performance,
whilst supporting our commitment to fair and responsible reward for
colleagues across the Group.
Company performance for the 2025/26 financial year
The implementation of our strategy (as outlined on pages 12-17) was
measured against the KPIs set out below:
•
Underlying Profit Before Tax
3
from continuing operations increased
£7.0m to £44.2m.
•
Net Debt
3
, at 31 January 2026, was £499.5m, £93.3m lower than
31 January 2025.
•
Customer consent capture of 35% across the Group.
•
Customer transactional net promoter score of 67, an eight-point
increase when compared with the prior year.
•
Colleague engagement increased across Saga, with our most
recent survey scoring 8.1 out of 10, an improvement of 0.2 from
December 2024.
Changes to the Board
As disclosed in last year’s report, both Peter Bazalgette, Senior
Independent Director, and Steve Kingshott, Executive Director,
resigned from the Board with effect from 9 April 2025. These
changes to the Board followed the successful agreement of the
Insurance Underwriting sale and Affinity Partnership with Ageas
4
and reflect the Group’s new simplified business model. The treatment
of the remuneration arrangements for Steve are set out in the
Section 430 (2B) announcement available on our corporate website
(www.corporate.saga.co.uk/about-us/governance) and repeated
on page 92.
On 27 February 2026, Julie Hopes resigned from the Board. Julie
served as a Non-Executive Director since October 2018 and was my
predecessor as Committee Chair.
2025 Policy review
Under the three-year Policy cycle, the Committee consulted with
shareholders in the early part of 2025 and presented a new Policy at
the Annual General Meeting (
AGM
) held on 24 June 2025. Full details
of this Policy were set out in the Notice of AGM. In summary, we
simplified the Policy, reverting to the Policy which was introduced in
2020 by removing the Saga Transformation Plan (
STP
). At the same
time, the Restricted Share Plan (
RSP
) was reinstated back to its
original levels (these were reduced by 20% per annum when the STP
was introduced). Awards under the STP made to the new Group
Chief Executive Officer (
CEO
) and Group Chief Financial Officer (
CFO
)
and the former CEO of Insurance will lapse without value. No further
changes were made to the Policy. The Committee was pleased to
receive a 99.63% shareholder vote in favour of the new Policy at the
2025 AGM.
Remuneration outcomes in 2025/26
Salary increases for 2025/26
During 2025/26, the Group CEO and Executive Director
5
(previously
CEO of Insurance) received a salary increase of 2.5%, in line with the
wider workforce rate. As disclosed last year, the Group CFO received
a 10% salary increase following a review of his salary with reference to
market benchmarks.
2025/26 bonus
The assessment of annual performance for the Executive Directors is
70% based on business performance against a scorecard of financial
targets, with the remaining 30% based on their achievement of
personal objectives, which are central to delivery of the strategy and
operating model. The specific targets set are shown on pages 88-90,
together with the degree of achievement of each.
The Committee’s assessment of performance against the financial
targets resulted in a final outcome of 70% out of the maximum 70%
for the Group CEO and Group CFO, and the Executive Director
5
(previously CEO of Insurance).
The Committee reviewed each Executive Director’s performance
against a number of bespoke objectives. The formulaic outcome for
the universal scorecard was 19.5% out of a maximum 20.0% reflecting
that the customer consent measure was not fully achieved on a
formulaic basis. Having considered the quality of delivery against this
metric, and the strength of overall performance during the year, the
Committee’s view was that the formulaic outcome did not fully reflect
the quality of execution against the objective and exercised limited
upward discretion to apply the full weighting under the universal
scorecard. This resulted in a modest adjustment of 0.5% of maximum
bonus for all senior leaders. The Committee was satisfied that this
adjustment provided a fair and balanced reflection of performance
in 2025, taking into account the Company’s strong share price
performance, the significant strategic progress delivered during the
year and the overall experience of shareholders. Following this
adjustment, the personal objective outcomes for Mike Hazell, Mark
Watkins and Steve Kingshott would be 30% out of the maximum
30.0%. Further details of each Executive Director’s individual
contribution to the business can be found on pages 89-90.
Page 88 sets out the calculation for the 2025/26 bonus, which paid out
at 100% of maximum for the Group CEO, Group CFO and Executive
Director (previously CEO of Insurance).
3
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
4
Wholly owned UK subsidiaries of Ageas SA/NV
5
Steve Kingshott resigned from the Board with effect from 9 April 2025
Saga plc
Annual Report and Accounts 2026
81
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Remuneration Report
Annual Statement
continued
Mike Hazell will receive a bonus of £922,500, Mark Watkins will receive a
bonus of £515,625 and Steve Kingshott will receive a bonus of £102,191
6
.
In line with our approved Policy, all bonus awards are paid one-third in
deferred shares and two-thirds in cash.
2022 RSP vesting
RSP awards were made in 2022 to the former Group CEO and CFO
at 100% of salary and 85% of salary respectively.
On vesting, the Committee carried out an assessment of the RSP
to determine whether the underpin test had been met and whether
the awards would result in a windfall gain on vesting. The Committee
concluded that the terms of the underpin had been met and that
there were no windfall gains over the vesting period. However, when
considering overall business performance over the three-year vesting
period, the Committee deemed it appropriate to exercise its discretion
to apply a 10% reduction to the award at the point of vesting.
The 2022 RSP, therefore, vested at 90% of the maximum.
Salary increases for 2026/27
The average wider workforce salary increase in 2026/27 was 3.0%
with higher increases awarded to high performers or to address
specific talent needs. Saga also remains committed to being a Real
Living Wage employer, ensuring all colleagues are fairly rewarded for
the work they do.
After careful consideration, the Committee approved a salary
increase of 13.8% for the Group CEO, taking his salary to £700,000.
This adjustment recognises his outstanding performance in role since
appointment as Group CEO and the pivotal role he has played in
leading the Group’s turnaround. This is evidenced by the significant
increase in the Company’s share price over the year and Saga’s return
to the FTSE 250, reflecting shareholder confidence in leadership, our
strategy and Saga’s prospects. The Committee also approved a salary
increase of 6.7% for the Group CFO, taking his salary to £440,000,
again considering his performance in role since appointment and the
shareholder experience.
Although the Committee was mindful of the internal and external
sensitivity associated with awarding salary increases higher than the
wider workforce, the Committee felt strongly that the performance
of the Group CEO and Group CFO merited the increase and it was
in the best interests of shareholders. Independent market
benchmarking against FTSE 250 companies also demonstrated
that the higher level of salary and overall positioning of Group CEO
and Group CFO compensation was appropriate, relative to
companies of similar size and complexity to Saga and in the context
of a turnaround strategy. The Committee also noted when approving
the increase that the Group CEO’s salary remains significantly below
that of his predecessor £750,110 at the time of his departure in
2023. In conclusion, the Committee is satisfied that this increase
appropriately reflects his contribution and ensures remuneration of
the Group CEO and Group CFO remains competitive and retentive
as the business enters its next phase of growth.
Where time was allocated during the year – matters
discussed, decisions made and actions taken
•
Approved Executive Director and Operating Board salary increases
as part of the annual salary review for 2026/27.
•
Approved the business and personal metrics for the 2025/26
annual bonus. Details of the personal objectives for the Executive
Directors can be found on pages 89-90.
•
Determined the level of bonus awards for 2025/26.
•
Made grants under the RSP for the Operating Board and Senior
Leadership Team.
•
Agreed remuneration for the outgoing Executive Director,
Steve Kingshott.
•
Reviewed progress against the actions to reduce our gender pay
gap and discussed the Company’s wider diversity, equity, inclusion
and belonging strategy.
•
Consulted with shareholders on the Policy changes implemented.
•
Noted the voting results on our Directors’ Remuneration Report
and Policy at the 2025 AGM and continued our constructive
dialogue with shareholders.
•
Discussed how the Committee would review wider workforce pay
and ensure alignment of incentives throughout the Company with
its culture and strategy.
•
Carried out a review of our remuneration advisers, resulting in the
appointment of Willis Towers Watson.
Wider workforce considerations
In making decisions on executive pay, the Committee considers wider
workforce remuneration and conditions, as outlined on page 93.
We continue to be as focussed on our colleagues as we are on our
customers. The Committee’s aim is to ensure that our approach to
rewarding colleagues at all levels is aligned to our business strategy,
which places customer service and colleague engagement at its core.
As a Real Living Wage employer, Saga is committed to ensuring that
colleagues are fairly rewarded for the work they do. This commitment
underpins our broader approach to responsible employment and
reinforces the alignment between our executive remuneration
framework and the experiences of our wider workforce.
We continue to engage with colleagues on executive reward matters
through our People Committee. Further details of our People
Committee can be found in our 2026 Environmental, Social and
Governance Report.
As part of our commitment to fairness, this report contains details
of the pay and conditions of our wider workforce, the cascade of
incentives throughout our business, and our Group CEO to colleague
pay ratio. Details of Saga’s gender pay report can be found on our
website (www.saga.co.uk/gender-pay-review).
Shareholder consultation and looking ahead
The Committee continues to uphold an open and constructive
dialogue with shareholders. We consulted with major shareholders
in the lead up to the 2025 AGM and ahead of the adoption of the new
Policy. As a result, we received a voting outcome of 99.56% in support
of the 2025 Directors’ Remuneration Report, and 99.63% in support
of the Directors’ Remuneration Policy. We will continue to engage with
shareholders and seek to incorporate feedback within our future
remuneration decisions.
Conclusion
I hope you find the information contained in this report helpful,
thoughtful and clear.
I am always happy to hear from our shareholders, and you can contact
me at any time at remco.chair@saga.co.uk if you have any questions or
comments on this report.
Gemma Godfrey
Chair, Remuneration Committee
6
Following Steve Kingshott’s resignation from the Board with effect from 9 April 2025, the bonus shown is pro-rated for two months and seven days
Saga plc
Annual Report and Accounts 2026
82
Remuneration at a glance
Remuneration in the Group
Total spend
on pay
1
£129.9m
2024/25 – £119.4m
2023/24 – £161.6m
2022/23 – £132.0m
Group CEO pay ratio
to the median colleague
62:1
2024/25 – 50:1
2023/24 – 63:1
2022/23 – 56:1
General increase
for all colleagues
2.5%
2024/25 – 4.0%
2
2023/24 – Nil
3
2022/23 – 7.5%
3
2025/26 total single figure remuneration (£)
Mike Hazell
Group Chief Executive Officer (
CEO
)
2
025/26
2
024/25
2,203,240
1,894,030
50,740
615,000
922,500
615,000
49,735
600,000
764,295
480,000
Mark Watkins
Group Chief Financial Officer (
CFO
)
2
025/26
2
024/25
1,317,340
1,064,305
38,590
412,500
515,625
350,625
36,235
375,000
398,070
255,000
Steve Kingshott
4
Executive Director (previously CEO of Insurance)
2
025/26
2
024/25
191,655
1,076,439
7,711
81,753
102,191
38,096
412,000
379,143
247,200
Key
Salary
Benefits and pension
Bonus
5
Restricted Share Plan (
RSP
)
6
RSP awards vesting in 2025
No awards vested during the year for any current Executive Directors, however, the 2022 RSP vested on 13 July 2025 at 90% of maximum
for the former Group CEO and CFO. Full details are set out on page 92 under payments to past directors.
1
Total spend on pay, including Executive Directors
2
Executive Directors did not receive any increase in salary in February 2024. The average increase awarded to the broader colleague group was 4.0%
3
All colleagues received a 2.5% increase in base pay in February 2022, with colleagues below senior leadership receiving a further increase of 5.0% in December 2022, which was
brought forward from February 2023, to support colleagues with the rising cost of living
4
Steve Kingshott’s salary and remuneration for 2025/26 is prorated to the 9 April 2025 when he resigned from the Board
5
As per the Remuneration Policy (the
Policy
), a third of Executive Directors’ bonus is deferred in shares, which vest after three years
6
RSP awards vest after three years
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Annual Report and Accounts 2026
83
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Remuneration Report
Remuneration at a glance
continued
Shareholdings of the Executive Directors
The table sets out the shareholdings of the Executive Directors at 31 January 2026. Further detail is set out on page 91.
Director
Shareholding
requirement
(% of salary)
Shares owned
outright
(% of salary)
7,8
Shares subject to continued
employment holding periods
(% of salary)
8,9
Mike Hazell
Group CEO
250%
66%
613%
Mark Watkins
Group CFO
200%
1%
359%
2025/26 annual bonus outcome for the Group CEO and Group CFO
For 2025/26, the Group CEO and Group CFO had a maximum bonus opportunity of 150% of salary and 125% of salary respectively.
The overall bonus outcome is set out in the table below. No discretion was applied to the formulaic outcome. Further details are set out
on pages 88-90.
Performance condition
Weighting
Threshold
(20% payout)
Target
(50% payout)
Maximum
(100% payout)
Outcome achieved
(% of maximum bonus)
Underlying Profit Before Tax
10
from
continuing operations
55.0%
55.0%
Net Debt
10
15.0%
15.0%
Personal objectives
30.0%
Group CEO: 30.0%
Group CFO: 30.0%
Total
100.0%
Group CEO: 100.0%
Group CFO: 100.0%
2025/26 annual bonus outcome for the Executive Director (previously CEO of Insurance)
For 2025/26, the Executive Director (previously CEO of Insurance) had a maximum bonus opportunity of 125% of salary. The overall bonus
outcome is set out in the table below. Further details are set out on pages 88-90 in the Annual Report on Remuneration.
Performance condition
Weighting
Threshold
(20% payout)
Target
(50% payout)
Maximum
(100% payout)
Outcome achieved
(% of maximum bonus)
Underlying Profit Before Tax
10
from
continuing operations
27.5%
27.5%
Insurance Underlying Profit Before Tax
10
from continuing operations
27.5%
27.5%
Net Debt
10
15.0%
15.0%
Personal objectives
30.0%
30.0%
Total
100.0%
100.0%
7
Represents actual shares owned at 31 January 2026
8
Based on mid-market quotation share price of 520p at 31 January 2026 and the year-end salaries of the Executive Directors
9
Represents unvested RSP awards and annual bonus deferred share awards
10
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
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Annual Report and Accounts 2026
84
Strategic Report
Strategic Report
Governance
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Financial statements
Additional information
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Annual Report and Accounts 2026
85
The Policy and its implementation in 2025/26
The table below sets out a summary of the key elements of the Remuneration Policy (the
Policy
) along with their operation in 2025/26 and
proposed operation in 2026/27.
Policy element |
Summary of the Policy |
Operation in 2025/26 |
Proposed operation in 2026/27 |
Base salary |
Salaries are set on appointment |
The Group CEO and Executive |
As outlined in the Annual |
Provides a base level of |
and reviewed annually. When |
Director (previously CEO of |
Statement, the Group CEO |
remuneration to support |
determining an appropriate level |
Insurance) received a 2.5% |
received a 13.8% increase in |
recruitment and retention of |
of salary, the Remuneration |
increase in salary in February |
salary and the Group CFO a 6.7% |
Executive Directors with the |
Committee (the Committee ) |
2025, aligned to the wider |
increase in salary. The wider |
necessary experience and |
considers: |
workforce. The Group CFO |
workforce received an average |
expertise to deliver the |
• pay increases to other |
received a 10% increase in salary. |
of 3.0% increase in salary. |
Group’s strategy. |
colleagues; |
As a result, the salaries for the |
As a result, the salaries for the |
• remuneration practices within |
Executive Directors were: |
Executive Directors are: |
|
the Group; |
• Mike Hazell: £615,000 |
• Mike Hazell: £700,000 |
|
• any change in scope, role or |
• Mark Watkins: £412,500 |
• Mark Watkins: £440,000 |
|
responsibilities; |
• Steve Kingshott: £422,300 |
||
• the general performance of the |
|||
Group and each individual; |
|||
• the experience of the relevant |
|||
Director; and |
|||
• the economic environment. |
|||
Benefits |
Benefits may include family |
Standard benefits provided. |
No change. |
Provides a market-standard level |
private health cover, death in |
||
of benefits. |
service life assurance, a car |
||
allowance, subsistence expenses |
|||
and discounts in line with other |
|||
colleagues. |
|||
Pension |
Directors may participate in a |
Executive Directors received the |
No change. |
Provides a fair level of pension |
defined contribution scheme. |
following: |
|
provision for all colleagues. |
Maximum pension contributions |
• Mike Hazell: 6% of salary |
|
for Executive Directors are |
• Mark Watkins: 6% of salary |
||
aligned with those of the wider |
• Steve Kingshott: 6% of salary |
||
workforce (6% of salary). |
|||
Bonus |
Awards are granted annually, |
Maximum bonus opportunities |
The maximum opportunities |
The Annual Bonus Plan provides a |
with performance measured |
were: |
for Executive Directors are |
significant incentive to the |
over one financial year. |
• Mike Hazell: 150% of salary |
unchanged and are as follows: |
Executive Directors, linked to |
The Committee will determine |
• Mark Watkins: 125% of salary |
• Mike Hazell: 150% of salary |
achievement in delivering goals |
the maximum participation in the |
• Steve Kingshott: 125% of salary |
• Mark Watkins: 125% of salary |
that are closely aligned with the |
Annual Bonus Plan for each year, |
Performance measures and |
The current intention is to set |
Company’s strategy and the |
which will not exceed 150% |
weightings for the bonus for |
performance measures and |
creation of value for shareholders. |
of salary. |
Mike and Mark were as follows: |
weightings for the 2026/27 |
In particular, the Annual Bonus |
70% of awards will be linked |
• Underlying Profit Before Tax 1 |
bonus as follows: |
Plan supports the Company’s |
to financial measures. Specific |
from continuing |
• Underlying Profit Before |
objectives, allowing the setting of |
measures, targets and |
operations: 55% |
Tax 1 : 55% |
annual targets based on the |
weightings may vary from year |
• Net Debt 1 : 15% |
• Net Debt 1 : 15% |
business’ strategic objectives at |
to year. |
• Personal objectives: 30% |
• Personal objectives: 30% |
that time, meaning that a wider |
At least one-third of the bonus |
Performance measures and |
|
range of performance metrics can |
will be deferred into shares |
weightings for the bonus for |
|
be used that are relevant. |
vesting after three years. |
Steve were as follows: |
|
Payout range is as follows |
• Underlying Profit Before Tax 1 |
||
(% of maximum payout): |
from continuing |
||
• Threshold: up to 20% |
operations: 27.5% |
||
• Target: 50% |
• Insurance Underlying Profit |
||
• Maximum: 100% |
Before Tax 1 from continuing |
||
Malus and clawback |
operations: 27.5% |
||
arrangements apply. |
• Net Debt 1 : 15% |
||
Good/bad leaver |
• Personal objectives: 30% |
||
provisions apply. |
1
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Directors’ Remuneration Report
Annual Report on Remuneration
continued
Saga plc
Annual Report and Accounts 2026
86
Policy element | Summary of the Policy | Operation in 2025/26 | Proposed operation in 2026/27 |
Restricted Share Plan ( RSP ) | Awards of nil-cost options are | RSP awards were made at the | No change. |
Awards are designed to | granted annually up to a | original levels following removal | |
incentivise the Executive | maximum of 100% of salary. | of the Saga Transformation Plan | |
Directors over the longer term | RSP awards do not have any | ( STP ) in the new Policy: | |
to successfully implement the | performance conditions but are | • Mike Hazell: 100% of salary | |
Company’s strategy. | subject to an underpin on vesting. | • Mark Watkins: 85% of salary | |
Awards vest after three years | The Committee will review share | ||
and are subject to a further | price performance on vesting to | ||
two-year holding period, during | determine whether any windfall | ||
which time shares may not be | gains were made. | ||
sold other than for tax. | |||
Shareholding requirement | The Committee sets formal | • Mike Hazell: 250% of salary | No change. |
To ensure Executive Directors’ | shareholding guidelines that | • Mark Watkins: 200% of salary | |
interests are aligned with | will encourage the Executive | • Steve Kingshott: 200% | |
shareholders over the long term. | Directors to build up over | of salary | |
a five-year period, and | |||
then subsequently hold, | |||
a shareholding equivalent | |||
to a percentage of salary. | |||
All-colleague share plan | Shares that are kept in the plan | Saga continued to operate the | No change. |
The Company operates a | for five years will be exempt from | SIP for all colleagues in 2025/26. | |
HM Revenue and Customs | income tax and national | ||
Share Incentive Plan ( SIP ). | insurance on their value. | ||
Chairman and Non-Executive | The fees for Non-Executive | Fees for 2025/26 were as | Fees for 2026/27 are as follows: |
Director fees | Directors are set at broadly | follows (Roger De Haan waived | • Roger De Haan: £150,000 2 |
Monetary incentives for the | the median of the comparator | his fee since becoming Chairman | • Board member fee: £69,152 |
Chairman and Non-Executive | group. In general, the level of fee | in 2020): | • Risk and Audit Committee |
Directors | increase for the Non-Executive | • Roger De Haan: Nil | Chair fee: £12,500 |
Directors will be set, taking | • Board member fee: £67,137 | • Remuneration Committee | |
account of any change in | • Committee Chair fee: £10,000 | Chair fee: £10,000 | |
responsibility and considering | • Senior Independent Director | • Senior Independent Director | |
the general rise in salaries | and Nomination Committee | and Nomination Committee | |
across the UK workforce. | Chair fee: £22,000 | Chair fee: £22,000 |
2
Given the strong performance of the business, it is now the appropriate time to reinstate a Chair fee. This follows Roger De Haan waiving his fee since 2020 when he became
Non-Executive Chairman, which was one of the many ways he actively supported the business. The £150,000 fee for 2026/27 is below the £200,000 originally set for the role
Strategic Report
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Governance
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Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
87
2025/26 actual performance and remuneration outcomes
Single total figure of remuneration for Executive Directors for the 2025/26 financial year (audited)
The table below sets out the single total figure of remuneration and breakdown for each Director in respect of the 2025/26 financial year.
Comparative figures for the 2024/25 financial year are also provided. Figures provided have been calculated in accordance with Schedule 8
of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended in 2013.
Taxable | Total | Total | Single | |||||||
Salary | benefits | Pension | Other | fixed | Bonus 3 | RSP 4 | variable | figure | ||
Period | £ | £ | £ | £ | £ | £ | £ | £ | £ | |
Mike Hazell | 2025/26 | 615,000 | 13,840 36,900 | – | 665,740 | 922,500 | 615,000 | 1,537,500 | 2,203,240 | |
| (Group CEO) | 2024/25 600,000 | 13,735 36,000 | – | 649,735 | 764,295 | 480,000 | 1,244,295 | 1,894,030 | ||
Mark Watkins | 2025/26 | 412,500 | 13,840 | 24,750 | – | 451,090 | 515,625 | 350,625 | 866,250 | 1,317,340 |
| (Group CFO) | 2024/25 | 375,000 | 13,735 | 22,500 | – | 411,235 | 398,070 | 255,000 | 653,070 | 1,064,305 |
Steve Kingshott 5 | 2025/26 | 81,753 | 2,806 | 4,905 | – | 89,464 | 102,191 | – | 102,191 | 191,655 |
| (Executive Director | 2024/25 | 412,000 | 13,376 | 24,720 | – | 450,096 | 379,143 | 247,200 | 626,343 | 1,076,439 |
(previously CEO of Insurance)) | ||||||||||
Roger De Haan | 2025/26 | Nil | – | – | – | Nil | – | – | Nil | Nil |
| (Non-Executive Chairman) | 2024/25 | Nil | – | – | – | Nil | – | – | Nil | Nil |
Julie Hopes 6 | 2025/26 | 148,660 | – | – | – | 148,660 | – | – | – | 148,660 |
| (Non-Executive Director, | 2024/25 | 151,000 | – | – | – | 151,000 | – | – | – | 151,000 |
Remuneration Committee Chair, | ||||||||||
Risk Committee Chair, | ||||||||||
Chair of Saga Services Limited) | ||||||||||
Gareth Hoskin 7 | 2025/26 | 122,965 | – | – | – | 122,965 | – | – | – | 122,965 |
| (Senior Independent | 2024/25 | 141,000 | – | – | – | 141,000 | – | – | – | 141,000 |
Non-Executive Director, | ||||||||||
Audit Committee Chair, | ||||||||||
Nomination Committee Chair) | ||||||||||
Gemma Godfrey | 2025/26 | 134,275 | – | – | – | 134,275 | – | – | – | 134,275 |
| (Non-Executive Director, | 2024/25 | 131,000 | – | – | – | 131,000 | – | – | – | 131,000 |
Chair of Saga Personal Finance | ||||||||||
( SPF ) Limited) | ||||||||||
Peter Bazalgette 8 | 2025/26 | 22,360 | – | – | – | 22,360 | – | – | – | 22,360 |
| (Senior Independent | 2024/25 | 115,500 | – | – | – | 115,500 | – | – | – | 115,500 |
Non-Executive Director, | ||||||||||
Nomination Committee Chair) | ||||||||||
Anand Aithal | 2025/26 | 77,137 | – | – | – | 77,137 | – | – | – | 77,137 |
| (Non-Executive Director, | 2024/25 | 75,500 | – | – | – | 75,500 | – | – | – | 75,500 |
Innovation and Enterprise | ||||||||||
Committee Chair) | ||||||||||
3
One third of the bonus award is deferred into shares vesting after three years
4
The face value on grant of the RSP awards is shown in the table above as there are no performance conditions other than underpins tested on vesting. The RSP award vests after
three years
5
Steve Kingshott resigned from the Board with effect from 9 April 2025
6
With effect from 9 July 2025, the Audit and Risk Committees merged and, as a result, Julie Hopes’ role as Chair of the Risk Committee ceased. Julie Hopes resigned from the
Board with effect from 27 February 2026
7
Gareth Hoskin became a Senior Independent Non-Executive Director and Nomination Committee Chair on 9 April 2025 and, up until 30 June 2025, Gareth chaired Acromas
Insurance Company Limited, which ceased following its sale to wholly owned UK subsidiaries of Ageas SA/NV
8
Peter Bazalgette resigned from the Board with effect from 9 April 2025
Directors’ Remuneration Report
Annual Report on Remuneration
continued
Saga plc
Annual Report and Accounts 2026
88
How we performed in 2025/26
Bonus (audited in conjunction with details on pages 144-145)
The details of the performance conditions and outcomes against the targets for the annual bonus in respect of the 2025/26 financial year are
shown in the table below. No discretion was applied to the formulaic outcome. For 2025/26, the Group CEO had a maximum bonus opportunity
of 150% of salary and the Group CFO and Executive Director (previously CEO of Insurance) had a maximum bonus opportunity of 125% of salary.
Saga plc bonus scorecard
Annual bonus | ||||||||
Threshold | 50% target | Maximum | for threshold | Actual annual bonus achieved | ||||
Weighting | performance | performance | performance | Actual | and maximum | (% of maximum bonus) | ||
(based on | required | required | required | performance | performance | |||
Performance condition | 100% max) | (£m) | (£m) | (£m) | (£m) | (% of max) | Mike Hazell | Mark Watkins |
Underlying Profit Before | 55.0% | 13.5 | 21.0 | 33.5 | 44.2 | 20% | 55.0% | 55.0% |
Tax 9 from continuing | 100% | |||||||
operations | ||||||||
Net Debt 9 | 15.0% | 604.6 | 585.9 | 554.6 | 499.5 | 20% | 15.0% | 15.0% |
100% | ||||||||
Personal objectives | 30.0% | 0% | 30.0% | 30.0% | ||||
100% | ||||||||
Total | 100.0% | 100.0% | 100.0% | |||||
Total calculated (£) | £922,500 | £515,625 | ||||||
Total payable (£) | £922,500 | £515,625 | ||||||
Insurance bonus scorecard
Annual bonus | |||||||
value for | |||||||
Threshold | 50% target | Maximum | threshold and | Actual annual bonus achieved | |||
Weighting | performance | performance | performance | Actual | maximum | (% of maximum bonus) | |
(based on | required | required | required | performance | performance | ||
Performance condition | 100% max) | (£m) | (£m) | (£m) | (£m) | (% of max) | Steve Kingshott 10 |
Underlying Profit Before | 27.5% | 13.5 | 21.0 | 33.5 | 44.2 | 20% | 5.3% |
Tax 9 from continuing | 100% | ||||||
operations | |||||||
Insurance Underlying | 27.5% | 4.6 | 8.4 | 14.6 | 16.9 | 20% | 5.3% |
Profit Before Tax 9 from | 100% | ||||||
continuing operations | |||||||
Net Debt 9 | 15.0% | 604.6 | 585.9 | 554.6 | 499.5 | 20% | 2.9% |
100% | |||||||
Personal objectives | 30.0% | 0% | 5.8% | ||||
100% | |||||||
Total | 100.0% | 19.3% | |||||
Total calculated (£) | £102,191 | ||||||
Total payable (£) | £102,191 |
9
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
10
Steve Kingshott resigned from the Board with effect from 9 April 2025 and, therefore, the bonus shown is pro-rated for two months and seven days
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Additional information
Saga plc
Annual Report and Accounts 2026
89
Individual performance assessment
The Committee assessed Executive Directors on their individual performance in the year, against a set of universal strategic objectives, which
account for 30% of their maximum bonus. Details of these universal strategic objectives for each of the individuals are noted below:
Actual annual bonus achieved | |||||||||
| 20% | 50% | (% of maximum bonus) | |||||||
Weighting | threshold | target | Maximum | ||||||
(based on | performance | performance | performance | Actual | Mike | Mark | Steve | ||
Objective | 100% max) | required | required | required | performance | Hazell | Watkins | Kingshott | |
Culture and colleagues | |||||||||
Objective | |||||||||
Maintain high levels of colleague engagement, measured | |||||||||
by the engagement score from the colleague survey. | |||||||||
Outcome | 5.0% | Saga plc | 7.5 | 7.6 | 7.7 | 8.1 | 5.0% | 5.0% | – |
| Increased colleague engagement across Saga, 86% | Insurance | 7.3 | 7.4 | 7.5 | 8.0 | – | – | 5.0% | |
participation in our most recent survey, scoring 8.1 out | |||||||||
of 10, an improvement of 0.2 from the previous year. | |||||||||
Customer engagement | |||||||||
Objective | |||||||||
Grow our customer base and deepen customer | |||||||||
relationships, measured by customer consent capture | |||||||||
and website visits. | |||||||||
Outcome – customer consent 11 | 2.5% | Saga plc | 32% | 34% | 36% | 35% | 2.0% | 2.0% | – |
Early in the year, management made the decision to | Insurance | 32% | 34% | 36% | 35% | – | – | 2.0% | |
cease requesting Group-wide consent from customers | |||||||||
who already provided the relevant business unit level | |||||||||
consents. By reducing unnecessary customer contact, | |||||||||
it improved their overall experience. Because this change | |||||||||
altered the number of customer eligible to provide | |||||||||
additional consents, the Committee recalibrated the | |||||||||
consent targets to ensure they remained both realistic | |||||||||
and stretching. | |||||||||
Outcome – website visits | 2.5% | Saga plc | 3.4m | 3.6m | 3.8m | 3.9m | 2.5% | 2.5% | 2.5% |
Average monthly website visits across all Saga sites. | |||||||||
Customer satisfaction | |||||||||
Objective | |||||||||
Increase the strength of the Saga brand, using it to | |||||||||
improve customer experience, measured by customer | |||||||||
transactional net promoter score ( tNPS ) and retention. | |||||||||
Outcome – tNPS 12 | 2.5% | Saga plc | 61 | 62 | 63 | 67 | 2.5% | 2.5% | – |
Customer tNPS was 67, an eight-point increase when | Insurance | 61 | 62 | 63 | 64 | – | – | 2.5% | |
compared with the prior year. | 2.5% | Saga plc | Average of outcomes from all business units | 2.5% | 2.5% | – | |||
Outcome – retention rates | Insurance | 80% | 81% | 82% | 84% | – | – | 2.5% | |
Retention rates exceeded target thresholds across all | |||||||||
| areas of the Group. | |||||||||
Environmental, Social and Governance ( ESG ) | |||||||||
Objective | |||||||||
Achieve the ESG targets set in the 2025 ESG Report. | |||||||||
Outcome | 5.0% | Saga plc | 5.0% | 5.0% | – | ||||
| 1. Continued to report complete carbon footprint | Insurance | – | – | 5.0% | |||||
against baseline carbon footprint by December 2025 | |||||||||
and launched net zero roadmap, including internal | |||||||||
KPIs and targets, by December 2025. | |||||||||
2. Continued to support our charity partnerships with | |||||||||
fundraising and volunteering opportunities. | |||||||||
3. Reviewed and set targets on colleague diversity | |||||||||
representation (following the Ageas 13 partnership). | |||||||||
Personal growth objective | 10.0% | 10.0% | 10.0% | 10.0% | |||||
Outcome | |||||||||
Details of the individual objectives under personal growth | |||||||||
projects, and their assessment, are noted overleaf. | |||||||||
Discretionary adjustment 14 | +0.5% | +0.5% | +0.5% | ||||||
Overall | 30.0% | 30.0% | 30.0% | 30.0% | |||||
11
The consent outcome disclosed in the 2025 Annual Report and Accounts was incorrectly stated as 37%, the actual outcome was 42%. There is no financial impact as the
incorrectly stated 37% was already above bonus targets
12
The method of calculation for tNPS has been updated in 2025/26 applying equal weighting across all business units, removing volatility caused by changes in survey volumes and
providing a more consistent and representative measure of performance
13
Wholly owned UK subsidiaries of Ageas SA/NV
14
The Committee exercised discretion on the customer consent element, increasing the formulaic outcome from 2.0% to the maximum 2.5% of overall bonus. The basis for this
adjustment is set out in the Committee Chair’s statement
Directors’ Remuneration Report
Annual Report on Remuneration
continued
Individual performance assessment continued
Saga plc
Annual Report and Accounts 2026
90
Details of the individuals’ achievements are set out in the tables below.
Personal growth project overview | Committee assessment and basis of achievement for 2025/26 |
Mike Hazell: maximum 10% of overall bonus, achievement 10% of overall bonus | |
Drive strategic growth | Identified and created plans to deliver growth, putting foundations in place and starting to execute |
growth plans to deliver Underlying Profit Before Tax 15 growth to £100.0m. | |
Drive cultural change to create a more | Cultural changes to support our growth plans are underway, including simplifying the business and |
agile way of working across Saga | transforming the Operating Board. |
Mark Watkins: maximum 10% of overall bonus, achievement 10% of overall bonus | |
Delivering a cost base to support the | Delivered a restructured, efficient and sustainable cost base to support the changing operating |
changing operating model and delivery | model. Leveraging more Group resources to implement business unit projects, including the |
of strategic initiatives | Insurance transformation and the consolidation of the Cruise and Holidays businesses. |
Steve Kingshott: maximum 10% of overall bonus, achievement 10% of overall bonus | |
Support the successful transition | Successfully supported the first phase of the Ageas 16 partnership implementation. |
to Ageas 16 | |
RSP scheme interests vesting during the financial year
No awards vested during the year for any current Executive Directors, however, the 2022 RSP vested on 13 July 2025 at 90% of maximum for
the former Group CEO and CFO. Full details are set out on page 92 under payments to past directors.
RSP scheme interests awarded during the financial year (audited)
On 25 June 2025, the RSP award was granted to the Group CEO and Group CFO. Details of the awards are set out below.
Number of | Face value | Total face value | |||||
Director | Award type | Basis of award | Date of grant | Date of vesting | shares granted | per share 17 | of award |
Mike Hazell | Nil-cost options | 100% of salary | 25 June 2025 | 25 June 2028 | 350,227 | 175.6p | £615,000 |
Group CEO | |||||||
Mark Watkins | Nil-cost options | 85% of salary | 25 June 2025 | 25 June 2028 | 199,672 | 175.6p | £350,625 |
Group CFO |
Deferred Bonus Plan (
DBP
)
On 28 May 2025, the deferred element of the executive annual bonus award was granted to the Group CEO, Group CFO and the former CEO of
Insurance. Details of the award are set out below.
Number of | Face value | Total face value | End of | ||
Director | Award type | shares granted | per share 17 | of award | deferral period |
Mike Hazell | Deferred shares | 177,412 | 143.6p | £254,765 | 28 May 2028 |
Group CEO | |||||
Mark Watkins | Deferred shares | 92,402 | 143.6p | £132,690 | 28 May 2028 |
Group CFO | |||||
Steve Kingshott | Deferred shares | 88,009 | 143.6p | £126,381 | 28 May 2028 |
Executive Director | |||||
(previously CEO | |||||
of Insurance) |
15
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
16
Wholly owned UK subsidiaries of Ageas SA/NV
17
Represents the mid-market quotation (
MMQ
) share price on the day prior to the grant
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Annual Report and Accounts 2026
91
Directors’ share interests (audited)
Executive Directors are required to build up their shareholdings over a reasonable amount of time, which would normally be five years, and then
subsequently hold a shareholding equivalent to a percentage of base salary. The following table sets out the equity interests held by the Executive
and Non-Executive Directors (including those of their connected persons). If there are any changes to equity interests between the end of the
reporting year and the Notice of Annual General Meeting (the
Notice
), we will include an updated position in our Notice.
Unvested nil-cost options held | |||||||||||
Long-term | Deferred | ||||||||||
Incentive Plan | bonus | ||||||||||
Shares | ( LTIP ) nil-cost | RSP nil-cost | nil-cost | Unvested SIP | |||||||
counting | options | options not | options | Vested but | shares not | ||||||
Shareholding | Current | towards | subject to | subject to | subject to | unexercised | subject to | Shareholding | |||
requirement | shareholding | shareholder | Beneficially | performance | continued | continued | Other | nil-cost | performance | requirement | |
Director | (% salary) 18 | (% salary) | requirements 19 | owned | conditions | service | service | awards | options held | conditions | met? |
Executive Directors | |||||||||||
Mike Hazell | 250% | 613% | 724,405 | 78,125 | – | 991,174 | 227,744 | – | – | 253 | Yes |
Mark Watkins | 200% | 359% | 284,392 | 443 | – | 428,576 | 106,700 | – | – | 253 | Yes |
Former Executive Directors | |||||||||||
Steve Kingshott | 200% | 346% | 280,649 | 95,352 | – | 131,804 | 216,907 | – | – | – | Yes |
Non-Executive Directors 20 | |||||||||||
Roger De Haan 21 | – | – | – | 39,897,105 | – | – | – | – | – | – | n/a |
Julie Hopes 22 | – | – | – | 4,419 | – | – | – | – | – | – | n/a |
Gareth Hoskin | – | – | – | 19,018 | – | – | – | – | – | – | n/a |
Gemma Godfrey | – | – | – | 12,438 | – | – | – | – | – | – | n/a |
Anand Aithal | – | – | – | 24,500 | – | – | – | – | – | – | n/a |
Taxable benefits
The taxable benefits for Executive Directors are in line with our wider workforce policies. Mike Hazell and Mark Watkins received private medical
insurance and a company car during the year.
Pension entitlements
Pension contributions for all Executive Directors are aligned with those of the majority of colleagues (6% of salary). Colleagues can, however,
opt to increase their contribution to a maximum of 10%, which the Company will match. This does not apply to Executive Directors. No Executive
Director receives an entitlement under a defined benefit plan.
18
Shareholding requirements are those that were in existence throughout the course of the year and at 31 January 2026
19
The number of shares counting towards the shareholding requirement is calculated by summing beneficially owned shares with unvested nil-cost options which are not subject to
performance conditions, on a net of tax basis as well as any vested but unexercised options on a net of tax basis. The MMQ share price of 520.0p at 31 January 2026 was used for
the purpose of calculating the current shareholding (i.e. value of beneficially owned shares and value of/gain on interests over shares) as a percentage of salary
20
Values are not calculated for Non-Executive Directors as they are not subject to shareholding requirements
21
The connected persons of Roger De Haan include Allison De Haan, who holds 20,750 shares
22
Julie Hopes resigned from the Board with effect from 27 February 2026
Directors’ Remuneration Report
Annual Report on Remuneration
continued
Saga plc
Annual Report and Accounts 2026
92
Payments for loss of office (audited)
As disclosed in the 2025 Annual Report and Accounts, Steve Kingshott stepped down from the Board on 9 April 2025. The Committee
determined that Steve would be treated as a good leaver under the Policy approved by shareholders at the Annual General Meeting on
5 July 2022. The full details of the remuneration arrangements are outlined below.
Steve Kingshott
•
Steve remained a colleague, receiving a salary, benefits and his pension allowance in line with the Policy until cessation of employment on
9 April 2025 (the
Termination Date
) to a total of £89,464.
•
Within 28 days of the Termination Date, Steve received compensation payment for the termination of his employment to a total of £501,801.
This was inclusive of his entitlement to a statutory redundancy payment (£48,727), a payment in lieu of notice, compromising salary
(£422,300), pension allowance (£25,338), benefits (£12,000) and a payment for unused accrued holiday entitlement (£2,436).
•
Subject to the satisfaction of performance measures, and being employed until the Termination Date, a pro rata bonus for 2025/26 was
awarded. This was subject to approval by the Committee, with the bonus satisfied two-thirds in cash and one-third in deferred shares
pursuant to the DBP, in line with the Policy as determined by the Committee.
•
Awards made to Steve under the DBP on 28 April 2022, 26 May 2023, 28 May 2024, 28 May 2025 and any potential award in 2026 will vest
at the normal vesting date and remain subject to the plan rules, including malus and clawback provisions. Awards will be exercisable for
six months after vesting.
•
Awards made to Steve under the DBP as part of his recruitment award on 28 June 2022 and 6 July 2022 will vest at the normal vesting date
and remain subject to the plan rules, including malus and clawback provisions. Awards will be exercisable for six months after vesting.
•
Awards made to Steve under the RSP granted on 13 July 2022 will not be subject to pro rata calculation; awards made on 12 June 2023 and
8 July 2024 will be pro-rated to reflect the period from award date to the Termination Date. All awards will vest at the normal vesting date
subject to the plan rules, including malus and clawback provisions. Awards will be exercisable for six months after vesting.
•
No further RSP awards will be granted to Steve.
•
The 2023 RSP and DBP awards are subject to post-cessation shareholding requirements (
PCSR
) applicable to the Executive Directors for
a two-year period following the Termination Date. None of Steve’s other RSP and DBP awards are subject to any PCSR.
•
Awards granted under the STP will lapse in full on the Termination Date.
•
Steve is required to retain 200% of his salary or (if lower) his final shareholding in shares for a period of two years from the Termination Date,
i.e. until 9 April 2027. On the Termination Date, Steve had an estimated effective shareholding of c.236% of salary (based on a closing share
price of 520.0p at 31 January 2026), which will be subject to the post-cessation holding requirement.
•
In September 2025 Steve exercised his vested DBP awards from June and July 2022 and his RSP 2022, giving a total vested share award
of £324,660.
Peter Bazalgette
Peter Bazalgette resigned from the Board on 9 April 2025 and received no payments for loss of office.
Payments to past directors (audited)
As previously disclosed in the 2024 Annual Report and Accounts, both Euan Sutherland and James Quin stepped down from the Board of
Directors in their roles as the Group CEO and Group CFO in 2023. The full details of the remuneration arrangements for both were fully
disclosed in the 2024 Annual Report and Accounts. The remuneration elements received for the period ending 31 January 2026 are outlined below.
Vesting of 2022 RSP awards
The RSP award granted on 13 July 2022 vested on 13 July 2025 at 90% of maximum for both Euan and James. The Committee reviewed the
performance of the award and made an adjustment to the final vesting level to take into account the experience and expectation of our
shareholders and the value of their shareholdings over the life of this award. The table below sets out the number of shares that vested.
Value of | Proportion of | Value of | ||||||
Face value of | award at | End of | Pro-rated | award vesting | award | |||
award | Shares | grant | vesting | for step | as percentage | No. shares | vesting | |
Director | (% of salary) | awarded | (£) | period | down | of maximum | vesting | (£) |
Former Group CEO | 80% | 333,300 | 582,610 | 13 July 2025 | 166,650 23 | 90% | 149,985 | 274,772 |
Euan Sutherland | ||||||||
Former Group CFO | 68% | 171,458 | 299,170 | 13 July 2025 | 100,017 23 | 90% | 90,015 | 164,907 |
James Quin |
Fees retained for external non-executive directorships
Executive Directors may hold positions in other companies as non-executive directors and retain the fees. Mike Hazell does not hold any external
directorships. Steve Kingshott did not hold any external directorships prior to departure from the Board. Mark Watkins was appointed as a
Director for Creative Folkestone on 23 September 2024 but does not receive a fee.
23
The RSP original award to the former Group CEO and former Group CFO were pro-rated under the scheme rules, given their leave dates prior to the date of the award vesting
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Saga plc
Annual Report and Accounts 2026
93
Governance of remuneration
Wider workforce
For the Committee to review the wider workforce pay, policies and incentives, reports are regularly considered at Committee meetings, setting
out key details of remuneration throughout the Company. Alongside its review of the wider workforce remuneration, the Committee considers
the approach applied to the Executive Directors and senior management. In particular, the Committee is focussed on ensuring the approach to
the remuneration of the Executive Directors and senior management is consistent with that applied to the wider workforce.
The table summarises some of the key workforce reward elements that are regularly discussed by the Committee:
Bonus | Bonus schemes contain both financial and personal measures. A financial scorecard is used for all colleagues at Saga |
linked to their business unit, including Executive Directors. Malus and clawback are in place for the colleagues in our | |
Senior Leadership Team. | |
Other incentive | Incentive arrangements that are paid more frequently are also operated in our contact centres. These incentive |
schemes | schemes are reviewed regularly to ensure best practice and market alignment. The method of calculation and |
frequency of payment varies, depending on business area and product. | |
Base pay | All colleagues received an increase of 2.5% of base pay in February 2025. |
National Living | Saga continues to be committed to paying above National Living Wage for all UK colleagues and, in 2025, maintained |
Wage | accreditation as a Real Living Wage employer. |
RSP | RSP awards are granted across senior leadership at Saga. Eligible colleagues received an RSP grant in 2025, ranging |
from 20% to 50% of salary. | |
SIP | We continue to promote our SIP, so that all colleagues can invest in the Company’s success. The plan enables |
colleagues to purchase shares through payroll. | |
Pension | Saga operates a single defined contribution Master Trust arrangement with Aviva. At 31 January 2026, there were |
1,597 colleagues in this scheme. |
The Committee Chair engages regularly with the People Committee, gaining regular feedback and outlining executive remuneration. Feedback
from this engagement is then shared with the Committee. Find out more in our 2026 Environmental, Social and Governance Report.
Pay comparisons
Group CEO ratio
Our Group CEO to average colleague pay ratio for 2025/26 was 62:1. To give context to this ratio, we include a chart below which tracks the CEO
to average colleague pay ratio since 2015/16 alongside Saga’s total shareholder return (
TSR
) performance over a 10-year period. We also show
this against the performance of the FTSE Small Cap (
SMC
) during the same time span.
Jan-16
TSR rebased to 100 from January 2016
Jan-17
Jan-18
78:1
40:1
116:1
48:1
41:1
76:1
76:1
56:1
63:1
50:1
62:1
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Jan-24
Jan-25
Jan-26
150
200
Saga TSR
100
50
0
FTSE SMC
CEO pay ratio
The chart shows the value of £100 invested in the Company’s shares compared with the FTSE SMC index. The graph shows the TSR generated
by the movement in share value and the reinvestment over the same period of dividend income. This graph was calculated in accordance with the
Financial Conduct Authority UK Listing Rules.
In summary, there has been significant volatility in Group CEO pay, and we believe that this is caused by the factors set out below.
•
Our Group CEO’s pay is made up of a higher proportion of incentive pay than that of our colleagues, in line with the expectations of our
shareholders and accepted market practice for senior executive roles. This introduces a higher degree of variability in pay each year, which,
in turn, affects the ratio.
•
The value of long-term incentives, which measure performance over three years, is disclosed in the year they vest, which increases the
Group CEO’s pay in that year, again impacting the ratio.
•
We recognise that the ratio is driven by the different structure of pay for our Group CEO versus that of our colleagues, as well as the make-up
of our workforce. This ratio varies between businesses in the same sector. What is important from our perspective is that this ratio is
influenced only by the differences in structure, and not by divergence in fixed pay between the Group CEO and wider workforce.
Where the structure of remuneration is similar, as for the Operating Board and the Group CEO, the ratio is much more stable over time.
Directors’ Remuneration Report
Annual Report on Remuneration
continued
Saga plc
Annual Report and Accounts 2026
94
Colleague and CEO ratios
The table below sets out the total remuneration received by the Group CEO using the methodology applied to the single total figure
of remuneration.
Group Chief | |||||||||||
Executive Officer | 2016/17 | 2017/18 | 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | |
Total single | Lance Batchelor | 2,490,617 | 1,025,146 24 | 1,191,743 | 946,353 | – | – | – | – | – | – |
figure (£) | |||||||||||
Euan Sutherland | – | – | – | 116,535 | 2,118,471 | 2,401,273 25 | 1,753,093 | 1,835,610 26 | – | – | |
Mike Hazell | – | – | – | – | – | – | – | 223,363 26 | 1,894,030 | 2,203,240 | |
Annual bonus | Lance Batchelor | 67.5% | – | 35.1% | 18.2% | – | – | – | – | – | – |
payment level | Euan Sutherland | – | – | – | 66.8% | 83.1% | 85.4% | 35.3% | 61.4% | – | – |
achieved | Mike Hazell | – | – | – | – | – | – | – | 71.9% | 84.9% | 100% |
(percentage | |||||||||||
of maximum | |||||||||||
opportunity) | |||||||||||
LTIP vesting | Lance Batchelor | 65.6% | 26.0% | – | – | – | – | – | – | – | – |
level achieved | |||||||||||
(percentage | Euan Sutherland | – | – | – | – | n/a 28 | 10.0% | n/a 28 | 90.0% 29 | 90.0% 29 | – |
of maximum | |||||||||||
opportunity) 27 | |||||||||||
Mike Hazell | – | – | – | – | – | – | – | n/a | n/a | n/a | |
Ratio of Group | Option used | Option B 30 | Option B 30 | Option B 30 | Option B 30 | Option B 30 | Option B 30 | Option B 30 | Option B 30 | Option B 30 | |
CEO single total | 25 th percentile | n/a | 8:1 | 59:1 | 46:1 | 97:1 | 104:1 | 66:1 | 71:1 | 67:1 | 75:1 |
remuneration figure | Median | 116:1 | 40:1 32 | 48.1 33 | 41:1 34 | 76:1 35 | 76:1 36 | 56:1 37 | 63:1 38 | 50:1 39 | 62:1 40 |
to all colleagues 30,31 | 75 th percentile | n/a | 33:1 | 36.1 | 29:1 | 55:1 | 55:1 | 42:1 | 41:1 | 36:1 | 38:1 |
Ratio of single | 4:1 | 3:1 | 3:1 | 2:1 | 4:1 | 3:1 | 3:1 | 3:1 | 3:1 | 3:1 | |
total remuneration | |||||||||||
figure shown to | |||||||||||
executive members |
The colleague pay figures used to calculate the ratio are as follows:
25 th percentile | Median | 75 th percentile | ||
2025/26 | Salary | £25,744 | £30,403 | £47,046 |
Total pay | £29,317 | £35,428 | £57,859 |
24
For 2017/18, the final value of the 2015 LTIP award at vesting date is shown and is restated from the 2017/18 Annual Report and Accounts. The share price at the vesting date of
30 June 2018 was 125.6p
25
The final value of the 2019 LTIP award had not been confirmed at the time the 2022 Annual Report and Accounts was published and, therefore, was not included in the 2021/22
single figure. The final vesting of the 2019 LTIP was confirmed as 10% of maximum and, therefore, the 2021/22 single figure was restated
26
Mike Hazell was appointed as the Group CEO on 28 November 2023. Euan Sutherland’s payments reflect the period until he stepped down as Group CEO on 28 November 2023
27
As disclosed in the 2021 Annual Report and Accounts, in 2020, the LTIP was replaced with an RSP and, therefore, 2023/24 was the first year the RSP vested
28
No LTIP awards were eligible to vest for the Group CEO in post during 2020/21 and 2022/23
29
The 2021 and 2022 RSP awards vesting in April 2024 and July 2025 vested at 90% of maximum, including a discretionary 10% reduction applied by the Committee
30
For the colleague ratio, Saga chose to use Option B, identifying colleagues using our gender pay gap data. This was the preferred option due to the availability of data for our many
UK-based, overseas and part-time colleagues for whom single total figure data is difficult to calculate. Figures have been completed for 2017/18 to 2025/26, using the April gender
pay gap data for that year. To mitigate any anomalies, 11 individuals were identified at each percentile point from the gender pay gap data and the median of pay in the years 2017/18
to 2025/26 for these colleagues was calculated in line with the single total figure methodology
31
The median ratios shown for 2016/17 were recalculated to allow a comparison with the 2017/18 to 2025/26 figures, which were calculated in line with the methodology prescribed
by the regulations
32
The fall in ratio in 2017/18 was due to the forfeiture of bonus by the Group CEO and the relatively low payout on the LTIP. This reflects the fact that shareholders want executives to
have a higher proportion of pay at risk and this is reflected in the volatility in the chart. The percentage change in Group CEO remuneration set out in the table on page 95 shows
that year-on-year, when the volatility of payouts from equity-based awards is excluded, the changes in remuneration for the Group CEO and average colleagues are broadly in line.
This demonstrates that the underlying compensation ratio is not increasing year on year
33
The increase in ratio for 2018/19 was due to the Group CEO receiving a bonus in 2018/19. This increase remained low due to a relatively low bonus and LTIP payout
34
The fall in ratio for 2019/20 was due to the rebalancing of base pay and commission in our contact centres
35
The increase in ratio in 2020/21 was due to the relatively high bonus payout in 2020/21 and RSP award granted to the Group CEO in 2020/21
36
No change in ratio in 2021/22 due to the similar payout in bonus
37
The fall in ratio in 2022/23 was due to the lower bonus payout
38
The increase in ratio in 2023/24 was due to the relatively high bonus payout
39
The decrease in ratio in 2024/25 was due to a lower CEO total single figure in comparison with previous years and the result of aligning base pay to the Real Living Wage
40
The increase in ratio in 2025/26 was due to higher CEO total figure as a result of higher annual bonus outcome
Strategic Report
Strategic Report
Governance
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
95
Annual percentage change in remuneration of Directors and other colleagues
The following table sets out the change in the remuneration paid to each Director from 2019/20 to 2025/26, compared with the average
percentage change for other colleagues.
The percentage change for each Director’s remuneration in the table below is based on the figures in the single total figure table on page 87.
Average colleague pay has been calculated using the following elements:
•
Annual salary: base salary and standard monthly allowances.
•
Taxable benefits: car allowance and private medical insurance premiums.
•
Annual bonus: company bonus, management bonus, commission and incentive payments.
% increase/(decrease) in | % increase/(decrease) in | % increase/(decrease) in | % increase/(decrease) in | % increase/(decrease) in | % increase/(decrease) in | |||||||||||||
remuneration in 2020/21 | remuneration in 2021/22 | remuneration in 2022/23 | remuneration in 2023/24 | remuneration in 2024/25 | remuneration in 2025/26 | |||||||||||||
compared with previous year | compared with previous year | compared with previous year | compared with previous year | compared with previous year | compared with previous year | |||||||||||||
| (2019/20) | (2020/21) | (2021/22) | (2022/23) | (2023/24) | (2024/25) | |||||||||||||
Salary/ | Taxable | Annual | Salary/ | Taxable | Annual | Salary/ | Taxable | Annual | Salary/ | Taxable | Annual | Salary/ | Taxable | Annual | Salary/ | Taxable | Annual | |
fees | benefits | bonus | fees | benefits | bonus | fees | benefits | bonus | fees | benefits | bonus | fees | benefits | bonus | fees | benefits | bonus | |
Mike Hazell 41 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 3.9% | 2.3% | 28.8% | 2.5% | 0.8% | 20.7% |
Mark Watkins 42 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | – | 2.3% | 18.1% | 10.0% | 0.8% | 29.5% |
Steve Kingshott 43 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 3.0% | 0.3% | 10.9% | – | 1.9% | 104.5% | 2.5% | 14.4% 44 | 46.9% |
Roger De Haan 45 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Julie Hopes 46 | 41.7% 46 | n/a | n/a | (1.0%) 46 | n/a | n/a | (0.8%) 46 | n/a | n/a | (19.0%) 46 | n/a | n/a | 6.5% 46 | n/a | n/a | (1.5%) | n/a | n/a |
Gareth Hoskin | 9.3% 47 | n/a | n/a | 2.9% 47 | n/a | n/a | – | n/a | n/a | 2.7% | n/a | n/a | – | n/a | n/a | (12.8%) 47 | n/a | n/a |
Gemma Godfrey 48 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 24.2% 49 | n/a | n/a | – | n/a | n/a | 2.5% | n/a | n/a |
Peter Bazalgette 48 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 10.9% 50 | n/a | n/a | – | n/a | n/a | – | n/a | n/a |
Anand Aithal 48 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 8.4% 51 | n/a | n/a | – | n/a | n/a | 2.2% | n/a | n/a |
Average per colleague | 3.2% 52 | 2.7% | 67.8% | 4.1% 52 | 6.6% | 5.4% | 13.3% 52 | 3.6% | (49.9%) | 4.6% 52 | 2.5% | 58.2% | 6.3% 52 | 5.8% | 47.1% | 7.7% 52 | (0.7%) | 96.7% |
Relative importance of the spend on pay
The table below sets out the relative importance of spend on pay in the 2025/26 and 2024/25 financial years, compared with other
disbursements. All figures provided are taken from the relevant Company accounts.
Disbursements from | Disbursements from | ||
profit in 2025/26 | profit in 2024/25 | ||
financial year | financial year | ||
£m | £m | Percentage change | |
Profit distributed by way of dividend | – | – | – |
Total tax contributions 53 | 30.1 | 22.0 | 36.8% |
Overall spend on pay including Executive Directors | 131.3 | 119.4 | 10.0% |
41
No comparison for Mike Hazell prior to 2024/25 due to him becoming a Director on 9 October 2023. The increase in salary in 2024/25 was due to moving from CFO to CEO on
28 November 2023
42
No comparison for Mark Watkins prior to 2024/25 due to him becoming a Director on 28 November 2023
43
No comparison for Steve Kingshott prior to 2023/24 due to him becoming a Director on 3 January 2023
44
The increase in taxable benefit for Steve Kingshott is due to his settlement agreement paid in April 2025 covering 12 months so also covers February to April 2026
45
Roger De Haan has waived his fee since becoming Chairman in 2020
46
The increase in fees for Julie Hopes in 2020/21 was due to her becoming Chair of the Saga Personal Finance (
SPF
) board on 1 February 2020 and assuming the position of Risk
Committee Chair on 31 December 2020. The decrease in fees in 2021/22 was due to the reduction in the fee for the Chair of SPF role on 1 January 2021 following a review of the
role. The decrease in fees in 2022/23 and 2023/24 is due to her stepping down from the role as Chair of SPF on 10 January 2023. She also assumed the position of Remuneration
Chair on 31 December 2023. Julie Hopes resigned from the Board with effect from 27 February 2026
47
The increase in fees for Gareth Hoskin in 2020/21 and 2021/22 was due to him becoming Chair of the Audit Committee on 22 June 2020. The fall in fees in 2025/26 is due to
Gareth previously chairing Acromas Insurance Company Limited, which ceased following its sale to wholly owned UK subsidiaries of Ageas SA/NV
48
No comparison for Gemma Godfrey, Peter Bazalgette and Anand Aithal prior to 2022/23 due to them joining in September 2022
49
The increase in fees for Gemma Godfrey in 2023/24 was due to her becoming Chair of SPF on 10 January 2023
50
The increase in fees for Peter Bazalgette in 2023/24 was due to him becoming Senior Independent Director and Chair of the Nomination Committee on 30 September 2022
51
The increase in fees for Anand Aithal in 2023/24 was due to him becoming Chair of the Innovation and Enterprise Committee on 1 November 2022
52
The average salary per colleague increased in 2020/21 and 2021/22 due to a combination of the annual salary increase, Company restructuring, which altered our colleague base,
and the impacts of the COVID-19 pandemic. The increase in salary in 2022/23 was due to a combination of two pay increases for the wider workforce and further investment in
base pay. The increase in salary in 2023/24 was a result of Company restructuring, which altered our colleague base, and an uplift in the entry salary within our contact centres.
The increase in salary in 2024/25 is a result of the annual pay review and alignment to the Real Living Wage. The increase in salary in 2025/26 was a result of investment in base pay
including Real Living Wage alignment and also due to our colleague base changing as a result of our partnership with wholly owned UK subsidiaries of Ageas SA/NV
53
Total tax contributions include corporation tax, national insurance contributions, irrecoverable value added tax and air passenger duty
Directors’ Remuneration Report
Annual Report on Remuneration
continued
Saga plc
Annual Report and Accounts 2026
96
Advisers to the Committee
Saga plc appointed Willis Towers Watson (
WTW
) to act as independent adviser to the Committee in 2025/26, following a competitive tender
process undertaken by the Committee. PricewaterhouseCoopers (
PwC
) continued to act as independent adviser to the Committee until
1 December 2025, at which point WTW commenced work for the Committee.
Both WTW and PwC are members of the Remuneration Consultants Group and, as such, operate under the code of conduct in relation to
executive remuneration consulting in the UK. The Committee is therefore satisfied that the advice received from its advisers is objective
and independent.
Fees of £65,241 were paid to PwC and fees of £45,000 were paid to WTW in respect of the advice provided to the Committee in relation
to director remuneration in 2025/26. Fees were charged at a combination of fixed amounts for specific items of work and hourly rates.
The Committee receives support from the Chief People Officer and Group Company Secretary.
Shareholder voting
The current Policy was approved by shareholders at the AGM held on 24 June 2025. Outlined below are the voting outcomes for this and in
respect of approving the Directors’ Remuneration Report.
% of issued |
||||||||
% of |
Votes |
% of |
Votes |
share capital |
Votes |
|||
Resolution |
AGM date |
Votes for |
votes cast |
against |
votes cast |
cast 54 |
voted |
withheld |
To approve the Directors’ |
24 June 2025 |
82,956,453 |
99.56 |
366,879 |
0.44 |
83,461,141 |
58.2 |
137,809 |
Remuneration Report |
||||||||
To approve the Directors’ |
24 June 2025 |
82,951,796 |
99.63 |
305,884 |
0.37 |
83,461,141 |
58.2 |
203,461 |
Remuneration Policy |
54
Directors’ Remuneration Policy
This document sets out the Saga plc (the
Company
) Policy on remuneration for Executive and Non-Executive Directors (the
Policy
), which
was approved by shareholders at the 2025 Annual General Meeting (
AGM
) to take effect immediately afterwards. The Policy was prepared
in accordance with the requirements of the UK Companies Act 2006 (the
Act
), Schedule 8 of the Large and Medium-Sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013 (the
Regulations
) and the UK Listing Rules. The Remuneration Committee
(the
Committee
) built in a degree of flexibility to ensure the practical application of the Policy. Where such discretion is reserved, the extent to
which it may be applied is described. The Policy retains, as its primary goal, the ability to attract, retain and motivate its leaders and to ensure
they are focussed on delivering business priorities within a framework designed to promote the long-term success of Saga, aligned with
shareholder interests.
The Board delegated its responsibility to the Committee to establish the Policy on the remuneration of the Executive Directors and the Chair.
The Board established the Policy on the remuneration of the other Non-Executive Directors.
Summary of the Policy approved at the 2025 AGM
Remuneration elements
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Fixed pay
Salary
Fixed pay
Benefits and pension
Annual bonus
(Malus and clawback
provisions apply)
Restricted Share
Plan (
RSP
)
(Malus and clawback
provisions apply)
Shareholding
requirements
Changes made to the previous Policy
Element
Changes to Policy
Rationale
Long-term incentives – Saga
Transformation Plan (
STP
)
Removal of the STP which provided participants
with a portion of the value created above a
stretching hurdle over a five-year period.
To simplify and deleverage the executives’
remuneration package. The highly geared nature
of the STP is no longer aligned to the updated
business strategy and is neither motivational
nor retentive for the current executives.
Long-term incentives – RSP
Awards will be made at the levels approved and
operated prior to the introduction of the STP.
The 20% reduction applied to the RSP award
levels upon STP introduction was removed for
future RSP awards.
The RSP is highly retentive and supports
executives in the delivery of the business strategy.
Stability of leadership during the Ageas
1
transaction is critical to the long-term success
of the business.
Additionally, the RSP maintains the link to
shareholder experience through incentivisation
of share price growth and the performance
underpin is retained for the Committee to adjust
vesting if business performance, individual
performance or wider Company considerations
mean, in their view, that an adjustment is required.
1
Wholly owned UK subsidiaries of Ageas SA/NV
Minimum one-third shares
Three-year deferral period subject
to continued service
Two-year holding period
Up to 100% of salary
Three-year performance
Salary
Benefits
and
pension
Maximum
two-thirds
cash
Executive Directors build and maintain a 200% of salary (250% of salary
for Group Chief Executive Officer (
CEO
)) minimum shareholding
requirement while in employment and post-employment
Saga plc
Annual Report and Accounts 2026
97
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Remuneration Report
Directors’ Remuneration Policy
continued
Policy table
Base salary
Element and link to strategy
Provides a base level of remuneration to support recruitment and retention of Executive Directors
with the necessary experience and expertise to deliver the Group’s strategy.
Operation
An Executive Director’s basic salary is set on appointment and reviewed annually, or when there
is a change in position or responsibility. When determining an appropriate level of salary, the
Committee considers:
•
pay increases to other colleagues;
•
remuneration practices within the Group;
•
any change in scope, role and responsibilities;
•
the general performance of the Group and each individual;
•
the experience of the relevant Director; and
•
the economic environment.
Individuals who are recruited or promoted to the Board may, on occasion, have their salaries set below
the targeted policy level until they become established in their role. In such cases, subsequent
increases in salary may be higher than the general rises for colleagues until the target positioning
is achieved.
Maximum potential value
The Committee ensures that maximum salary levels are positioned in line with companies of a similar
size and complexity to Saga and validated against an appropriate comparator group so that they are
competitive against the market.
The Committee continues to review the comparators each year and will add or remove companies
from the comparator group as it considers appropriate.
In general, salary increases for Executive Directors will be in line with the increase for colleagues.
However, larger increases may be offered if there is a material change in the size and responsibilities
of the role (which covers significant changes in Group size and/or complexity).
The Company will set out the Executive Directors’ salaries for the following financial year in each
Directors’ Remuneration Report.
Performance conditions and
recovery provisions
A broad assessment of individual and business performance is used as part of the salary review.
No recovery provisions apply.
Changes to previous Policy
No changes.
Pension
Element and link to strategy
Provides a fair level of pension provision for all colleagues.
Operation
The Company provides a pension contribution allowance that is fair, competitive and in line with
governance best practice.
Pension contributions will be a non-consolidated allowance and will not impact any incentive
calculations.
Maximum potential value
The maximum value of the pension contribution allowance for both current and newly appointed
Executive Directors is aligned with the majority of colleagues, currently 6% of salary.
Performance conditions and
recovery provisions
No performance or recovery provisions apply.
Changes to previous Policy
No changes.
Benefits
Element and link to strategy
Provides a market-standard level of benefits.
Operation
Benefits may include family private health cover, death in service life assurance, car allowance,
subsistence expenses and discounts, in line with other colleagues.
The Committee recognises the need to maintain suitable flexibility in the benefits provided to ensure
it is able to support the objective of attracting, and retaining, colleagues in order to deliver the Group
strategy. Additional benefits which are available to other colleagues on broadly similar terms may
therefore be offered, such as relocation allowances on recruitment.
Maximum potential value
The maximum is the cost of providing the relevant benefits.
Performance conditions and
recovery provisions
No performance or recovery provisions apply.
Changes to previous Policy
No changes.
Saga plc
Annual Report and Accounts 2026
98
Annual Bonus Plan
Element and link to strategy
The Annual Bonus Plan provides a significant incentive to the Executive Directors, linked to
achievement of goals that are closely aligned with the Company’s strategy and the creation of value
for shareholders.
In particular, the Annual Bonus Plan supports the Company’s objectives, allowing the setting of annual
targets based on the business’ strategic objectives at that time, meaning that a wider range of
performance metrics can be used that are relevant and achievable.
Operation
The Committee will determine the maximum annual participation in the Annual Bonus Plan for each
year, which will not exceed 150% of salary.
The Company will set out in the Directors’ Remuneration Report, in the following financial year, the
nature of the targets and their weighting for each year.
Details of the performance conditions, targets and their level of satisfaction for the year being
reported will be set out in the Annual Report on Remuneration.
The Committee can determine that part of the bonus earned under the Annual Bonus Plan is provided
as an award of shares under the Deferred Bonus Plan (
DBP
) element. The minimum level of deferral is
one-third of the bonus; however, the Committee may determine that a greater portion, or in some
cases the entire bonus, be paid in deferred shares. The main terms of these awards are:
•
minimum deferral period of three years; and
•
the participant’s continued employment at the end of the deferral period, unless they are a good
leaver.
The Committee may award dividend equivalents on those shares to plan participants to the extent
that they vest. The Committee has the discretion to apply a holding period of two years post-vesting
for DBP shares.
Maximum potential value
The Committee will determine the maximum annual participation in the Annual Bonus Plan for each year,
which will not exceed 150% of salary. Percentage of bonus maximum earned for levels of performance:
•
Threshold: up to 20% of maximum opportunity
•
Target: 50% of maximum opportunity
•
Maximum: 100% of maximum opportunity
Performance conditions and
recovery provisions
The Annual Bonus Plan is based on a mix of financial and strategic/operational conditions and is
measured over a period of one financial year. The financial measures will account for no less than 50%
of the bonus opportunity.
The Committee retains discretion, in exceptional circumstances, to change performance measures
and targets and the weightings attached to performance measures part-way through a performance
year if there is a significant and material event which causes the Committee to believe the original
measures, weightings and targets are no longer appropriate. Discretion may also be exercised in cases
where the Committee believes that the bonus outcome is not a fair and accurate reflection of business,
individual or wider Company performance. The exercise of this discretion may result in a downward,
or upward, movement in the amount of bonus earned resulting from the application of the
performance measures.
Any adjustments or discretion applied by the Committee will be fully disclosed in the following year’s
Directors’ Remuneration Report. The Committee is of the opinion that, given the commercial
sensitivity arising in relation to the detailed financial targets used for the annual bonus, disclosing
precise targets for the Annual Bonus Plan in advance would not be in shareholders’ interests. Actual
targets, performance achieved, and awards made will be published at the end of the performance
period so shareholders can fully assess the basis for any payouts under the Annual Bonus Plan.
Both the Annual Bonus Plan and the DBP contain malus and clawback provisions.
Changes to previous Policy
No changes.
Saga plc
Annual Report and Accounts 2026
99
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Remuneration Report
Directors’ Remuneration Policy
continued
Directors’ Remuneration Policy table continued
RSP
Element and link to strategy
Awards are designed to incentivise the Executive Directors over the longer term to successfully
implement the Company’s strategy.
Operation
Awards are granted annually to Executive Directors in the form of Restricted Shares. Restricted
Shares vest at the end of a three-year period subject to:
•
the Executive Director’s continued employment at the date of vesting; and
•
the satisfaction of an underpin as determined by the Committee, whereby the Committee can adjust
vesting for business, individual and wider Company performance.
A two-year holding period will apply following the three-year vesting period for all awards granted to
the Executive Directors.
Upon vesting, sufficient shares may be sold to pay tax on the shares.
The Committee may award dividend equivalents on awards to the extent that they vest.
Maximum potential value
Maximum value of 100% of salary per annum based on the market value at the date of grant set in
accordance with the rules of the plan.
Performance conditions and
recovery provisions
No specific performance conditions are required for the vesting of Restricted Shares but there will be
an underpin in that the Committee will have the discretion to adjust vesting taking into account
business, individual and wider Company performance.
The Committee will take into account the following factors (among others) when determining whether
to exercise its discretion to adjust the number of shares vesting:
•
Whether threshold performance levels have been achieved for the performance conditions for the
Annual Bonus Plan for each of the three years covered by the vesting period for the Restricted Shares.
•
Whether there have been any sanctions or fines issued by a regulatory body; participant
responsibility may be allocated collectively or individually.
•
Whether there has been material damage to the reputation of the Company; participant
responsibility may be allocated collectively or individually.
•
The potential for windfall gains.
•
The level of colleague and customer engagement over the period.
•
The RSP is subject to malus and clawback provisions.
Changes to previous Policy
Awards will be made at the levels approved and operated prior to the introduction of the STP.
The 20% reduction applied to the RSP award levels upon STP introduction is being removed for future
RSP awards.
Saga plc
Annual Report and Accounts 2026
100
Shareholding requirement
The Committee already had in place strong shareholding requirements (as a percentage of base salary) that encourage Executive Directors
to build up their holdings over a five-year period. Adherence to these guidelines is a condition of continued participation in the equity incentive
arrangements. This policy ensures that the interests of Executive Directors and those of shareholders are closely aligned.
In addition, Executive Directors will be required to retain 50% of the post-tax amount of vested shares from the Company incentive plans until
the minimum shareholding requirement is met and maintained. The following table sets out the minimum shareholding requirements:
Role
Shareholding requirement (percentage of salary)
Group CEO
250%
Other Executive Directors
200%
The Committee retains the discretion to increase the shareholding requirements.
The Committee has introduced a post-cessation shareholding requirement of the full in-employment requirement as listed above (or the
Executive’s actual shareholding on cessation, if lower) for two years following cessation.
Chair and Non-Executive Director fees
Purpose
Provides a level of fees to support recruitment and retention of a Non-Executive Chairman and
Non-Executive Directors with the necessary experience to advise and assist with establishing and
monitoring the Group’s strategic objectives.
Operation
The Board is responsible for setting the remuneration of the Non-Executive Directors. The Committee
is responsible for setting the Non-Executive Chairman’s fees.
Non-Executive Directors are paid an annual fee and additional fees for chairing committees.
The Company retains the flexibility to pay fees for the membership of committees. Non-Executive
Directors will be entitled to an additional fee if they are required to perform any specific and
additional services.
Chair and membership fees may be introduced for any new committees.
The Non-Executive Chairman does not receive any additional fees for membership of committees.
Fees are reviewed annually, taking into account time commitment, responsibilities and equivalent
roles in the comparator group used to review salaries paid to the Executive Directors. Non-Executive
Directors and the Non-Executive Chairman do not participate in any variable remuneration or
benefits arrangements.
Maximum potential value
The fees for Non-Executive Directors are broadly set at a competitive level against the
comparator group.
In general, the level of fee increase for the Non-Executive Directors and the Non-Executive Chairman
will be set taking account of any change in responsibility and the general rise in salaries across the
UK workforce. The aggregate fee for the Non-Executive Directors and the Non-Executive Chairman
will not exceed £2.0m.
The Company will pay reasonable expenses incurred by the Non-Executive Directors and Non-Executive
Chairman and may settle any tax incurred.
Performance metrics
No performance or recovery provisions apply.
Saga plc
Annual Report and Accounts 2026
101
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Remuneration Report
Directors’ Remuneration Policy
continued
Illustration of application of the Policy
The chart below shows an estimate of the remuneration that could be received by Executive Directors under the first year of the operation of the
Policy set out in this report.
30%
27%
Minimum
Target
Maximum
Maximum
(with 50%
share price
growth)
Minimum
Target
Mike Hazell
Group CEO
Mark Watkins
Group CFO
Maximum
Maximum
(with 50%
share price
growth)
42%
12%
37%
24%
28%
3,000
Fixed
Figures shown (£’000)
2,500
2,000
1,500
500
1,000
0
Bonus
RSP
Share price growth
52%
38%
48%
35%
26%
£1,281
£1,742
£2,203
£2,511
56%
43%
24%
44%
33%
34%
39%
27%
30%
35%
23%
12%
£802
£1,059
£1,317
£1,493
Element
Minimum
Target
Maximum
Maximum with 50%
share price growth
Fixed elements
Base salary for 2025/26.
Benefits paid for 2024/25.
Pension in line with policy at 6% of salary.
Annual bonus
Nil.
50% of the maximum
opportunity.
100% of the maximum
opportunity.
100% of the maximum
opportunity.
Restricted Shares
100% vesting of
Restricted Shares.
Award levels are 100%
of salary for the Group
CEO, 85% of salary
for the Group Chief
Financial Officer (
CFO
).
100% vesting of
Restricted Shares.
Award levels are 100% of
salary for the Group CEO,
85% of salary for the
Group CFO.
100% vesting of
Restricted Shares.
Award levels are 100% of
salary for the Group CEO,
85% of salary for the
Group CFO.
100% vesting of
Restricted Shares plus
50% share price growth.
Award levels are 100% of
salary for the Group CEO,
85% of salary for the
Group CFO.
Scenario charts show minimum, target and maximum scenarios in accordance with the Regulations, as well as the impact of a 50% share price
growth on the long-term incentives for the maximum scenario. All scenarios do not account for dividend equivalents on DBP shares or
RSP shares.
Saga plc
Annual Report and Accounts 2026
102
Discretion within the Policy
The Committee has discretion in several areas of policy as set out in this report. The Committee may also exercise operational and
administrative discretions under relevant plan rules as set out in those rules. In addition, the Committee has the discretion to amend the
Policy with regard to minor or administrative matters where it would be, in the opinion of the Committee, disproportionate to seek or await
shareholder approval.
Malus and clawback
Malus is the adjustment of the annual bonus payments or unvested RSP awards because of the occurrence of one or more of the
circumstances listed below. The adjustment may result in the value being reduced to nil.
Clawback is the recovery of payments made under the Annual Bonus Plan or vested RSP awards as a result of the occurrence of one or more
of the circumstances listed below. Clawback may apply to all, or part, of a participant’s payment under the Annual Bonus Plan and RSP award
and may be affected, among other means, by requiring the transfer of shares, payment of cash or reduction of awards or bonuses. The
circumstances in which malus and clawback could apply are as follows:
•
Discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group, or any Group company.
•
The discovery that any information used to determine the award was based on error, or inaccurate or misleading information.
•
Action or conduct of a participant which amounts to fraud or gross misconduct.
•
Events, or the behaviour of a participant, which have led to the censure of a Group company by a regulatory authority or have had a significant
detrimental impact on the reputation of any Group company, provided that the Committee is satisfied that the relevant participant was
responsible for the censure or reputational damage and that the censure or reputational damage is attributable to the participant.
•
Failure of risk management including, but not limited to, a material breach of risk appetite and regulatory standards.
•
Corporate failure.
Element
Annual bonus (cash)
Annual bonus
(deferred shares)
Restricted Shares
Malus
Up to the date of the
cash payment.
To the end of the three-year
vesting period.
To the end of the three-year
vesting period.
Clawback
Two years post the date
of any cash payment.
n/a
Two years post vesting.
The Committee believes that the rules of the plans provide sufficient powers to enforce malus and clawback where required and undertakes an
annual review to assess if there are reasonable grounds for the malus and clawback provisions to be enforced.
Loss of office policy
When considering compensation for loss of office, the Committee will always seek to minimise the cost to the Company while applying the
following philosophy:
Remuneration element
Treatment on cessation of employment
General
The Committee will honour Executive Directors’ contractual entitlements. Service contracts do not
contain liquidated damages clauses. If a contract is to be terminated, the Committee will determine such
mitigation as it considers fair and reasonable in each case. There are no contractual arrangements that
would guarantee a pension with limited, or no, abatement on severance or early retirement. There is no
agreement between the Company and its Directors, or other colleagues, providing for compensation
for loss of office or employment that occurs because of a takeover bid.
The Committee reserves the right to make additional payments, where such payments are made in
good faith, in discharge of an existing legal obligation (or by way of damages for breach of such an
obligation); or by way of settlement or compromise of any claim arising in connection with the
termination of an Executive Director’s office or employment.
Salary, benefits and pension
These will be paid over the notice period. The Company has discretion to make a lump sum payment
in lieu.
Saga plc
Annual Report and Accounts 2026
103
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Remuneration Report
Directors’ Remuneration Policy
continued
Element
Good leaver reason
Other reason
Discretion
Bonus cash
Performance
conditions will be
measured at the bonus
measurement date.
Bonus will normally be
pro-rated for the
period worked during
the financial year.
No bonus payable for
year of cessation.
The Committee has the following elements of discretion:
•
To determine that an Executive Director is a good leaver. It is the
Committee’s intention to only use this discretion in circumstances
where there is an appropriate business case which will be explained
in full to shareholders.
•
To determine whether to pro-rate the bonus to time. The
Committee’s normal policy is that it will pro-rate bonus for time.
It is the Committee’s intention to use discretion to not pro-rate in
circumstances where there is an appropriate business case which
will be explained in full to shareholders.
Bonus
deferred
share
awards
All subsisting deferred
share awards will vest.
Lapse of any unvested
deferred share awards.
The Committee has the following elements of discretion:
•
To determine that an Executive Director is a good leaver. It is the
Committee’s intention to only use this discretion in circumstances
where there is an appropriate business case which will be explained
in full to shareholders.
•
To vest deferred shares at the end of the original deferral period
or at the date of cessation. The Committee will make this
determination depending on the type of good leaver reason resulting
in the cessation.
•
To determine whether to pro-rate the maximum number of shares
to the time from the date of grant to the date of cessation.
The Committee’s normal policy is that it will not pro-rate awards
for time. The Committee will determine whether or not to pro-rate
based on the circumstances of the Executive Director’s departure.
RSP for the
year of
cessation
The award will normally
be pro-rated for the
period worked during
the financial year.
No award for year
of cessation.
The Committee has the following elements of discretion:
•
To determine that an Executive Director is a good leaver. It is the
Committee’s intention to only use this discretion in circumstances
where there is an appropriate business case which will be explained
in full to shareholders.
•
To determine whether to pro-rate the Company award to time.
The Committee’s normal policy is that it will pro-rate for time.
It is the Committee’s intention to use discretion to not pro-rate in
circumstances where there is an appropriate business case which
will be explained in full to shareholders.
•
To determine whether the award will vest on the date of cessation
or the original vesting date. The Committee will make its
determination based, among other factors, on the reason for the
cessation of employment.
RSP
Awards will be
pro-rated to time and
will vest on their original
vesting dates and
remain subject to the
holding period.
Unvested awards will be
forfeited on cessation
of employment. Vested
awards will remain
subject to the holding
period.
The Committee has the following elements of discretion:
•
To determine that an Executive Director is a good leaver. It is the
Committee’s intention to only use this discretion in circumstances
where there is an appropriate business case which will be explained
in full to shareholders.
•
To determine whether to pro-rate the award to the date of cessation.
The Committee’s normal policy is that it will pro-rate. The Committee
will determine whether to pro-rate based on the circumstances of the
Executive Director’s departure.
•
To determine whether the awards vest on the date of cessation or the
original vesting date. The Committee will make its determination based,
among other factors, on the reason for the cessation of employment.
•
To determine whether the holding period for awards applies in part or
in full. The Committee will make its determination based, among other
factors, on the reason for the cessation of employment.
The following definition of leavers will apply to all of the above incentive plans.
A good leaver reason is defined as cessation in the following circumstances:
•
Death.
•
Ill-health.
•
Injury or disability.
•
Retirement.
•
Employing company ceasing to be a Group company.
•
Transfer of employment to a company which is not a Group company.
•
At the discretion of the Committee (as described above). The Committee retains the authority to exercise its discretion to determine good
leaver treatment separately in respect of each element of remuneration.
Cessation of employment in circumstances other than those set out above is cessation for other reasons.
Saga plc
Annual Report and Accounts 2026
104
Change of control policy
Name of incentive plan
Change of control
Discretion
Bonus cash
Pro-rated to time and performance to the date
of the change of control.
The Committee has discretion regarding whether
to pro-rate the bonus to time. The Committee’s
normal policy is that it will pro-rate the bonus for
time. It is the Committee’s intention to use its
discretion to not pro-rate in circumstances only
where there is an appropriate business case
which will be explained in full to shareholders.
Bonus deferred share awards
Subsisting deferred share awards will vest on
a change of control.
The Committee has discretion regarding whether
to pro-rate the award to time. The Committee’s
normal policy is that it will not pro-rate awards for
time. The Committee will make this determination
depending on the circumstances of the change
of control.
RSP
The number of shares subject to subsisting
RSPs will vest on a change of control pro-rated
for time and performance against any underpins.
The Committee has discretion regarding whether
to pro-rate the RSPs for time. The Committee’s
normal policy is that it will pro-rate the RSPs for
time. It is the Committee’s intention to use its
discretion to not pro-rate in circumstances only
where there is an appropriate business case
which will be explained in full to shareholders.
The Committee also has discretion to consider
attainment of any underpins.
Recruitment and promotion policy
The Company’s principle is that the remuneration of any new recruit will be assessed in line with the same principles as for the Executive
Directors, as set out in the Policy table. The Committee is mindful that it wishes to avoid paying more than it considers necessary to secure
a preferred candidate with the appropriate calibre and experience needed for the role. In setting the remuneration for new recruits, the
Committee will have regard to guidelines and shareholder sentiment regarding one-off or enhanced short-term or long-term incentive
payments, as well as giving consideration for the appropriateness of any performance measures associated with an award. The Company’s
policy when setting remuneration for the appointment of new Directors is summarised in the table below:
Remuneration element
Policy
Salary, benefits and pension
Salary and benefits will be set in line with the policy for existing Executive Directors. Maximum
pension contribution will be aligned with that of the majority of colleagues.
Annual Bonus Plan
Maximum annual participation will be set in line with the Company’s policy for existing Executive
Directors and will not exceed 150% of salary.
RSP
Maximum annual participation will be set in line with the Company’s policy for existing Executive
Directors and will not exceed 100% of salary.
Maximum variable remuneration
The maximum variable remuneration which may be granted is the sum of the annual bonus and RSP
(excluding the value of any buyouts).
Buyout of incentives forfeited on
cessation of employment
Forfeited on cessation of employment.
Where the Committee determines that the individual circumstances of recruitment justify the
provision of a buyout, the equivalent value of any incentives that will be forfeited on cessation of an
Executive Director’s previous employment will be calculated taking into account the following:
•
The proportion of the performance period completed on the date of the Executive Director’s
cessation of employment.
•
The performance conditions attached to the vesting of these incentives and the likelihood of them
being satisfied.
•
Any other terms and conditions having a material effect on their value (lapsed value). The Committee
may then grant up to the same value as the lapsed value, where possible, under the Company’s
incentive plans. To the extent that it was not possible, or practical, to provide the buyout within the
terms of the Company’s existing incentive plans, a bespoke arrangement would be used.
Relocation policies
In instances where the new Executive Director is required to relocate or spend significant time away
from their normal residence, the Company may provide one-off compensation to reflect the cost
of relocation for the Executive Director. The level of the relocation package will be assessed on a
case-by-case basis but will take into consideration any cost-of-living differences/housing allowance
and schooling, and will not exceed a period of two years from recruitment.
Where an existing colleague is promoted to the Board, the policy set out above would apply from the date of promotion but there would be
no retrospective application of the policy in relation to subsisting incentive awards or remuneration arrangements. Accordingly, prevailing
elements of the remuneration package for an existing colleague would be honoured and form part of the ongoing remuneration of the person
concerned. These would be disclosed to shareholders in the Directors’ Remuneration Report for the relevant financial year.
The Company’s policy, when setting fees for the appointment of a new Chairman or Non-Executive Director, is to apply the policy which applies
to current Non-Executive Directors.
Saga plc
Annual Report and Accounts 2026
105
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Remuneration Report
Directors’ Remuneration Policy
continued
Service contracts and letters of appointment
The Committee’s policy for setting notice periods is that normally they will be a maximum of 12 months. The Committee may, in exceptional
circumstances arising on recruitment, allow a longer period, which would in any event reduce to 12 months following the first year of employment.
The Non-Executive Directors of the Company do not have service contracts and are appointed by letters of appointment. Each independent
Non-Executive Director’s term of office runs for a three-year period.
The Company follows the UK Corporate Governance Code 2024 (the
Code
) recommendation that all Directors be subject to annual
re-appointment by shareholders.
Executive Director
Notice periods
Name
Date appointed
Nature of contract
From Company
From Director
Compensation provisions
for early termination
Mike Hazell
9 October 2023
Rolling
12 months
12 months
None
Mark Watkins
28 November 2023
Rolling
12 months
12 months
None
Non-Executive Director
Name
Original appointment
Appointment
of current term
Arrangement
Notice period/unexpired
term at AGM
Gareth Hoskin
11 March 2019
11 March 2025
Letter of appointment
3 months/20 months
Gemma Godfrey
1 September 2022
1 September 2025
Letter of appointment
3 months/26 months
Anand Aithal
1 September 2022
1 September 2025
Letter of appointment
3 months/26 months
The Board allows Executive Directors to accept appropriate outside non-executive director appointments provided the aggregate
commitment is compatible with their duties as Executive Directors. The Executive Directors concerned may retain fees paid for these services,
which will be subject to approval by the Board.
Choice of performance measures and targets
Annual Bonus Plan
Performance for the Annual Bonus Plan will be measured against financial and non-financial measures with respective targets for each measure
set by the Committee each financial year. The Policy provides the Committee with the flexibility to choose measures that are strongly linked to
the specific strategic and financial priorities in any given financial year.
For financial measures, the targets are set with reference to internal forecasts, external forecasts, and other circumstances, as appropriate,
to ensure that targets are suitably stretching and motivational to Executives.
Non-financial targets are set each financial year with reference to the key strategic objectives of the Company and are linked to the long-term
success of the business.
RSP
No specific performance conditions are required for the vesting of Restricted Shares but there will be an underpin in that the Committee will
have the discretion to adjust vesting taking into account business, individual and wider Company performance.
Consideration of employment conditions elsewhere in the Group
Each year, prior to reviewing the remuneration of the Executive Directors and the members of the Operating Board, the Committee considers
a report prepared by the Chief People Officer, detailing base pay and share scheme practices across the Company. The report provides an
overview of how colleague pay compares with the market, alongside any material changes during the year and includes detailed analysis of basic
pay and variable pay changes within the UK.
While the Company does not directly consult with colleagues as part of the process of reviewing executive pay and formulating the Policy, the
Company engages with colleagues via its People Committee, where the approach to Executive remuneration is also discussed. The Chair of the
Remuneration Committee is the Non-Executive Director nominated as ‘People Champion’. In addition, the Committee receives an update and
feedback from the broader colleague population on an annual basis using an engagement survey which includes a number of questions relating
to remuneration. The Company does not use remuneration comparison measurements.
The Group aims to provide a remuneration package for all colleagues that is market competitive and operates the same core structure as for
the Executive Directors. The Group operates colleague share and variable pay plans, with pension provisions provided for all Executive Directors
and colleagues. Any salary increases for Executive Directors are expected to be generally in line with those for UK-based colleagues. The Committee
annually publishes a section on fairness, diversity and wider workforce considerations as part of the Directors’ Remuneration Report.
Consideration of shareholder views
The Committee takes the views of the shareholders seriously and these views are taken into account in shaping remuneration policy and
practice. Shareholder views are considered when evaluating and setting remuneration strategy and the Committee welcomes an open dialogue
with its shareholders on all aspects of remuneration. The Committee consulted its major shareholders and the main shareholder representative
bodies prior to proposing this Policy. The Committee is grateful for the time taken to consider the Committee proposals and provide feedback.
At the end of the consultation, the majority of shareholders indicated they were supportive of this Policy.
Saga plc
Annual Report and Accounts 2026
106
Compliance with the Code
The following table sets out how the Policy aligns with the Code, whose objective is to ensure the remuneration operated by the Company is
aligned with all stakeholder interests, including those of shareholders:
Key remuneration element of the Code
Alignment with the Policy
Five-year period between the
date of grant and realisation for
equity incentives
The RSP meets this requirement through the implementation of the two-year post-vesting holding
period for the RSP.
Phased release of equity awards
The RSP meets this requirement as awards are made in an annual cycle.
Discretion to override formulaic
outcomes
Included in the terms and conditions of the Annual Bonus Plan and the RSP.
Post-cessation shareholding
requirement
The full in-employment requirement for two years following cessation of employment.
Pension alignment
The pension contribution for all Executive Directors is aligned with the majority of colleagues
at 6%.
Extended malus and clawback
The malus and clawback provisions align with the Financial Reporting Council’s Board
Effectiveness Guidance.
Gemma Godfrey
Chair, Remuneration Committee
20 April 2026
This report has been prepared in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 as amended in 2013, 2018 and 2019, the Provisions of the current Code and the UK Listing Rules.
Saga plc
Annual Report and Accounts 2026
107
Financial statements
Additional information
Governance
Strategic Report
Governance
Strategic Report
Directors’ Report
Management Report
The Directors’ Report, together with the Strategic Report set out on pages 1-57, form the Management Report for the purposes of Disclosure
Guidance and Transparency Rule (
DTR
) 4.1.5 R (the
Management Report
).
Statutory information contained elsewhere in the Annual Report and Accounts
Information required to be part of this Directors’ Report can be found elsewhere in the Annual Report and Accounts as indicated in the table
below and is incorporated into this report by reference.
Information
Location in Annual Report and Accounts
Likely future developments in the business of the Company or its subsidiaries
Pages 1-57
Environmental, Social and Governance, including Task Force on Climate-related Financial Disclosures
Pages 41-48
Greenhouse gas emissions
Pages 47-48
Suppliers, customers and others in a business relationship engagement
Pages 24-25
Colleagues (employment of disabled persons, workforce engagement and policies)
Pages 48 and 56
Corporate Governance Statement
Pages 58-79
Directors’ details (including changes made during the year)
Pages 60, 62-63 and 71-74
Related-party transactions
Note 40 on page 187
Diversity
Pages 48, 71 and 73-74
Board and executive diversity targets
Pages 48, 71 and 73-74
Share capital
Note 33 on page 178
Employee share schemes (including long-term incentive schemes)
Note 36 on pages 179-181
Financial instruments: information on the Group’s financial instruments and risk management
objectives and policies, including our policy for hedging
Notes 2, 3, 7, 8, 19 and 20 on pages
123-141, 144 and 154-164
Statements of responsibilities
Page 111
Additional information
Pages 194-200
Disclosure table pursuant to UK Listing Rule (
UKLR
) 6.6.1
The following table provides references to where the information required by UKLR 6.6.1 is disclosed:
UKLR
UKLR requirement
Disclosure
6.6.1(1)
Interest capitalised by the Group and any related tax relief
Note 17 on page 152
6.6.1(2)
Unaudited financial information (UKLR 6.2.23 R)
Group Chief Financial Officer’s Review, pages 26-40
6.6.1(3)
Long-term incentive schemes (UKLR 9.3.3 R)
Directors’ Remuneration Report, pages 80-107
6.6.1(4)
Directors’ waivers of emoluments
Directors’ Remuneration Report, pages 80-107
6.6.1(5)
Directors’ waivers of future emoluments
Directors’ Remuneration Report, pages 80-107
6.6.1(6)
Non-pre-emptive issues of equity for cash
Directors’ Report on page 110
6.6.1(7)
Non-pre-emptive issues of equity for cash by any unlisted
major subsidiary undertaking
Not applicable
6.6.1(8)
Parent company participation in a placing by a listed subsidiary
Not applicable
6.6.1(9)
Contract of significance in which a Director is, or was,
materially interested
Directors’ Report on page 109 and Note 40 on page 187
6.6.1(10)
Contract of significance between the Company
(or one of its subsidiaries) and a controlling shareholder
Not applicable
6.6.1(11)
Waiver of dividends by a shareholder
Directors’ Report on page 110
(under paragraph ‘Rights attaching to shares’)
6.6.1(12)
Waiver of future dividends by a shareholder
Directors’ Report on page 110
(under paragraph ‘Rights attaching to shares’)
6.6.1(13)
Board statement in respect of relationship agreement with a
controlling shareholder
Not applicable. See Directors’ Report on page 109
(under ‘Relationship agreement with Director shareholder’)
Results and dividends
The Group made a profit after taxation of £3.6m for the financial year
ended 31 January 2026. The Board did not pay an interim dividend.
The Board of Directors is not in a position to recommend the payment
of a final dividend for the 2025/26 financial year.
The Directors intend to resume dividend payments in the future, once
further progress has been made with deleveraging and when current
limitations, particularly in relation to the Ocean Cruise ship debt, have
been removed.
Any decision to declare and pay dividends is made at the discretion
of the Directors and depends on, among other things, applicable law,
regulation, restrictions, the Group’s financial position, regulatory
capital requirements, working capital requirements, finance costs,
general economic conditions and other factors the Directors deem
significant from time to time.
Political donations
No political donations were made during the year.
Saga plc
Annual Report and Accounts 2026
108
Directors’ interests
A list of the Directors, their interests in the long-term performance
share plan, contracts and ordinary share capital of the Company are
given in the Directors’ Remuneration Report on pages 80-107.
Agreements with Director shareholder
The Board confirms that, in accordance with UKLR 6.2.3, there are
no controlling shareholders in the Company. However, the Company
entered into a relationship agreement with Roger De Haan on
10 September 2020 (the
Relationship Agreement
) as Roger De Haan
directly holds 39,876,355 shares of 15p each
1
(constituting 27.53% of
issued share capital at 31 January 2026). This is considered a contract
of significance in accordance with UKLR 6.6.1(9). The Relationship
Agreement regulates the relationship between the Company and
Roger De Haan and contains undertakings that transactions and
arrangements will be conducted on an arm’s-length basis and on
normal commercial terms. It also provides that dilutions caused by
new issuances of shares shall be disregarded when determining
investor rights under its terms.
The Group entered into an unsecured loan facility with Roger De Haan
on 3 April 2023. This facility, which was provided on an arm’s-length
basis and on normal commercial terms, remained in place until the
successful refinancing of the Group’s corporate debt. Following
completion of the new credit facilities, the £75.0m drawn amount
was fully repaid and the facility was cancelled on 27 February 2025.
Further information is provided in Note 40 on page 187.
Rules on appointment and replacement of Directors
A Director may be appointed by ordinary resolution of the
shareholders in a general meeting following nomination by the
Board or a member (or members) entitled to vote at such a meeting.
In addition, the Directors may appoint a Director to fill a vacancy,
or as an additional Director, provided that the individual retires at
the next Annual General Meeting (
AGM
). A Director may be removed
by the Company in certain circumstances set out in the Company’s
Articles of Association or by an ordinary resolution of the Company.
The Relationship Agreement between the Company and
Roger De Haan provides for the nomination for appointment
(and removal or re-nomination) to the Board of one Non-Executive
Director for as long as he holds at least the higher of:
•
10% or more of the issued ordinary share capital of the Company;
and
•
the percentage of the issued ordinary share capital of the Company,
represented by 60% of the investor’s holding of ordinary shares
immediately following the capital raise, which took place in
October 2020.
All Directors will seek re-election at the AGM in accordance with the
Company’s Articles of Association and the recommendations of the
UK Corporate Governance Code 2024.
Directors’ indemnities
At the date of this report, indemnities are in force, under which the
Company has agreed to indemnify the Directors, to the extent
permitted by law and the Company’s Articles of Association, in
respect of all losses arising out of, or in connection with, the execution
of their powers, duties and responsibilities, as Directors of the
Company or any of its subsidiaries.
No amount was paid under any of these indemnities during the year.
Directors’ and officers’ liability insurance is in place at the date of
this report, at an amount which the Board considers adequate.
This is subject to annual review.
Change of control – significant agreements
There are some arrangements which give rights to third parties
to terminate agreements upon a change of control of the Company,
including following a takeover, for example, commercial contracts
and insurance distribution agreements. Details of such arrangements
are captured as part of the contractual governance process.
At 31 January 2026, the Group’s corporate debt, which was secured in
February 2025, comprised a £335.0m term loan facility and a £116.6m
delayed-draw term loan facility, of which £100.0m is available to fund
Ocean Cruise ship debt amortisation or capital investment, with the
remaining £16.6m available for general corporate purposes. The
Group also secured a new £33.4m Revolving Credit Facility, which can
be used for general corporate purposes.
Export Credit Agency-backed funding is in place over 12 years to
finance 80% of the cost of the Group’s two Ocean Cruise ships at a
fixed interest rate. The first of these facilities was drawn on completion
of the build of Spirit of Discovery and secured by way of a charge over
the asset. The second facility was drawn on completion of the build of
Spirit of Adventure and also secured by way of a charge over the asset.
The Company provided a guarantee for this ship debt.
In the event of a change of control, the facilities would either require
repayment or renegotiation. If the ship financing was terminated,
significant break fees may be incurred. Further details on banking
facilities are shown in Note 30 to the consolidated financial
statements on pages 174-176.
The rules of the Company’s colleague share plans generally provide
for the accelerated vesting and/or release of share awards in the event
of a change of control of the Company.
The Company does not have any agreements with colleagues,
including Directors, which would pay compensation in the event of a
change of control.
Conflict of interest
Each Director is obliged to disclose any potential, or actual, conflict of
interest in accordance with the Company’s Conflict of Interest Policy.
The policy is subject to review and declarations are made on an annual
basis. Directors are also required to update any changes to declarations
as they occur. Internal controls are in place to ensure that any
related-party transactions are conducted on an arm’s-length basis.
Share capital and interests in voting rights
The Company’s share capital, including movements during the year, is
set out on page 178. At the date of this report, the Company’s issued
share capital comprised a single class of share capital, which is divided
into ordinary shares of 15p each. At 31 January 2026, 144,855,485
ordinary shares of 15p each had been issued, fully paid up and quoted
on the London Stock Exchange (
LSE
).
In accordance with DTR 5.1, the Company must disclose where it has
been notified of the interests in the Company’s total voting rights.
The obligation to notify sits with the shareholder, and the Company
must report on the notifications received, between the end of the
reporting year and a date not more than one month prior to the date
of the notice of AGM. If the date of signing of the Annual Report and
Accounts is prior to this, we will include an updated position in our
AGM Notice (
Notice
).
Since the date of disclosure to the Company, the interest of any
person may have increased or decreased. There is no requirement
to notify the Company of any increase or decrease unless the holding
passes a notifiable threshold in accordance with DTR 5.1.
Information regarding other interests in voting rights provided to the
Company, pursuant to the Financial Conduct Authority DTRs, is
published on the Company’s corporate website and via a Regulatory
Information Service.
During the year, the following notifications were received:
Name
Ordinary
shares of 15p
each
Percentage
of capital as
disclosed to
the Company
Nature of
holding
Eldose Babu
Roger De Haan
2
13,163,101
39,876,355
9.18
27.53
Indirect
Indirect
1
This shareholding represents shares directly held by Roger De Haan. His shareholding, including that of his connected persons, is set out on page 91 of the Directors’
Remuneration Report
2
This disclosure relating to Roger De Haan is the latest disclosure announced on 30 September 2025. An additional disclosure was announced on 11 April 2025
Saga plc
Annual Report and Accounts 2026
109
Financial statements
Additional information
Governance
Strategic Report
Directors’ Report
continued
Authority to allot/purchase own shares
A shareholders’ resolution was passed at the AGM on 24 June 2025,
authorising the Company to make market purchases within the
meaning of Section 693(4) of the Companies Act 2006 (the
Act
)
(up to £2,150,426.11, representing 10% of the aggregate nominal
issued share capital of the Company). This is subject to a minimum
price of 15p and a maximum price of the higher of 105% of the average
mid-market quotations for five business days prior to purchase or the
price of the last individual trade and highest current individual bid as
derived from the LSE trading system.
The Company did not exercise this authority during the year, and it will
expire at the forthcoming AGM. A special resolution to authorise the
Company to make market purchases representing 10% of current
nominal share capital will be proposed at the 2026 AGM.
The Directors of the Company were also granted authority at the
2025 AGM to allot relevant securities up to a nominal amount of
£7,160,918.96. This authority was not exercised during the year.
This authority will apply until the conclusion of the 2026 AGM, at
which shareholders will be asked to grant the Directors authority
(for the purposes of Section 551 of the Act) to allot relevant securities:
•
up to an aggregate nominal amount of 33.3% of the Company’s
issued ordinary share capital; and
•
comprising equity securities (as defined in the Act) up to an
aggregate nominal amount of 66.6% of the Company’s issued
ordinary share capital (after deducting from such limit any relevant
securities issued under (i) in connection with a rights issue).
These amounts will apply until the conclusion of the 2027 AGM, or,
if earlier, 31 July 2027.
Special resolutions will also be proposed to give the Directors
authority to make non-pre-emptive issues wholly for cash in
connection with rights issues and otherwise up to an aggregate
nominal amount of 10% of the Company’s issued ordinary share
capital, and to make non-pre-emptive issues wholly for cash in
connection with acquisitions or specified capital investments up to
an aggregate amount of 10% of the Company’s issued ordinary share
capital. This is consistent with the Pre-Emption Group’s published
Statement of Principles.
Rights attaching to shares
The Company has a single class of ordinary shares in issue. The rights
attached to the shares are governed by applicable law and the
Company’s Articles of Association, which are available on our
corporate website (www.corporate.saga.co.uk/about-us/governance).
Ordinary shareholders have the right to receive notice, attend and
vote at general meetings, and to receive a copy of the Company’s
Annual Report and Accounts and a dividend when approved and paid.
On a show of hands, each shareholder present in person, or by proxy
(or an authorised representative of a corporate shareholder), shall
have one vote. In the event of a poll, one vote is attached to each share
held. No shareholder owns shares with special rights as to control.
The Notice will state the deadlines for exercising voting rights and
for appointing a proxy or proxies.
The Saga Employee Benefit Trust (the
Trust
) is an Employee Benefit
Trust which holds property (the
Trust Fund
), including inter-alia
money, and ordinary shares in the Company, in trust in favour, or for
the benefit, of colleagues of the Saga Group.
The Trustee of the Trust has the power to exercise the rights and
powers incidental, and to act in relation to the Trust Fund in such
manner as the Trustee, in its absolute discretion, thinks fit. The
Trustee has waived its rights to dividends on ordinary shares held by
the Trust. Details of employee share schemes are set out in Note 36
to the consolidated financial statements.
Restrictions on the transfer of shares
The Company is not aware of any agreement that would result in a
restriction on the transfer of shares or voting rights.
Articles of Association
Any amendment to the Company’s Articles of Association may only
be made by passing a special resolution of the shareholders of the
Company. The Company last approved its Articles of Association
by special resolution at the AGM held on 14 June 2021.
Research and development
The Group does not undertake any material activities in the field
of research and development.
Branches outside the UK
The Company does not have any branches outside the UK.
Post-balance sheet events
There have been no post balance sheet events since year end.
Auditor
KPMG LLP confirmed its willingness to continue in office as auditor
of the Company, and resolutions for its re-appointment, and for the
Audit Committee to determine its remuneration, will be proposed
at the forthcoming AGM.
Annual General Meeting
The AGM will be held on 30 June 2026 at 11.00am at the offices
of Herbert Smith Freehills Kramer LLP, Exchange House,
Primrose Street, London, EC2A 2EG. The Notice will be available on
our corporate website (www.corporate.saga.co.uk) in due course.
By order of the Board
Victoria Haynes
Group Company Secretary
20 April 2026
Saga plc (Company no. 08804263)
Saga plc
Annual Report and Accounts 2026
110
Statements of responsibilities
Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and
Accounts, and the Group and parent company financial statements,
in accordance with applicable laws and regulations.
Company law requires the Directors to prepare Group and parent
company financial statements for each financial year. Under that law,
they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards
and in conformity with the requirements of the Companies Act 2006
(the
Act
), and have elected to prepare the parent company financial
statements in accordance with UK accounting standards, including
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’.
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 Group, and parent company, and of their
profit or loss for that period (see governance statements on page 59).
In preparing each of the Group and parent company financial
statements, the Directors are required to:
•
select suitable accounting policies and then apply them
consistently;
•
make judgements and estimates that are reasonable, relevant,
reliable and prudent;
•
for the Group financial statements, state whether they have been
prepared in accordance with UK-adopted international accounting
standards;
•
for the parent company financial statements, state whether
applicable UK accounting standards have been followed, subject to
any material departures having been disclosed and explained in the
parent company financial statements;
•
assess the Group and parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern; and
•
use the going concern basis of accounting, unless they either intend
to liquidate the Group or the parent company, or to cease
operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent company’s
transactions and disclose with reasonable accuracy at any time, the
financial position of the parent company and enable them to ensure
that its financial statements comply with the Act. They are also
responsible for such internal controls as they determine 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 Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that comply with that law and those regulations.
Disclosure of information to the auditor
Having made the requisite enquiries, so far as each of the Directors
is aware, there is no relevant audit information (as defined by Section
418(3) of the Act) of which the Company’s auditor is unaware, and the
Directors have taken all the steps they ought to have taken to make
themselves aware of any relevant audit information and to ensure that
the Company’s auditor is aware of that information.
Maintenance of website and single
electronic reporting
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the UK, governing the preparation and
dissemination of financial statements, may differ from legislation
in other jurisdictions.
The financial statements will form part of the annual financial report
prepared using the single electronic reporting format under the
Transparency Directive European Single Electronic Format (
ESEF
)
Regulation. The auditor’s report on these financial statements
provides no assurance over the ESEF format.
Directors’ responsibility statement
Each of the Directors who were in office at the date of this report,
whose names and responsibilities are listed on pages 62-63, confirm
that, to the best of their knowledge:
•
the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken
as a whole; and
•
the Management Report, as defined in the Directors’ Report,
includes a fair review of the development and performance of
the business and the position of the issuer, and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
The Directors consider the Annual Report and Accounts, taken as
a whole, to be fair, balanced and understandable and provide the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
By order of the Board
Victoria Haynes
Group Company Secretary
20 April 2026
Saga plc (Company no. 08804263)
Saga plc
Annual Report and Accounts 2026
111
Financial statements
Additional information
Governance
Strategic Report
Independent Auditor’s Report to the Members of Saga plc
1 Our opinion is unmodified
We have audited the financial statements of Saga plc (the
Company
or
Group
) for the year ended 31 January 2026, which comprise the
consolidated income statement, consolidated statement of
comprehensive income, consolidated statement of financial position,
consolidated statement of changes in equity, consolidated statement
of cash flows, Company balance sheet, Company statement of
changes in equity and the related notes, including the accounting
policies in Note 2.3 to the financial statements and Note 1.1 to the
Company financial statements.
In our opinion:
•
the financial statements give a true and fair view of the state of the
Group’s and of the parent company’s affairs as at 31 January 2026
and of the Group’s profit for the year then ended;
•
the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
•
the parent company financial statements have been properly
prepared in accordance with UK accounting standards, including
Financial Reporting Standard (
FRS
) 101
Reduced Disclosure
Framework
; and
•
the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
2 Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had
the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
We summarise below the key audit matters (unchanged from 2025 other than the exclusion of a key audit matter relating to valuation of the
liability and reinsurance for incurred claims), in decreasing order of audit significance, in arriving at our audit opinion above, together with our
key audit procedures to address those matters and our findings from those procedures in order that the Company’s members, as a body,
may better understand the process by which we arrived at our audit opinion. These matters were addressed, and our results are based on
procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion
thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
Area
The risk
Our response
Recoverability
of goodwill
Goodwill: £206.4m,
(2025: £206.4m)
Impairment of
goodwill: £nil
(2025: £138.3m)
Refer to pages 75-79
(Audit and Risk
Committee Report),
Note 2.3h on page 127
(accounting policies)
and Note 16 on
pages 150-151
(financial disclosures)
in the annual report
and accounts.
Forecast-based assessment:
Insurance Broking goodwill recognised by the Group
is significant and is subject to impairment risk if
actual business performance were to fall short of
forecasts, particularly in an environment of
compressed margins arising.
The recoverable amount of goodwill is assessed
using a value in use (
VIU
) model, based on forecast
discounted cash flows derived from the 20-year
motor and home partnership with Ageas
1
(
Affinity
Partnership
) that commenced in December 2025.
The assessment involves a high degree of judgement
and estimation uncertainty, as it relies on
management’s expectations of future performance
and the successful delivery of forecast cash flows
under the Affinity Partnership arrangement with a
third-party insurer.
The VIU model is most sensitive to assumptions
relating to projected future operating cash flows.
A shortfall in forecast performance could result
in a material reduction in headroom. Other key
assumptions, including the pre-tax discount rate
and terminal growth rate, are inherently subjective;
however, changes in these assumptions are not
individually significant in isolation. The impairment
assessment becomes more sensitive where adverse
movements in the discount rate and terminal growth
rate occur in combination, amplifying the impact of
any under-performance in forecast cash flows.
We performed the tests below rather than seeking to rely
on any of the Group’s controls because the estimation
uncertainty involved in the nature of the balance is such that
we would expect to obtain audit evidence primarily through
the detailed procedures described.
Our procedures included:
Historical comparisons
•
We assessed the reasonableness of cash flow projections
in view of the terms of the Affinity Partnership agreement
against historical performance.
Our sector experience
•
We evaluated and challenged the assumptions used in cash
flow forecasts using our sector knowledge and experience.
Benchmarking assumptions
•
We compared the Group’s assumptions to externally derived
data in relation to key inputs, such as pre-tax discount rates,
with the support of our valuation specialists and terminal
growth rates.
Comparing valuations
•
We compared the recoverable amount of the Insurance
business cash generating unit (
CGU
) by reference to the VIU
relative to the carrying value and evaluated the outcome
against comparator industry multiples.
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 believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion. Our audit
opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on
22 June 2017. The period of total uninterrupted engagement is for
the nine financial years ended 31 January 2026. We have fulfilled
our ethical responsibilities under, and we remain independent of the
Group in accordance with, UK ethical requirements including the
Financial Reporting Council (
FRC
) Ethical Standard as applied to listed
public interest entities. No non-audit services prohibited by that
standard were provided.
Overview
Materiality:
Group
financial statements
as a whole
£4.5m (2025: £6.2m)
0.68% of 2026 revenue
(2025: 1.05% of revenue)
Coverage
97% (2025: 97%) of total revenue
Key audit matter
vs. 2025
Recurring risks
Recoverability of goodwill
Recoverability of the parent company’s
investment in subsidiaries
1
Wholly owned UK subsidiaries of Ageas SA/NV
Saga plc
Annual Report and Accounts 2026
112
Area
The risk
Our response
Estimation uncertainty is further heightened by the
relatively short period of trading history under the
Affinity Partnership prior to the year end, which limits
the availability of historical evidence to support
management’s forecasts.
As a result of these factors, there is a risk that
Insurance Broking goodwill may be impaired,
particularly if the Group fails to achieve its forecast
performance for 2026/27 and subsequent periods.
Accordingly, as part of our risk assessment, we
determined that the valuation of goodwill involves
a high degree of estimation uncertainty, with a
reasonably possible range of outcomes that could
exceed materiality for the financial statements as
a whole, and potentially by a significant margin.
Assessing transparency
•
We assessed whether the Group disclosures about the
sensitivity of the outcome of the impairment assessment to
changes in key assumptions reflects the risks inherent in the
valuation of goodwill.
Our findings:
We found the Group’s estimated recoverable
amount of goodwill to be balanced (2025 finding: balanced),
with proportionate (2025 finding: proportionate) disclosure
of the related assumptions and sensitivities
Recoverability of the
parent company’s
investment in
subsidiaries
Company’s
investment in
subsidiaries: £840.4m
(2025: £659.3m)
Impairment reversed
in the year: £181.1m
(2025: £492.0m)
Refer to pages 75-79
(Audit and Risk
Committee Report),
Note 1.1 on page 190
(accounting policies)
and Note 2 on
pages 192-193
(financial disclosures)
in the annual report
and accounts.
Forecast-based assessment:
The parent company has a single direct subsidiary
but indirectly owns all entities within the Group.
The carrying amount of the parent company’s
investment in subsidiaries is significant and has
been impaired in prior years. As a result, the balance
remains sensitive to changes in forecast business
performance across the Group’s business units.
The recoverable amount of the parent company’s
investment in subsidiaries is subject to significant
judgement, as it is dependent on forecast future
performance and valuation assumptions applied
to those forecasts. In particular, the assessment
is most sensitive to the EV/EBITDA multiple applied
for Travel CGU, which has a direct impact on the
estimated enterprise value of the Group and
therefore on the headroom supporting the carrying
value of the investment.
For the insurance broking business specifically,
the underlying forecasts are most sensitive to
assumptions relating to future operating cash flows.
While other assumptions, including discount rates
and terminal growth rates, are inherently
judgemental, they are not individually significant
drivers of valuation outcomes. However, the overall
estimation uncertainty increases where adverse
movements in these assumptions occur alongside
under-performance against forecast operating
cash flows.
Uncertainty in the broader economic outlook,
including geo-political factors and their impact on
the Group’s Travel businesses, further heightens
estimation uncertainty. As a result, there is a risk
of further impairment or reversal of previously
recognised impairments at the parent company
level if actual performance is materially different
from plan in 2026/27 and subsequent periods.
Accordingly, as part of our risk assessment,
we determined that the valuation of the parent
company’s investment in subsidiaries involves a high
degree of estimation uncertainty, with a reasonably
possible range of outcomes that could exceed
materiality for the financial statements as a whole,
and potentially by a significant margin.
We performed the tests below rather than seeking to rely on
any of the Group’s controls because the estimation uncertainty
involved in the nature of the balance is such that we would
expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures included:
Historical comparisons
•
We assessed the reasonableness of cash flow projections
against historical performance.
Our sector experience
•
We evaluated and challenged the assumptions used in cash
flow forecasts using our sector knowledge and experience.
Benchmarking assumptions
•
We compared the parent company’s assumptions to
externally derived data in relation to key inputs, such as
pre-tax discount rates for the Insurance Broking CGU and
EV/EBITDA multiple for the Travel CGU, with the support
of our valuation specialists, with terminal growth rates
assessed independently.
Comparing valuations
•
For the parent company’s investment in subsidiaries, we
compared the sum of the VIUs or fair value less costs to sell
for all of the Group’s CGUs to the carrying value, market
capitalisation and implied multiples of the Group’s businesses;
and evaluated reasons for any significant differences.
Sensitivity analysis
•
We evaluated the recoverable amount of the parent
company’s investment in subsidiaries, including sensitivity
analysis over key valuation assumptions such as EV/EBITDA
multiples, forecast cash flows, pre-tax discount rates and
terminal growth rates. While the reversal of impairment
results in nil headroom, we concluded that the carrying value
does not exceed the recoverable amount and that the
reversal is appropriate.
Assessing transparency
•
We assessed the adequacy of the parent company’s
disclosures in respect of the investment in subsidiaries.
Our findings:
We found the Group’s estimated recoverable
amount of the parent company’s investment in subsidiaries
and the related reversal of impairment to be balanced
(2025 finding: balanced), with proportionate (2025 finding:
proportionate) disclosure of the related assumptions and
sensitivities.
Further to the announcement made on 16 December 2024, the Group completed the disposal of its Insurance Underwriting subsidiary,
Acromas Insurance Company Limited, to Ageas
2
on 1 July 2025, following satisfaction of the relevant conditions. As a result of this disposal, the
Group no longer retains underwriting risk associated with insurance liabilities, including the valuation of the liability and reinsurance for incurred
claims. Accordingly, this area was not considered to represent one of the most significant risks in the current year audit and has, therefore, not
been separately identified as a Key Audit Matter in the current year auditor’s report.
2
Wholly owned UK subsidiaries of Ageas SA/NV
Saga plc
Annual Report and Accounts 2026
113
Financial statements
Additional information
Governance
Strategic Report
Independent Auditor’s Report to the Members of Saga plc
continued
3 Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at
£4.5m (2025: £6.2m), determined with reference to a benchmark of
total revenue, of which it represents 0.68% (2025: 1.05%).
Overview of the scope of our audit
We performed risk assessment procedures to determine which of the Group’s components are likely to include risks of material misstatement
to the Group financial statements and which procedures to perform at these components to address those risks.
In total, we identified 13 components (2025: 13), having considered our evaluation of the Group’s operational structure, the existence of common
information systems, the existence of common risk profile across entities and our ability to perform audit procedures centrally. Of those, we
identified three quantitatively significant components (2025: four), which contained the largest percentages of either total revenue or total
assets of the Group, for which we performed audit procedures. Additionally, having considered qualitative and quantitative factors, we selected
two components (2025: one) with accounts and/or disclosures contributing to the specific risks of material misstatement of the Group financial
statements.
The below summarises where we performed audit procedures:
Component type
Number of components where we
performed audit procedures
Range of materiality applied
2026
2025
2026
2025
Quantitatively significant components
3
4
£2.3m - £1.4m
£2.9m - £1.8m
Other components where we performed procedures
3
1
£1.4m - £1.1m
£1.7m
Total
6
5
We involved component auditors in performing the audit work on three components (2025: three). We set the component materialities having
regard to the mix of size and risk profile of the Group across the components. We also performed the audit of the parent company.
Our audit procedures covered 97% of Group revenue (2025: 97%). We performed audit procedures in relation to components that accounted
for 96% of Group total assets (2025: 96%).
For the remaining components for which we performed no audit procedures, no component represented more than 2% of Group total revenue
(2025: 2%). We performed analysis at an aggregated Group level to re-examine our assessment that there is not a reasonable possibility of a
material misstatement in these components.
With the assistance of our IT auditors, we obtained an understanding of the main IT systems relevant to our Group audit. The Group’s control
environment is undergoing improvement, including the recent upgrade of the general ledger in November 2025. As such, our planned audit
approach was to rely only on relevant general IT controls at the Group level but not for the audits of the components.
Following our testing, including performing additional risk assessment procedures in response to deficiencies identified, we were able to rely on
general IT controls and automated controls at the Group level in determining the work to be performed over certain consolidation processes.
As we did not rely on controls over the component IT systems, we performed additional testing over the completeness and accuracy of
information extracted from the systems used in our audit. We also concluded that substantive audit procedures in most areas of our audit, such
as revenue-to-cash matching, would produce relevant audit evidence in a more efficient way and, therefore, our audit was largely substantive.
The control deficiencies in relation to manual journal entries under the previous general ledger were identified and therefore we were not able to
rely on controls in this area. Following incremental risk assessment, we determined that no significant changes were required to our planned
approach to journal testing.
Overall, considering the developing nature of the control environment and the most efficient and effective approach for gaining the appropriate
audit evidence, we concluded that a largely substantive audit approach was appropriate for the audit of the year ended 31 January 2026 for
significant risk areas and the key transactional processes.
Total revenue
£4.5m
Whole financial statements materiality
(2025: £6.2m)
£0.2m:
Misstatements reported to the Audit
and Risk Committee (2025: £0.3m)
£660.0m
(2025: £588.3m)
Group materiality
£4.5m
(2025: £6.2m)
Total Revenue
Group Materiality
Whole financial statements performance
materiality
£2.9m
(2025: £4.0m)
Number of components:
6
(2025: 5)
Range of performance materiality:
£1.1m - £2.3m
(2025: £1.7m - £2.9m)
Materiality for the parent company financial statements as a whole
was set at £3.2m (2025: £4.4m), determined with reference to a
benchmark of net assets of which it represents 0.3% (2025: 0.6%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable
level the risk that individually immaterial misstatements in individual
account balances add up to a material amount across the financial
statements as a whole.
Performance materiality was set at 65% (2025: 65%) and 65%
(2025: 75%) of materiality for the financial statements as a whole for
the Group and the parent company respectively. This equates to
£2.9m (2025: £4.0m) and £2.1m (2025: £3.3m) for the Group and the
parent company respectively. We applied this percentage in our
determination of performance materiality based on impact of the
number of control deficiencies identified during the prior period.
We agreed to report to the Audit and Risk Committee any corrected
or uncorrected identified misstatements exceeding £0.2m
(2025: £0.3m), in addition to other identified misstatements that
warranted reporting on qualitative grounds.
Saga plc
Annual Report and Accounts 2026
114
4 Going concern
The Directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations and as they have concluded that
the Group’s and 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 their ability
to continue as a going concern for at least 12 months from the date
of approval of the financial statements (the
going concern period
).
We used our knowledge of the Group, its industry and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and
Company’s financial resources or ability to continue operations
over the going concern period. The risks that we considered most
likely to adversely affect the Group’s and Company’s available
financial resources and metrics relevant to debt covenants over
this period were:
•
a sustained downturn in trading performance across the Cruise
and Travel businesses, including reduced load factors, lower per
diems and weaker customer demand, which could adversely impact
cash generation and liquidity headroom;
•
execution risk associated with the transition to the Affinity
Partnership model with Ageas in Insurance Broking, including the
risk that planned partnership benefits are delayed or not fully
realised, alongside increased operating cost pressures;
•
a significant operational disruption, including a cyber-related
incident, affecting Cruise operations and Insurance, resulting in lost
revenue, remediation costs, fines or customer compensation; and
•
increased collateral or bonding requirements, including higher
ABTA bonding and merchant acquirer cash collateral demands,
which could restrict available liquidity.
We also considered less predictable but realistic second order
impacts, such as such as adverse changes in UK Government policy
and the economic environment, which could result in a rapid reduction
of available financial resources.
We considered whether these risks could plausibly affect the liquidity
and covenant compliance in the going concern period by assessing the
Directors’ sensitivities over the level of available financial resources
and covenant thresholds indicated by the Group’s financial forecasts
taking account of severe, but plausible adverse effects that could arise
from these risks individually and collectively.
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 Group’s or Company’s ability to continue as a going
concern for the going concern period.
•
We have nothing material to add or draw attention to in relation to
the Directors’ statement in Note 2.1 to the financial statements on
the use of the going concern basis of accounting, with no material
uncertainties that may cast significant doubt over the Group and
Company’s use of that basis for the going concern period, and we
found the going concern disclosure in Note 1.1 to be acceptable.
•
The related statement under the UK Listing Rules set out on
page 59 is materially consistent with the financial statements and
our audit knowledge.
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 Group or the Company
will continue in operation.
5 The impact of climate change on our audit
In planning our audit, we have considered the potential impact of
risks arising from climate change on the Group’s business and its
financial statements.
As part of our audit, we performed a risk assessment, including
making enquiries of management, to understand how the impact
of commitments made by the Group in respect of reducing carbon
emissions, as well as the physical risks of climate change, and transition
risks faced by the Group, could impact on the financial statements
and our audit. Through the procedures we performed, we did not
identify any significant impact of climate change on the Group’s
material accounting estimates and there was no significant impact
of this assessment on our key audit matters for the year ended
31 January 2026.
The Cruise business within the Group owns cruise ship assets which
meet all current regulatory standards regarding emissions and
climate change targets. While there will likely be technology advances
in years to come that, when developed, will require the Group to look
to incur incremental costs to modify the engines on these cruise ships
to meet lower emissions standards, the cost to incur such changes
would likely extend the operating life of these vessels. Given this and
the fact that this technology is yet to be developed, we assessed the
risk of climate change to the carrying amount of the cruise ship assets
at the balance sheet date to be not significant.
The Insurance business within the Group operates as an insurance
intermediary, predominantly broking motor and home insurance
products on behalf of third-party insurers, and does not assume
underwriting or reserving risk. Climate change may influence claims
experience and pricing within the wider insurance market; however,
given the Group’s broking model and the short-term nature of the
policies brokered, there was no direct impact on the Group’s financial
statements at the balance sheet date. Climate risk is expected to
evolve over the medium to long term and accordingly we assessed no
significant impact at year-end on insurance goodwill, which relates to
the Group’s insurance broking activities.
We have also read the disclosures of climate related information in the
front half of the Annual Report and Accounts as set out on pages 41-48
and considered consistency with the financial statements and our
audit knowledge. We have not been engaged to provide assurance
over the accuracy of these disclosures.
6 Fraud and breaches of laws and
regulations – ability to detect
Identifying and responding to risks of material
misstatement due to fraud
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 the following:
•
Making enquiries of the Directors, the Audit and Risk Committee,
and the Internal Audit and Assurance Director and reviewing key
policies and papers provided to those charged with governance.
This was undertaken to understand the Group’s high-level fraud
prevention and detection policies and procedures, including the
whistleblowing mechanisms and the process for engaging local
management to identify fraud risks specific to individual business
units. We also enquired whether they were aware of any actual,
suspected or alleged fraud.
•
Reading Board and Audit and Risk Committee minutes. For Group
Audit and Risk Committee meetings, the external audit partner
attended to support our understanding of governance matters
relevant to the audit.
•
Considering remuneration structures, incentive schemes and
performance targets applicable to Directors and senior
management.
•
Performing analytical procedures to identify unusual or unexpected
trends or relationships.
•
Reviewing broker reports and other publicly available information
to identify third-party expectations and potential areas of concern.
Saga plc
Annual Report and Accounts 2026
115
Financial statements
Additional information
Governance
Strategic Report
Independent Auditor’s Report to the Members of Saga plc
continued
We communicated the identified fraud risks throughout the audit
team and maintained an ongoing awareness of potential indicators
of fraud. This included communication from the Group audit team
to component teams regarding relevant fraud risks identified at
Group level and requests for component teams to report any fraud
instances that could result in a material misstatement at Group level.
As required by auditing standards, and taking into account possible
pressures to meet profit targets, we performed procedures to
address the risk of management override of controls, in particular the
risk that the Group or component management may be in a position
to make inappropriate accounting entries. For this audit, we do not
believe there is a fraud risk related to revenue recognition, as revenue
is straightforward in nature and does not involve significant judgement
or estimation.
When determining the procedures to address identified fraud risks,
we considered the results of our evaluation and testing of the
operating effectiveness of the Group’s fraud risk management
controls.
We also performed procedures including:
•
identifying and testing journal entries across all in-scope
components based on risk criteria. This included entries posted by
senior management, entries containing specific high-risk keywords,
postings to unusual accounts, end-of-period or post-closing
adjustments with limited descriptions and unusual journal entries
affecting cash, revenue, or borrowings. Supporting documentation
for each selected entry was obtained and evaluated; and
•
evaluated the business purpose of significant unusual transactions.
Identifying and responding to risks of material
misstatement due to non-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 from inspection of the Group’s regulatory
and legal correspondence and discussed with the Directors and other
members of management the policies and procedures regarding
compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our
team and remained alert to any indications of non-compliance
throughout the audit. This included communication from the Group
auditor to component auditors of relevant laws and regulations
identified at the Group level and a request for component auditors
to report to the Group team any instances of non-compliance with
laws and regulations that could give rise to a material misstatement
at Group.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect
the financial statements including financial reporting legislation
(including related companies’ legislation), distributable profits
legislation, taxation legislation and pension 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 Group 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 or the loss of
the Group’s license to operate. We identified the following areas
as those most likely to have such an effect: regulatory capital,
regulatory compliance and liquidity and certain aspects of company
legislation, recognising the financial and regulated nature of the
Group’s activities and its legal form, with the Insurance business
regulated primarily by the Financial Conduct Authority and the
Gibraltar Financial Services Commission and the Cruise and the
Holidays businesses regulated by the Civil Aviation Authority.
The Cruise and Holidays businesses are also members of the
Association of British Travel Agents, the International Air Transport
Association and the Federation of Tour Operators. These are
well-recognised UK trade bodies with codes of conduct to which
members are required to adhere. 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 is 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 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 fraud 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.
7 We have nothing to report on the other
information in the Annual Report
The Directors are responsible for the other information presented in
the Annual Report together with the financial statements. Our opinion
on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information 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 other
information.
Strategic Report and Directors’ Report
Based solely on our work on the other information:
•
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.
Directors’ Remuneration Report
In our opinion, the part of the Directors’ Remuneration Report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify whether there is a
material inconsistency between the Directors’ disclosures in respect
of emerging and principal risks and the Viability Statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
•
the Directors’ confirmation within the Viability Statement on
page 55 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that
would threaten its business model, future performance, solvency
and liquidity;
Saga plc
Annual Report and Accounts 2026
116
•
the principal risks and uncertainties disclosures describing these
risks and how emerging risks are identified, and explaining how they
are being managed and mitigated; and
•
the Directors’ explanation in the Viability Statement of how they
assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate, and
their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any
necessary qualifications or assumptions.
We are also required to review the Viability Statement, set out on
page 55 under the UK Listing Rules. Based on the above procedures,
we have concluded that the above disclosures are materially
consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of
only the knowledge acquired during our financial statements audit.
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
absence of anything to report on these statements is not a guarantee
as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the Directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and our
audit knowledge:
•
The Directors’ statement that they consider that the Annual Report
and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy.
•
The section of the Annual Report describing the work of the
Audit and Risk Committee, including the significant issues that the
Audit and Risk Committee considered in relation to the financial
statements, and how these issues were addressed.
•
The section of the Annual Report that describes the review of the
effectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of
the UK Corporate Governance Code specified by the UK Listing Rules
for our review. We have nothing to report in these respects.
8 We have nothing to report on the other
matters on which we are required to
report by exception
Under the Companies Act 2006, we are required to report to you if,
in our opinion:
•
adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us;
•
the parent company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns;
•
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.
9 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 111,
the Directors are responsible for:
•
the preparation of the financial statements, including 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 Group and parent 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 Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
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 (www.frc.org.uk/auditorsresponsibilities).
The Company is required to include these financial statements in an
annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides
no assurance over whether the annual financial report has been
prepared in accordance with those requirements.
10 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.
Natalia Bottomley (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square, London, E15 4GL
20 April 2026
Saga plc
Annual Report and Accounts 2026
117
Financial statements
Additional information
Governance
Strategic Report
Consolidated financial statements
Consolidated income statement
FOR THE YEAR ENDED 31 JANUARY 2026
Notes
2026
£m
2025
£m
Continuing operations
Revenue
3
Cost of sales
3
(341.1 )
(308.8 )
Gross profit
Administrative and selling expenses
5
(252.9 )
(231.8 )
Increase in credit loss allowance
(0.9 )
(1.8 )
Impairment of non-financial assets
6
(0.5 )
(162.8 )
Gain on lease modification
18
Net profit on disposal of property, plant and equipment and software
15, 17, 18
Investment income
7
Finance costs
8
(68.6 )
(50.5 )
Profit/(loss) before tax from continuing operations
(160.2 )
Income tax credit/(expense)
10
(18.5 )
Profit/(loss) from continuing operations
(178.7 )
(Loss)/profit from discontinued operations, net of tax
1
38a
(0.5 )
Profit/(loss) for the year
(164.9 )
Attributable to:
Equity holders of the parent
(164.9 )
Earnings/(loss) per share:
Basic
12
(117.4 p)
Diluted
12
(117.4 p)
Earnings/(loss) per share from continuing operations:
Basic
12
(127.2 p)
Diluted
12
(127.2 p)
The Notes on pages 123-187 form an integral part of these consolidated financial statements.
1
The results of discontinued operations, comprising the post-tax profit, are shown as a single amount on the face of the income statement. An analysis of this amount is presented
in Note 38a
Saga plc
Annual Report and Accounts 2026
118
Consolidated statement of comprehensive income
FOR THE YEAR ENDED 31 JANUARY 2026
Notes
2026
£m
2025
£m
Profit/(loss) for the year
(164.9 )
Other comprehensive income
Other comprehensive income that may be reclassified to the income statement in
subsequent years from continuing operations
Net (losses)/gains on hedging instruments during the year
19
(4.5 )
Recycling of previous losses/(gains) to the income statement on matured hedges
19
(3.3 )
Total net (losses)/gains on cash flow hedges
(2.9 )
Associated tax effect
(0.3 )
Total other comprehensive (losses)/gains with recycling to the income statement from
continuing operations
(2.9 )
Other comprehensive income that will not be reclassified to the income statement
in subsequent years from continuing operations
Remeasurement gains on defined benefit plan
27
Associated tax effect
(12.0 )
Total other comprehensive gains/(losses) without recycling to the income statement from
continuing operations
(7.4 )
Total other comprehensive income/(losses) from continuing operations
(5.0 )
Total comprehensive income/(losses) for the year
(169.9 )
Attributable to:
Equity holders of the parent
(169.9 )
Arising from:
Continuing operations
(183.7 )
Discontinued operations
(0.5 )
(169.9 )
The Notes on pages 123-187 form an integral part of these consolidated financial statements.
Additional information
Governance
Saga plc
Annual Report and Accounts 2026
119
Strategic Report
Financial statements
Consolidated financial statements
Consolidated statement of financial position
AT 31 JANUARY 2026
Notes
2026
£m
2025
£m
Assets
Goodwill
14
Intangible assets
15
Property, plant and equipment
17
Right-of-use assets
18
Financial assets
19
Current tax assets
Inventories
22
Trade and other receivables
23
Trust and escrow accounts
24
Cash and short-term deposits
25
Assets held for sale
38
Total assets
Liabilities
Retirement benefit scheme liability
27
Provisions
31
Financial liabilities
19
Contract liabilities
29
Trade and other payables
26
Liabilities directly associated with assets held for sale
Total liabilities
Equity
Issued capital
33
Share premium
Own shares held reserve
(1.6 )
(1.4 )
Retained deficit
(604.7 )
(620.2 )
Share-based payment reserve
Hedging reserve
(2.2 )
(0.5 )
Cost of hedging reserve
(1.2 )
Total equity
Total equity and liabilities
The Notes on pages 123-187 form an integral part of these consolidated financial statements.
Mike Hazell
Mark Watkins
Group Chief Executive Officer
Saga plc
Annual Report and Accounts 2026
120
Consolidated statement of changes in equity
FOR THE YEAR ENDED 31 JANUARY 2026
Attributable to the equity holders of the parent
Issued
capital
£m
Share
premium
£m
Own
shares
held
reserve
£m
Retained
(deficit)/
earnings
£m
Share-
based
payment
reserve
£m
Hedging
reserve
£m
Cost of
hedging
reserve
£m
Total
£m
At 1 February 2025
(1.4 )
(620.2 )
(0.5 )
Profit for the year from continuing operations
Loss for the year from discontinued operations
(0.5 )
(0.5 )
Profit for the year
Other comprehensive gains/(losses) excluding
recycling from continuing operations
(4.5 )
Recycling of previous losses to the income statement
from continuing operations
Total comprehensive income/(losses)
(2.9 )
Issue of share capital (Note 33)
(0.2 )
Transfer between reserves
(1.2 )
Share-based payment charge (Note 36)
Transfer upon vesting of share options
(4.5 )
(0.1 )
At 31 January 2026
(1.6 )
(604.7 )
(2.2 )
(1.2 )
At 1 February 2024
(1.2 )
(452.5 )
(2.9 )
Loss for the year from continuing operations
(178.7 )
(178.7 )
Profit for the year from discontinued operations
Loss for the year
(164.9 )
(164.9 )
Other comprehensive (losses)/gains excluding recycling
from continuing operations
(7.4 )
(2.2 )
Recycling of previous gains to the income statement from
continuing operations
(2.8 )
(2.8 )
Total comprehensive (losses)/income
(172.3 )
(169.9 )
Issue of share capital (Note 33)
(0.2 )
Share-based payment charge (Note 36)
Transfer upon vesting of share options
(4.7 )
(0.1 )
At 31 January 2025
(1.4 )
(620.2 )
(0.5 )
The Notes on pages 123-187 form an integral part of these consolidated financial statements.
Additional information
Governance
Saga plc
Annual Report and Accounts 2026
121
Strategic Report
Financial statements
Consolidated financial statements
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 JANUARY 2026
Notes
2026
£m
2025
£m
Profit/(loss) before tax from continuing operations
(160.2 )
Profit before tax from discontinued operations
38a
Profit/(loss) before tax
(141.1 )
Depreciation, impairment and profit on disposal, of property, plant and equipment,
and right-of-use assets
Amortisation and impairment of intangible assets and goodwill
Loss on disposal of assets held for sale
38a
Impairment of assets held for sale
38b
Gain on lease modification
18
(0.2 )
Share-based payment transactions
Net finance expense from insurance contracts
28
Net finance income from reinsurance contracts
28
(2.2 )
(7.3 )
Finance costs
8
Interest income from investments
(10.8 )
(17.3 )
(Increase)/decrease in trust and escrow accounts
(3.2 )
Movements in other assets and liabilities
(1.2 )
Investment income interest received
Interest paid
(49.9 )
(41.7 )
Income tax received
Net cash flows from operating activities
Investing activities
Proceeds from sale of property, plant and equipment and right-of-use assets
Purchase of, and payments for, the construction of property, plant and equipment and
intangible assets
(16.1 )
(20.1 )
Disposal of financial assets
Purchase of financial assets
(11.5 )
Disposal of subsidiary
38a
Cash and cash equivalents disposed of with subsidiary
38a
(84.4 )
Net cash flows from investing activities
Financing activities
Payment of principal portion of lease liabilities
32
(6.3 )
(7.3 )
Proceeds from new borrowings
32
Repayment of borrowings
32
(380.6 )
(232.2 )
Debt issue costs
32
(17.6 )
Net cash flows used in financing activities
(69.5 )
(144.5 )
Net increase/(decrease) in cash and cash equivalents
(16.5 )
Cash and cash equivalents at the start of the year
Cash and cash equivalents at the end of the year
25
Included in the above are cash flows from discontinued operations. An analysis of these can be found in Note 38a.
The Notes on pages 123-187 form an integral part of these consolidated financial statements.
Saga plc
Annual Report and Accounts 2026
122
Notes to the consolidated financial statements
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
123
Company
) is a public limited company incorporated and
domiciled in the United Kingdom
UK
) under the Companies Act 2006
(registration number 08804263). The Company is registered in
base, which include package and cruise holidays, general insurance
products, personal finance products and a range of media content,
prepared in accordance with UK-adopted international
The consolidated financial statements have been prepared on a going
concern basis and on a historical cost basis, except as otherwise
stated. The Group reviewed the appropriateness of the going concern
basis in preparing the financial statements, details of which are
included below. Based on those assumptions, the Directors concluded
that it remains appropriate to adopt the going concern basis in
preparing the financial statements.
British pounds sterling (
GBP
), which is also the parent company’s
functional currency, and all values are rounded to the nearest hundred
thousand (£m), except when otherwise indicated. Each company in
the Group determines its own functional currency and items included
in the financial statements of each entity are measured using that
The preparation of financial statements in compliance with
UK-adopted international accounting standards requires the use
of certain critical accounting estimates. It also requires management
to exercise judgement in applying the Group’s accounting policies.
The areas where significant judgements and estimates have been
made in preparing the financial statements, and their effect, are
disclosed in Note 2.6.
The material accounting policies adopted, which have been applied
consistently, unless otherwise stated, are set out in Note 2.3.
The Directors have assessed the Group’s ability to continue as a
going concern over the period to 30 April 2027, being at least
12 months from the date of approval of the Annual Report and
Accounts. This assessment considered the Group’s current liquidity
position, financial forecasts, debt facilities, covenant compliance and
principal risks. The review included both the Board-approved base
case and a severe but plausible stressed scenario.
Under the base case, the Group maintains Available Cash
2
in excess
of internal minimum liquidity requirements throughout the
assessment period. No drawdown of the Group’s £33.4m Revolving
Credit Facility (
RCF
) or £116.6m delayed-draw term loan (
DDTL
)
facility is required, and the Group remains in compliance with all
financial covenants linked to its debt facilities.
The stressed scenario models multiple downside risks occurring
concurrently across the assessment period. These include lower
trading performance across Ocean Cruise, River Cruise and
Holidays, reflecting a reduction in load factors for Ocean Cruise from
93% for the year ended 31 January 2026 to 88% over the assessment
period, a 1-2% reduction in per diems in River Cruise and softer
customer volumes in our Holidays business; lower-than-planned
benefit realisation and increased operating pressures within
Insurance Broking; and a competitive savings market combined
with weaker demand for our other products in the Money division.
The scenario additionally incorporates a cyber-related operational
disruption affecting both Cruise and Insurance, as well as certain
adverse non-trading cash impacts, including higher Association
of British Travel Agents (
ABTA
) bonding requirements. Together,
these stresses reduce profitability and cash generation relative
to the base case.
In forming their conclusion, the Directors considered the Group’s
exposure to the crisis in the Middle East and the increased volatility in
global energy markets. Saga is 100% hedged against foreign exchange
risk for both 2026/27 and 2027/28 and is 100% and 75% hedged for
commodity risk respectively. However, the Group remains directly
exposed to risks associated with supply constraints for marine fuel in
its Cruise operations and, indirectly, to jet fuel through the Holidays
business unit’s partnerships with airlines. Additional reverse stress
testing indicates that, in 2026/27, Saga could withstand a reduction
in planned EBITDA of more than 50% before breaching its leverage
covenant and losing access to currently undrawn debt facilities.
The Directors also considered additional downside risks not explicitly
modelled, including regulatory, operational and economic
uncertainties. These were assessed as either remote within the going
concern period or mitigated through existing controls and
contingency planning.
Having reviewed the forecasts, stress testing and associated risk
analysis, the Directors are satisfied that the Group can expect to
remain in compliance with its debt covenants and retain access
to currently undrawn facilities even under the stressed scenario.
risks to the Group’s trading, based on this analysis and the scenarios
modelled, they have concluded that the Group has adequate
resources to continue in operational existence for the foreseeable
future and that there are no material uncertainties that may cast
significant doubt on the Group’s ability to continue as a going concern.
Accordingly, the financial statements to 31 January 2026 have been
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its
subsidiaries
, collectively the
Group
) made up to 31 January each
year. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with an investee entity and
has the ability to affect those returns through its power over the
investee entity.
The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether
the Group controls another entity.
Subsidiary companies are consolidated using the acquisition method.
The results of subsidiaries acquired, or disposed of, during the year
are included in the consolidated income statement from the effective
date of acquisition (control) or up to the effective date of disposal
(control ceases), as appropriate. Where a subsidiary which
constituted a separate major line of business is disposed of, it is
disclosed as a discontinued operation.
In preparing these consolidated financial statements, any intra-group
receivables, payables, income and expenses arising from intra-group
trading are eliminated. Where accounting policies used in individual
financial statements of a subsidiary company differ from Group
policies, adjustments are made to bring these policies in line with
Group policies.
A change in the ownership interest of a subsidiary, without a loss of
control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the
related assets (including goodwill), liabilities, non-controlling interest
and other components of equity, while any resultant gain or loss is
recognised in profit or loss. Any investment retained is recognised
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
124
Revenue represents amounts receivable from the sale or supply of
goods and services provided to customers in the ordinary course of
business and is recognised to the extent that it is probable that the
future economic benefits will flow to the Group and the revenue
can be reliably measured, regardless of when payment is received.
The policies for the recognition of the Group’s various revenue
streams by segment are as follows:
i) Travel
Revenue from Cruise, in respect of Ocean Cruise holidays, is
recognised in line with the performance obligations, being the cruise
itself, flights and/or rail journeys (where applicable), travel insurance
and transfers. The standalone selling price of each performance
obligation is estimated as the cost to provide each obligation plus a
profit margin appropriate to the nature of each service. The price
charged to each customer is then apportioned to each performance
obligation based on the relative estimated standalone selling prices,
in line with the requirements of International Financial Reporting
Standard (
IFRS
) 15 ‘Revenue from Contracts with Customers’.
The portion of revenue allocated to the cruise itself is recognised
on a per diem basis over the duration of the cruise, in line with when
the performance obligation is satisfied. The portion of revenue
allocated to flights, flight upgrades (where applicable) and transfers
is recognised on the date that each trip is fulfilled.
Revenue from travel insurance (which is underwritten by a third party)
for cruising holidays is recognised at the cover start date of the policy,
which is usually at the point the customer makes a booking.
Revenue from Cruise, relating to chartered River Cruise ships, is also
recognised in line with the performance obligations that are included
in a package holiday, namely the provision of flights, accommodation,
transfers and travel insurance. Revenue is recognised as and when
each performance obligation is satisfied, which is deemed to be when
each service to the customer takes place.
For Holidays, revenue in relation to flights and flight upgrades is
recognised on the date of each flight; revenue in relation to
accommodation is recognised over the duration of the holiday;
revenue in relation to transfers is recognised on the date that the
transfers occur before and after each holiday; and revenue in
respect of travel insurance (which is underwritten by a third-party)
is recognised on the cover start date of the insurance. This is
consistent with the approach adopted by the Cruise business.
An element of revenue which represents the non-refundable deposit
received at the time of booking is recognised in the income statement
when the likelihood of the customer exercising their remaining rights
becomes remote.
Revenue from sales in resort, or on board a cruise ship operated by
the Group, for example for optional excursions, is recognised as it
is earned.
Revenue from Travel received in advance of when each performance
obligation is satisfied is included as deferred revenue within contract
liabilities in the statement of financial position.
ii) Insurance
The amounts received from customers for insurance policies
comprise three main elements: the premium charged to the customer
in respect of the insurance cover (
gross premium
); insurance
premium tax (
IPT
); and an arrangement fee, where applicable
(only applied to policies that are brokered via a panel). The gross
premium itself comprises two elements: the premium charged by the
underwriter of each policy (
net premium
), plus any adjustment to the
net premium that is applied by the Group’s broker during the broking
service (
street pricing adjustment
). Prior to 1 July 2025, policies
were underwritten either by the Group’s in-house underwriter, or by
a third party. Following the sale of the Group’s in-house underwriting
business on 1 July, all policies are underwritten exclusively by
third-party underwriters.
The Group may also charge additional amounts, where the customer
pays in instalments, for mid-term cancellations or for adjustments
made to policies mid-term.
IPT is excluded from all revenue recognised by the Group.
Our Insurance Broking business also offers a three-year fixed-price
feature, bundled within the Saga Plus product offering for motor and
home insurance. This product is a distinct and separate service
offered by the broker, as a promise to match or beat the premium for
the next two renewal dates for the same level of protection and
provided that the customer’s circumstances do not change.
(a) For 12-month insurance policies with no option to fix the
premium at renewal (
annual policies
)
For insurance policies underwritten by the Group (up to 1 July 2025
3
):
•
the gross insurance premium and any amounts received as a result
of the policyholder opting to pay in instalments were recognised as
insurance revenue on a straight-line, time-apportioned basis over
the coverage period;
•
any such amounts received in advance of coverage being provided
to the policyholder were deferred within insurance contract
liabilities in the statement of financial position;
•
mid-term adjustments to premiums were recognised on a
straight-line, time-apportioned basis over the remaining coverage
period of the policy; and
•
reductions in premiums arising from mid-term cancellations were
recognised on the effective date of the cancellation.
The above treatment is in line with the requirements of IFRS 17
‘Insurance Contracts’ (see also Note 2.3r).
For insurance policies not underwritten by the Group:
•
the portion of the gross premium that is retained by the Group,
otherwise referred to as the street pricing adjustment, is allocated
to performance obligations and recognised as those performance
obligations are satisfied. The most material amount is allocated
to the performance obligation relating to the brokerage service,
which is recognised on the inception date of the insurance
contract; and
•
the portion of the gross premium charged by the third-party
underwriter, otherwise referred to as the net premium, is not
recognised as revenue in the income statement.
The above treatment is in line with the requirements of IFRS 15.
For all insurance policies:
•
the arrangement fee that is charged in respect of the broking
service is recognised within revenue from Insurance Broking
services on the date that each policy is arranged; and
•
any fee income charged for a mid-term cancellation or adjustment
is recognised on the date the adjustment is made, being the point
that the mid-term service is fulfilled. Where these amounts arise
from insurance contracts underwritten by the Group, they are
presented within Insurance revenue, otherwise they are presented
within revenue from Insurance Broking services.
(b) For 12-month insurance policies where customers have
the option to fix the premium over three years (
three-year
fixed-price products
)
The policyholder’s option to fix the annual premium at the first and
second renewal points is accounted for under IFRS 15 as a promise
to the customer.
Where the related insurance policy is not underwritten by the Group,
this promise is accounted for as a separate performance obligation to
the brokerage service.
Where the related insurance policy was underwritten by the Group
(up to 1 July 2025
3
), this promise was a distinct service that was
accounted for separately from the host insurance contract because:
•
the cash flows and risks of the price promise service were not
highly interrelated with those of the insurance contract; and
•
the Group did not provide a significant service in integrating the
price promise with the insurance underwriting service.
3
Refer to Note 38a on pages 182-184 for further detail
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
125
Therefore, the accounting treatment of the Group’s obligation to fix
the premium did not depend on whether the related insurance policy
was underwritten by the Group.
For all three-year fixed-price products, the Group allocates a portion
of the gross premiums received at inception and at the first renewal
point to the price promise service. The amount allocated to this
service is an estimate of its standalone selling price, being an actuarial
estimate of the cost of transferring the obligation to a third party plus
an appropriate profit margin.
Amounts allocated to the price promise service are initially deferred
within contract liabilities in the statement of financial position and
subsequently recognised as revenue since the option to fix is exercised
by the customer (and the Group’s performance obligation is satisfied).
If a customer cancels a policy subject to the three-year fixed-price
promise mid-term, or chooses not to renew in the second or third
years, any remaining deferred revenue is recognised within revenue
at the point the cover ends, being the point that the Group is released
from the obligation to fix the price at renewal.
The Group previously entered into contracts to limit its exposure to
potential losses arising as a result of underwriting net rate inflation in
respect of its three-year fixed-price offering. The Group continues
to recognise amounts arising from those contracts. Those contracts
are classified as insurance contracts held.
(c) Other sources of revenue relating to insurance policies
Profit commissions due to the Group, from acting as an insurance
intermediary on behalf of third-party underwriters, are recognised
and valued in accordance with the contractual terms to which they are
subject, when it is highly probable that a significant reversal of revenue
will not occur.
Where claims arise on insurance policies that are not the fault of the
insured, the Group may earn revenue from:
•
referrals to credit hire companies (in relation to policies
underwritten by the Group or by third parties); and
•
referrals to credit repair companies (in relation to policies
underwritten by third parties only).
This revenue is recognised at the point of referral.
iii) Other Businesses and Central Costs
(a) Saga Money
Revenue from personal finance products is recognised when the
customer contracts with the provider of the relevant personal finance
product where the revenue comprises a one-off payment by the
provider of the product.
Where the personal finance product is one that delivers a recurring
income stream, the present value of the future expected revenue
to be received is recognised when the customer contracts with the
provider of the relevant personal finance product, and it is highly
probable that a significant reversal of revenue recognised will
not occur.
For the Saga savings product, commissions are earned over the
duration of the contract in line with the contractual amount due to
the Group.
For Saga equity release products, commissions are earned initially
and over the lifetime of the product. Additionally, further commissions,
where applicable, are earned at each subsequent stage of the
drawdown if any more of the advance is taken by the customer. Initial
commission relating to new business is recognised as revenue at the
point the performance obligation with the Group’s contracted
business partners is satisfied, and the customer has taken out the
product. Where applicable, and the probability of further drawdowns
is high, trail commission is recognised as the discounted future cash
flows expected to be received over the estimated life of the product
and likewise for further commissions on additional drawdowns
undertaken by the customer.
For Saga legal services, mortgage and investing products, broking
commissions are earned initially, and over the duration of the contract,
in line with the contractual amount due to the Group.
(b) Saga Publishing
Magazine subscription revenue is recognised on a straight-line basis
over the period of the subscription. Revenue generated from
advertising within the magazine is recognised when the magazine
is provided to the customer.
The element of subscriptions and advertising revenue relating to the
period after the reporting date is recognised as deferred revenue
within contract liabilities in the statement of financial position.
(c) Printing and mailing
Revenue from printing and mailing services is recognised in line with
Acquisition costs arising from the selling or renewing of insurance
policies underwritten by the Group until the disposal of the Group’s
underwriting business on 1 July 2025
4
(
insurance acquisition cash
flows
) were expensed when they were incurred within insurance
service expenses in the income statement. See also Note 2.3r(viii).
For insurance policies not underwritten by the Group, fees charged
by price-comparison websites are recognised as a contract cost asset
within trade and other receivables and amortised in line with the
pattern of revenue recognition for the related insurance policies.
This takes into account revenue expected to be generated from
future renewals. Other incremental costs of obtaining insurance
policies not underwritten by the Group, such as payment processing
costs, would be incurred again if the insurance contract renews.
Therefore, the pattern of revenue recognition relating to these
incremental costs is one year. As permitted by IFRS 15, such costs
ii) Claims costs (discontinued operations)
Claims costs incurred in respect of insurance policies underwritten
by the Group (until 1 July 2025
4
) were included as insurance service
expenses within the profit or loss from discontinued operations.
These costs included estimates in respect of losses reported as
having occurred during the period, an estimate for the cost of claims
incurred during the period but not reported at the reporting date, and
any adjustments to claims outstanding from previous periods. See
Note 2.3r(vi)(b) for further details.
The portion of claims costs recoverable from reinsurance contracts
was recognised within net income from reinsurance contracts within
the profit or loss from discontinued operations. These recoveries
were recognised in the same period in which the claims costs were
recognised. See Note 2.3r(vii) for further details.
Finance costs comprise interest paid and payable, and commitment
fees, calculated using the effective interest rate (
EIR
) method, and are
recognised in the income statement as they accrue. Accrued interest
is included within the carrying value of the interest-bearing financial
liability in the statement of financial position. Finance costs also include
debt issue costs that were initially recognised in the statement of
financial position and are amortised over the life of the debt, debt issue
costs in respect of renegotiating existing, or negotiating new, facilities
that are immediately recognised in the income statement and net
All other expenses are recognised in the income statement as they
4
Refer to Note 38a on pages 182-184 for further detail
Consolidated financial statements
Notes to the consolidated financial statements
continued
2.3 Summary of material accounting policies
continued
Saga plc
Annual Report and Accounts 2026
126
Investment income, in the form of interest, is recognised in the income
statement as it accrues and is calculated using the EIR method.
Interest income is earned by the Group on assets held at fair value
through profit or loss (
FVTPL
) and amortised cost. Fees and
commissions, which are an integral part of the effective yield of the
financial asset or liability, are recognised as an adjustment to the EIR
ii) Dividend income
Income in the form of dividends is recognised when the right to receive
payment is established. For listed securities, this is the date that the
security is listed as ex-dividend.
Realised and unrealised gains and losses on financial investments
are recorded as investment income in the income statement and
represent net fair value gains and losses arising from changes in
iv) Other income
The Group recognises other items in profit or loss as other income,
when the amounts become receivable and its right to receive
payments is established.
v) Affinity Partnership income
Income from the 20-year partnership for motor and home insurance
with wholly owned subsidiaries in the UK of Ageas SA/NV (
Ageas
)
(
Affinity Partnership
) income is recognised on a straight-line basis
i) Current income tax
Income tax assets and liabilities for the current period are measured
at the amount expected to be recovered from, or paid to, taxation
authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the reporting
date. Current income tax assets and liabilities also include
adjustments in respect of tax expected to be payable, or recoverable,
in respect of previous periods. Current income tax relating to items
recognised in other comprehensive income (
OCI
) and directly in
equity is recognised in OCI or equity and not in the income statement.
The Group has elected to be in the UK tonnage tax regime. Under the
tonnage tax regime, the current year tax expense for the subsidiaries
that own the Ocean Cruise ships is calculated by reference to the net
tonnage of the qualifying ship operated by the company. To the extent
that the Group generates profit or losses, which do not qualify for
inclusion under the above regime, they will be taxable under general
UK tax principles.
Deferred tax is provided on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available, against which the
deductible temporary differences and the carry forward of unused tax
credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting 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. Unrecognised deferred tax assets
are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply in 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 reporting date.
Deferred tax is charged, or credited, in the income statement, except
when it relates to items charged or credited in OCI or equity, in which
case the deferred tax is recognised in OCI or equity as appropriate.
Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set-off current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable entity
Transactions in foreign currencies are initially recorded by the Group
at their respective functional currency spot rate at the date that the
transaction first qualifies for recognition. Monetary assets and
liabilities denominated in foreign currencies are retranslated at
the functional currency spot rate of exchange prevalent at the
Intangible assets acquired are measured on initial recognition at cost
and, subsequent to initial recognition, are carried at cost less any
accumulated amortisation and accumulated impairment losses.
The cost of intangible assets acquired in a business combination is
their fair value at the date of acquisition. Internally generated
intangibles, excluding internally developed software, are not
capitalised and the related expenditure is reflected in the income
statement in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed finitely. Computer
software costs recognised as assets are amortised over their
estimated useful economic lives, which vary from asset to asset within
a range of 3-13 years.
Intangible assets are amortised over their useful economic life on a
basis appropriate to the consumption of the asset and are assessed
for impairment whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the income statement
in the expense category that is consistent with the function of the
intangible assets.
Gains or losses arising from derecognition of an intangible asset are
measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognised in the income
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, measured at acquisition date at fair
value, and the amount of any non-controlling interests in the acquiree.
the non-controlling interests in the acquiree at fair value or at the
When the Group acquires a business, it assesses the financial
and non-financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual
terms, economic circumstances and pertinent conditions at the
acquisition date.
Any contingent consideration to be transferred by the Group will
be recognised at fair value at the acquisition date. Contingent
consideration classified as an asset or liability that is a financial
instrument within the scope of IFRS 9 ‘Financial Instruments’ is
measured at fair value, with the changes in fair value recognised in
the income statement.
Any excess of the cost of acquisition over the fair values of the
identifiable assets and liabilities is recognised as goodwill. If the cost
of acquisition is less than the fair values of the identifiable assets and
liabilities of the acquired business, the difference is recognised directly
in the income statement in the year of acquisition.
Acquisition-related costs are expensed as incurred and included in
administrative expenses.
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
127
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. Goodwill is allocated to cash
generating units (
CGUs
) at the point of acquisition and is reviewed
at least annually for impairment.
The useful life of goodwill is assessed as indefinite. Goodwill is not
amortised, but is tested for impairment at least annually, at the CGU
level. Where the carrying value of the asset exceeds the recoverable
amount, an impairment loss is recognised in the income statement
Goodwill is not subject to amortisation and is tested annually for
impairment, or more frequently if events or changes in circumstances
indicate that it might be impaired. If such an indication exists, the
recoverable amount is estimated and compared with the carrying
amount. If the recoverable amount is less than the carrying amount,
the asset is considered impaired and is written down to its recoverable
amount and the impairment loss is recognised immediately in the
income statement.
Other assets are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. If there is any indication that an asset may be impaired,
a recoverable amount is estimated for the individual asset. If it is not
possible to estimate the recoverable amount of the individual asset,
the recoverable amount is determined according to the CGU to which
the asset belongs.
For impairment testing, assets are grouped together into the smallest
group of assets that generate cash inflows from continuing use that
are largely independent of the cash inflows of other assets or CGUs.
Goodwill arising from a business combination is allocated to the CGUs,
or groups of CGUs, that are expected to benefit from the synergies of
the combination.
The recoverable amount is calculated as the higher of fair value less
costs to sell, and value-in-use. In assessing value-in-use, where
appropriate, estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available fair value
indicators. The Group bases its value-in-use calculations on detailed
budgets, plans and long-term growth assumptions, which are
prepared separately for each of the Group’s CGUs to which individual
Property, plant and equipment is stated at cost, net of accumulated
depreciation and impairment losses. Where an item of property, plant
and equipment comprises major components having different useful
lives, they are accounted for separately.
position date are classified separately. These assets are transferred
to other asset categories when they become available for their
basis to write off the depreciable amount of property, plant and
equipment over their estimated useful lives. The depreciable amount
is the cost of an asset less its residual value. Land and assets in the
are as follows:
Buildings, properties and related fixtures:
Buildings |
50 years |
Fixtures and fittings |
3-20 years |
Ocean Cruise ships |
3-30 years |
Computers |
3-6 years |
Plant, vehicles and other equipment |
3-10 years |
Costs relating to Ocean Cruise ship mandatory dry-dockings are
capitalised and depreciated over the period up to the next
dry-docking, where appropriate. The International Convention for
the Safety of Life at Sea regulations stipulate that ships have to be
dry-docked twice in an interval of five years, with the interval between
consecutive dry-dockings being not less than two years and not more
than three years. All other repairs and maintenance costs are
An item of property, plant and equipment is derecognised upon
disposal, or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition of an asset
(calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the income statement
when the asset is derecognised.
Estimated residual values and useful lives are reviewed annually.
In relation to the annual review of estimated residual values and
useful lives of Ocean Cruise ships, potential environmental regulatory
changes are also considered. The shipping industry has made a
commitment to reduce CO
2
emissions by 40% by 2030 (from a
2008 baseline), and the UK Government has made commitments
to reach net zero emissions by 2050. The Energy Efficiency Existing
Ship Index (
EEXI
) and Carbon Intensity Indicator (
CII
) regulations
were introduced internationally in 2023 to enable the industry to
meet the 2030 target, and the Group’s Ocean Cruise ships meet the
requirements of these regulations. The end of their useful economic
lives of 30 years will have been reached by 2049 in the case of Spirit
discontinued operations
The Group classifies non-current assets as held for sale if their
carrying amount will be recovered principally through a sale
transaction rather than through continuing use. To be classified as
held for sale, an asset must be available for immediate sale in its
present condition, subject only to terms that are usual and customary
for the sale of such assets, and the sale must be highly probable. A sale
is considered to be highly probable when management is committed
to a plan to sell an asset, an active programme to locate a buyer and
complete the plan has been initiated, at a price that is reasonable in
relation to its current fair value, and there is an expectation that the
sale will be completed within one year from the date of classification.
Non-current assets classified as held for sale are carried on the
Group’s statement of financial position at the lower of their carrying
amount and fair value less costs to sell. In accordance with IFRS 5
‘Non-current Assets Held for Sale and Discontinued Operations’,
an impairment loss on a disposal group is allocated to non-current
assets within the scope of the standard, limited to the carrying value
of those assets. If there are no non-current assets within the scope
of IFRS 5 for which an impairment loss can be allocated against,
the impairment loss will be recognised at the time of disposal.
Property, plant and equipment and intangible assets, once classified
as held for sale, are not depreciated or amortised.
The Group classifies a component of the Group as a discontinued
operation when it has either been disposed of, or is classified as held
for sale, and:
•
represents a separate major line of business or geographical area
of operations;
•
is part of a single coordinated plan to dispose of a separate major
line of business or geographical area of operations; or
•
is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing
operations and are presented as a single amount of profit or loss after
tax from discontinued operations in the income statement. The assets
and liabilities relating to discontinued operations are excluded from
those of continuing operations and are presented as single amounts
Consolidated financial statements
Notes to the consolidated financial statements
continued
2.3 Summary of material accounting policies continued
Saga plc
Annual Report and Accounts 2026
128
On initial recognition, a financial asset is classified as either amortised cost, fair value through other comprehensive income (
FVOCI
) or FVTPL.
The classification of financial assets is based on the business model in which a financial asset is managed, and its contractual cash flow
characteristics. Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead,
the hybrid financial instrument, as a whole, is assessed for classification. The Group does not hold any financial assets classified as FVOCI.
Initial recognition |
Subsequent measurement |
|
Amortised |
A financial asset is classified as amortised cost |
These assets are subsequently measured at amortised cost using |
cost |
(initially measured at fair value plus any directly |
the EIR method. The amortised cost is reduced by any impairment |
attributable transaction costs) if it meets both of the |
losses (see (ii) below). Interest income, foreign exchange gains and |
|
following conditions and is not elected to be designated |
losses and impairments are recognised in profit or loss as they are |
|
as FVTPL: |
incurred. Any gain or loss on derecognition is recognised in profit |
|
| • It is held within a business model whose objective is |
or loss immediately. |
|
to hold assets to collect contractual cash flows. |
||
• Its contractual terms give rise, on specified dates, |
||
to cash flows that are solely payments of principal |
||
and interest on the principal amount outstanding. |
||
The Group classifies trade receivables and other |
||
receivables as held at amortised cost. |
||
FVTPL |
All financial assets not classified as amortised cost |
These assets are subsequently measured at fair value. Net gains |
(or FVOCI), as described above, are classified as FVTPL |
and losses, including any interest or dividend income (separately |
|
and held at fair value. This includes all derivative |
disclosed), are recognised in profit or loss, unless such instruments |
|
financial assets. |
are designated in a hedging relationship (see (vi) overleaf). |
|
On initial recognition, the Group may irrevocably elect |
||
to designate a financial asset, which otherwise meets |
||
the requirements to be measured at amortised cost |
||
or FVOCI, as FVTPL if doing so eliminates, or |
||
significantly reduces, an accounting mismatch that |
||
would otherwise arise. This election is made on an |
||
individual instrument basis. |
||
This election has been made for the Group’s debt |
||
securities. |
||
The Group classifies loan funds, money market funds |
||
held within the Insurance business and foreign |
||
exchange forward contracts not designated in a |
||
hedging relationship, as FVTPL. |
(a) Derecognition
A financial asset is derecognised when the rights to receive cash flows
from the asset have expired or when the Group has transferred
substantially all the risks and rewards relating to the asset to a
The expected credit loss (
ECL
) impairment model applies to financial
assets measured at amortised cost.
The Group measures loss allowances at an amount equal to 12-month
ECLs, except for the following, which are measured as lifetime ECLs:
•
Debt securities that are determined to have high credit risk at the
reporting date.
•
Other debt securities and bank balances for which credit risk has
increased significantly since initial recognition.
•
Trade receivables and contract assets that result from
transactions within the scope of IFRS 15.
When determining whether the credit risk of a financial asset has
increased significantly since initial recognition, and when estimating
ECLs, the Group considers reasonable and supportable information
that is relevant and available without undue cost or effort. This includes
both quantitative and qualitative information and analysis, based on
the Group’s historical experience and informed credit assessment,
including forward-looking information.
The Group considers a debt security to have low credit risk when
its credit risk rating is equivalent to the definition of investment
grade. The Group considers this to be BBB- or higher as per credit
rating scales.
(a) Measurement of ECLs
ECLs are measured as a probability-weighted estimate of credit
losses. Credit losses are measured as the probability of default in
conjunction with the present value of the Group’s exposure. Loss
allowances for ECLs on financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets, with a
(a) Initial recognition and measurement
All financial liabilities are classified as financial liabilities at amortised
cost on initial recognition except for derivatives, which are classified
at FVTPL, the gains or losses for which are recognised through OCI
if the instrument is designated as a hedging instrument in an effective
cash flow hedge.
recognised initially at fair value and, in the case of loans and
borrowings, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans
and borrowings, derivative financial instruments and lease liabilities.
(b) Subsequent measurement
After initial recognition, interest-bearing loans, borrowings and other
payables are subsequently measured at amortised cost using the
EIR method. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance
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Annual Report and Accounts 2026
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(c) Derecognition
A financial liability is derecognised when the obligation under the
liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such exchange or
modification is treated as a derecognition of the original liability and
the recognition of a new liability. The difference in the respective
Derivatives are measured at fair value, both initially and subsequently
to initial recognition. All changes in fair value of non-designated
derivatives are recognised in the income statement immediately.
Changes in fair value of derivatives designated as cash flow hedges are
initially recognised in OCI until such a point that they are recycled to
profit or loss in the same period as the hedged item is recognised in
profit or loss, or immediately if the hedged item is no longer expected
to occur.
Derivatives are presented as assets when the fair values are positive,
and as liabilities when the fair values are negative. A derivative is
presented as a non-current asset or a non-current liability if the
remaining maturity of the instrument is more than 12 months and
The Group measures all financial instruments at fair value at each
reporting date, other than those instruments measured at
amortised cost.
Fair value is the price that would be required to sell an asset or
to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement
is based on the assumption that the transaction to sell the asset
or transfer the liability takes place either in the principal market
accessible by the Group for the asset or liability or, in the absence
of a principal market, in the most advantageous market accessible
by the Group for the asset or liability.
The fair values are quoted market bid prices, where there is an active
market, or based on valuation techniques when there is no active
market or the instruments are unlisted. Valuation techniques include
the use of recent arm’s-length market transactions, discounted
cash flow analysis and other commonly used valuation techniques.
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by
The Group designates certain derivative financial instruments as cash
flow hedges of certain forecast transactions. These transactions are
highly probable to occur and present an exposure to variations in cash
flows that could ultimately affect amounts determined in profit or loss.
The Group has elected to adopt the general hedge accounting model
in IFRS 9. This requires the Group to ensure that hedge accounting
relationships are aligned with its risk management objectives and
strategy and to apply a qualitative and forward-looking approach to
assessing hedge effectiveness.
The Group uses forward foreign exchange and commodity swap
contracts to hedge the variability in cash flows arising from changes
in foreign currency rates and oil prices respectively. For foreign
exchange contracts, the Group designates only the change in fair value
of the spot element of forward exchange contracts as the hedging
instrument in cash flow hedging relationships. The change in fair value
of the forward element of forward foreign exchange contracts is
separately accounted for as a cost of hedging recognised in other
comprehensive income and accumulated in a separate cost of hedging
reserve. For commodity hedging, the Group designates the fair value
change of the benchmark oil price. The effective portion of changes in
fair value of hedging instruments is accumulated in a cash flow hedge
reserve as a separate component of equity. Any ineffective portion
of the fair value gain or loss is recognised immediately within the
income statement.
When a hedging instrument no longer meets the criteria for hedge
accounting, through maturity, sale, or other termination, hedge
accounting is discontinued prospectively. If the hedged forecast
transaction is still expected to occur, the associated cumulative gains
or losses remain in the hedging reserve and cost of hedging reserve
and are recognised in accordance with the above policy when the
hedged forecast transaction occurs. If the hedged forecast
transaction is no longer expected to occur, the cumulative unrealised
gains or losses in the hedging reserve and cost of hedging reserve are
The Group leases various River Cruise ships, buildings, equipment and
vehicles. The contract length of the lease varies considerably and may
include extension or termination options as described below.
At the inception of a contract, the Group assesses whether a contract
is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period
of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group
assesses whether: the contract involves the use of an identified asset;
the Group has the right to obtain substantially all of the economic
benefits from use of the asset throughout the period of use; and the
Group has the right to direct the use of the asset.
Leases are initially recognised as a right-of-use asset and a
corresponding lease liability at the date at which the leased asset is
available for use by the Group. The lease liability is initially measured
at the present value of the lease payments that are not paid at the
commencement date. Where it is reasonably certain that an extension
option will be triggered in a contract, lease payments to be made in
respect of the option will be included in the measurement of the
lease liability.
The lease payments are discounted using the interest rate implicit in
the lease. If that rate cannot be readily determined, which is generally
the case for leases in the Group, the Group’s incremental borrowing
rate is used. This is the rate that the Group would have to pay to
borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset, in a similar economic environment, with similar
terms, security and conditions.
Consolidated financial statements
Notes to the consolidated financial statements
continued
2.3 Summary of material accounting policies
continued
l) Leases continued
Saga plc
Annual Report and Accounts 2026
130
Lease payments are allocated between principal and finance cost.
The finance cost is charged to the income statement over the lease
period using the EIR method and the lease liability is measured at
amortised cost using the EIR method.
Right-of-use assets are initially measured at cost, comprising the
present value of future lease payments plus any initial direct costs and
restoration costs. Right-of-use assets are depreciated over the lease
term on a straight-line basis, except for the Group’s River Cruise ships.
The unit of production method is used to depreciate River Cruise ships
to accurately reflect the usage of the asset, which is seasonal.
Payments associated with short-term leases of equipment and all
leases of low-value assets are expensed in profit or loss as incurred, in
line with the exemption allowed under paragraph 6 of IFRS 16 ‘Leases’.
Short-term leases are leases with a lease term of 12 months or less
without a purchase option. Low-value assets comprise IT equipment
and small items of office furniture.
Extension and termination options are included in a number of
property and River Cruise ship leases across the Group. These are
used to maximise operational flexibility in terms of managing the
assets used in the Group’s operations. The majority of extension and
termination options held are exercisable only by the Group and not
by the respective lessor.
The Group remeasures the lease liability, and makes a corresponding
adjustment to the related right-of-use asset, whenever:
•
the lease term has changed or there is a significant event or
change in circumstances resulting in a change in the assessment
of exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a
revised discount rate; or
•
a lease contract is modified and the lease modification is not
accounted for as a separate lease, in which case the lease liability
is remeasured based on the lease term of the modified lease by
discounting the revised lease payments using a revised discount
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as part
of the cost of the respective asset. All other borrowing costs are
expensed in the period in which they occur.
Borrowing costs consist of interest and fees that an entity incurs in
Cash and short-term deposits in the statement of financial position
comprise cash at bank and in hand, short-term deposits with a
maturity of three months or less from their inception date and money
market funds held outside of the Insurance Underwriting business,
which were included within assets held for sale at 31 January 2025 and
disposed of in the year ended 31 January 2026 (Note 38a).
cash equivalents consist of cash and short-term deposits as defined
above, and short-term highly liquid investments (including money
market funds held within the Insurance Underwriting business, which
were included within assets held for sale at 31 January 2025 and
disposed of in the year ended 31 January 2026 (Note 38a)) with
original maturities of three months or less that are subject to an
Prior to 1 October 2024, 70% of customer monies received in advance
in relation to Air Travel Organisers’ Licensing (
ATOL
) licensable
bookings were held in escrow accounts until after the customer had
travelled, when the Group had fulfilled all its performance obligations
with customers. In respect of the Holidays business, from 1 October
2024, the escrow arrangement was removed and instead the Group
now must hold the 70% of customer monies received in advance
related to ATOL licensable bookings within the business.
The escrow arrangement is governed by a deed between the Group,
the Civil Aviation Authority (
CAA
) Air Travel Trustees and an
independent Trustee, PT Trustees Limited, which determines the
inflows and outflows from the accounts. The Group utilises the
remaining 30% of customer advance receipts in its Holidays and River
Trade and other receivables are initially recognised at fair value and
subsequently measured at amortised cost. Loss allowances are
Inventories are stated at the lower of cost and net realisable value.
Costs include all costs incurred in bringing each product to its present
location and condition. Net realisable value is based on estimated
selling price, less any further costs expected to be incurred prior to
reinsurance contracts (discontinued operations)
i) Classification
The Group issued insurance contracts, under which it accepted
significant insurance risk from policyholders, and also entered into
reinsurance contracts, under which it transferred significant
insurance risk related to underlying insurance contracts. ‘Reinsurance
contracts’ referred to reinsurance contracts held by the Group. The
Group did not issue any reinsurance contracts.
Insurance and reinsurance contracts could have also exposed the
Group to financial risk.
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Annual Report and Accounts 2026
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ii) Separating components from insurance and reinsurance contracts
When the Group underwrote an insurance contract, a number of
separate contracts might have been entered into at the same time.
These contracts might have involved more than one legal entity within
the Group.
As the set of contracts was designed to achieve an overall commercial
effect for the Group, for accounting purposes the following steps
were taken:
•
The total cash flows that arose from all contracts were initially
considered as a whole (together, the
host insurance contract
).
•
The Group then identified any service components that were
‘distinct’ and, therefore, required separation for accounting
purposes. A service was distinct if the policyholder could benefit
from it, either on its own or with other resources that were readily
available to the policyholder. The following distinct service
components were identified:
–
The brokerage of the core insurance contract (where it had
first been subject to the competitive pricing panel that the
Group operated).
–
The brokerage of any add-on cover underwritten by a third party.
–
The promise to fix the premium for three years (where this
option was taken by the policyholder).
These distinct service components were accounted for as separate
customer contracts under IFRS 15.
•
The total cash inflows from the combined set of contracts were
then allocated, for accounting purposes, between:
–
any distinct service components; and
–
the insurance component of the host insurance contract.
This allocation was performed based on the standalone selling price
of each component.
•
Cash outflows that related directly to each component were
attributed to that component, with any remaining cash outflows
attributed on a systematic and rational basis, reflecting the cash
outflows the Group would expect to arise if that component were
a separate contract.
iii) Aggregation of insurance and reinsurance contracts
The Group applied the requirements of IFRS 17 at the level of groups
of insurance contracts issued. Groups of insurance contracts were
determined by identifying portfolios of insurance contracts, which
comprised contracts that were subject to similar risks and managed
together, and divided each portfolio into annual cohorts (i.e. by year
of issue) and each annual cohort into three groups based on the
expected profitability of each contract at initial recognition:
•
Any contracts that were onerous at initial recognition.
•
Any contracts that, at initial recognition, had no significant risk
of becoming onerous.
•
Any other contracts.
Groups of reinsurance contracts were established such that each
group comprised a single contract.
iv) Recognition of insurance and reinsurance contracts
The Group recognised insurance contracts issued from the earliest of:
•
the beginning of the coverage period;
•
when the first payment from a policyholder became due or, if there
was no due date, when the first payment was received; and
•
when facts and circumstances indicated that the contract was
onerous. This could be as early as the date on which the contract
was first entered into.
When a contract was recognised, it was added to an existing group of
contracts or, if the contract did not qualify for inclusion in an existing
group, it formed a new group to which future contracts were added.
Groups of contracts were established on initial recognition and their
composition was not revised once all contracts had been added to
the group.
The Group recognised groups of reinsurance contracts as follows:
•
Groups of reinsurance contracts that provided proportionate
coverage (primarily quota share arrangements) were recognised
when any underlying insurance contract was initially recognised.
•
All other groups of reinsurance contracts (primarily excess of loss
arrangements) were recognised from the earlier of:
–
the beginning of the coverage period of the group of reinsurance
contracts; or
–
the date on which an onerous group of underlying contracts was
recognised (provided that the related reinsurance contract was
entered into on, or before, that date).
v) Contract boundaries
The measurement of groups of insurance contracts issued, and
reinsurance contracts, reflected all future cash flows arising from
insurance coverage within the boundary of each contract
(the
contract boundary
).
Cash flows were within the contract boundary if they arose from
substantive rights and obligations that existed during the reporting
period in which the Group could compel the policyholder to pay
premiums or had a substantive obligation to provide services.
vi) Measurement – insurance contracts
The Group measured all groups of insurance contracts issued
in accordance with IFRS 17’s simplified premium allocation
approach (
PAA
). They were eligible for the PAA as the coverage period
of each contract in each group was one year or less.
The following sections set out the Group’s approach to measuring
groups of insurance contracts under the PAA.
(a) Measurement at initial recognition
On initial recognition, the liability for remaining coverage of groups
of insurance contracts issued was measured as:
•
any premiums received at, or before, initial recognition; plus
•
for groups of contracts that were onerous (expected to be
loss-making) at initial recognition, a loss component measured as
the excess of the fulfilment cash flows over the carrying amount of
the liability for remaining coverage, excluding the loss component.
A corresponding loss was recognised in profit or loss. At initial
recognition, the loss component was only recognised and
measured in respect of policies that individually meet the
recognition criteria at that date.
Consolidated financial statements
Notes to the consolidated financial statements
continued
2.3 Summary of material accounting policies
continued
r) Insurance contracts underwritten by the Group and
reinsurance contracts (discontinued operations) continued
vi) Measurement – insurance contracts continued
Saga plc
Annual Report and Accounts 2026
132
(b) Subsequent measurement
At the end of each reporting period, each group of contracts was
measured as the sum of the liability for remaining coverage and the
liability for incurred claims.
Liability for remaining coverage
At the end of each reporting period, the carrying amount of the liability
for remaining coverage (excluding the loss component) of each group
of contracts was equal to:
•
the opening carrying amount of the liability for remaining coverage;
•
plus premiums received in the period;
•
less the amount recognised as insurance revenue for coverage
provided in the period. Insurance revenue was the amount of total
expected premium receipts (excluding premium taxes) allocated
to each period of coverage on the basis of the passage of time
(i.e. a straight-line basis). This was appropriate as, for the insurance
contracts that the Group issued, the expected pattern of release
of risk during the coverage period did not differ significantly from
the passage of time.
The liability for remaining coverage (excluding the loss component)
was not adjusted for the time value of money.
For groups of contracts that were onerous at initial recognition:
•
the loss component of the liability for remaining coverage was
increased in respect of any individual policies added to the group;
•
the loss component was reversed as coverage was provided,
reducing the liability for remaining coverage; a corresponding
credit to profit or loss meant that the onerous loss was not
recognised a second time when a liability for incurred claims was
established as coverage was provided; and
•
the expected profitability of remaining coverage was reassessed
at each reporting date, with any changes since initial recognition
reflected in the valuation of the remaining loss component of the
liability for remaining coverage, with a corresponding entry in
profit or loss.
For other groups of contracts, at each reporting date the Group
considered whether the remaining coverage had become onerous.
If so, a loss component of the liability for remaining coverage was
established with a corresponding loss recognised in profit or loss.
Liability for incurred claims
As coverage was provided, the Group established a liability for
incurred claims. The liability was estimated based on the fulfilment
cash flows relating to incurred claims, including both claims that had
been notified (i.e. outstanding claims) and claims incurred but not
reported (
IBNR
). These fulfilment cash flows:
•
included an estimate of claims handling costs and settlement
amounts, and the expected value of salvage and other recoveries;
•
incorporated, in an unbiased way, all reasonable and supportable
information available, without undue cost or effort about the
amount, timing and uncertainty of those future cash flows;
•
reflected current estimates from the Group’s perspective;
•
were adjusted to reflect the time value of money and effect of
financial risk (a discounting adjustment); the Group did not take
the PAA option to not discount claims expected to be paid within
one year of the loss event; and
•
included an explicit adjustment for non-financial risk (the
risk
adjustment
), which reflected the compensation required for
bearing uncertainty about the amount and timing of cash flows
that arose from non-financial risk.
vii) Measurement – reinsurance contracts
The Group also measured all groups of reinsurance contracts in
accordance with the PAA. Groups of excess of loss reinsurance
contracts were eligible for the PAA as each contract had a coverage
period of one year or less. Groups of other reinsurance contracts
(primarily the motor quota share arrangement) were eligible for
the PAA as, at initial recognition, the Group expected that the
resulting measurement of the asset for remaining coverage would
not have differed materially to that under the IFRS 17 general
measurement model.
Groups of reinsurance contracts were measured on the same basis as
the underlying insurance contracts, adapted as appropriate to reflect
the different features of reinsurance contracts, including:
•
where the Group recognised a loss on initial recognition of an
onerous group of underlying insurance contracts, or when further
onerous insurance contracts were added to a group, the Group
established a loss-recovery component of the asset for remaining
coverage for groups of reinsurance contracts depicting any
recovery of losses. The loss-recovery component was calculated
by multiplying the loss recognised on the underlying insurance
contracts and the percentage of claims on the underlying
insurance contracts the Group expected to recover from the
group of reinsurance contracts;
•
reinsurance cash flows that were contingent on claims experience
were treated as part of the claims expected to be reimbursed;
this applied to profit commission clauses within the Group’s motor
quota share reinsurance contracts; and
•
the Group assessed the risk that the counterparties to its
reinsurance contracts were not able to fulfil their obligations
(non-performance risk, or default risk), including by considering
available data on the financial strength of the reinsurers. An
allowance was included in the relevant estimate of the present
value of future cash flows to reflect this risk.
viii) Measurement – insurance acquisition cash flows
The Group identified insurance acquisition cash flows, being the
costs of selling, underwriting and starting insurance contracts.
The costs were primarily commissions paid to intermediaries,
including price-comparison websites, and an allocation of other
operating expenses.
The Group took the IFRS 17 option to expense insurance acquisition
cash flows immediately where the coverage period of the related
contract was one year or less. As all the Group’s insurance contracts
had a coverage period of one year or less, all insurance acquisition cash
flows were expensed when they were incurred.
ix) Modification and derecognition
An insurance contract was derecognised when:
•
it was extinguished (i.e. when the obligation expired or was
discharged or cancelled); or
•
there was a modification of the contract that was treated as a
derecognition and recognition of a new contract. This was the case
where the modified terms, if applied at inception, would have
resulted in:
–
a change in the measurement model or the applicable standard
for measuring a component of the contract;
–
a substantially different contract boundary; or
–
the contract being included in a different group of contracts.
When a modification was not treated as a derecognition, the Group
recognised amounts paid, or received, for the modification as an
adjustment to the relevant liability for remaining coverage relating
to the existing contract.
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Annual Report and Accounts 2026
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x) Presentation
As noted in Note 38a, during the year to 31 January 2025 the Group
decided to divest itself of the underwriting and claims handling
sections of its Insurance business and, therefore, they were
reclassified as discontinued operations.
The Group disaggregated the total amount recognised in the
statement of profit or loss into an insurance service result, comprising
insurance revenue and insurance service expenses, and insurance
finance income or expenses.
(a) Separate presentation of portfolios in an asset or liability position
In the statement of financial position, where applicable, the Group
separately presented the carrying amount of portfolios of insurance
contracts issued that were assets, portfolios of insurance contracts
issued that were liabilities, portfolios of reinsurance contracts
that were assets and portfolios of reinsurance contracts that
were liabilities.
(b) Changes in the risk adjustment
The Group disaggregated the change in risk adjustment for
non-financial risk between a financial and non-financial portion,
included within insurance finance expenses and the insurance service
result respectively.
(c) Reinsurance
On the face of the income statement, income or expenses from
reinsurance contracts (other than insurance finance income or
expenses) were presented as a single amount, separately from the
income or expenses from insurance contracts issued.
(d) Insurance finance income or expense
Insurance finance income or expensed comprise the change in the
carrying amount of the group of insurance contracts arising from:
•
the effect of the time value of money and changes in the time value
of money; and
•
the effect of financial risk and changes in financial risk.
This largely represented:
•
the unwind of the discounting of the liability for incurred claims;
•
the impact of changes in the discount rate used in the
measurement of the liability for incurred claims; and
•
the impact of changes in the care worker inflation assumption
used in the measurement of claims settled as periodical payment
orders (
PPOs
).
Reinsurance finance income, or expense, was the change in the
carrying value of amounts relating to reinsurance contracts arising
for the same reasons.
The Group did not disaggregate insurance finance income or
expenses between profit or loss and OCI as permitted by the standard.
xi) Transition
In adopting IFRS 17, the Group applied a full retrospective approach
to transition. Under the full retrospective approach to transition,
at 1 February 2022, the Group:
•
identified, recognised and measured each group of insurance and
reinsurance contracts as if IFRS 17 had always been applied;
•
derecognised previously reported balances that would not have
existed if IFRS 17 had always been applied (e.g. insurance
receivables and payables that, under IFRS 17, were included in the
measurement of the insurance contracts); and
•
recognised any resulting net difference in equity.
However, the Group applied a transition exemption to not disclose
previously unpublished information about claims development that
occurred earlier than five years before the end of the annual reporting
The Group provides benefits to employees (including Executive
Directors) in the form of share-based payment transactions, whereby
employees render services as consideration for equity instruments
(
equity-settled transactions
). The cost of equity-settled transactions
is measured by reference to the fair value on the grant date and is
recognised as an expense over the relevant vesting period on a
straight-line basis, ending on the date on which the employee becomes
fully entitled to the award.
Fair values of share-based payment transactions are calculated using
market price valuation modelling techniques. In valuing equity-settled
transactions, assessment is made of any vesting conditions to
categorise these into market performance conditions, non-market
performance conditions and service conditions.
Where the equity-settled transactions have market performance
conditions (that is, performance which is directly or indirectly linked
to the share price), the fair value of the award is assessed at the time
of grant and is not changed, regardless of the actual level of vesting
achieved, except where the employee ceases to be employed prior
to the vesting date.
For service conditions and non-market performance conditions,
the fair value of the award is assessed at the time of grant and is
reassessed at each reporting date to reflect updated expectations
for the level of vesting. No expense is recognised for awards that
ultimately do not vest.
At each reporting date prior to vesting, the cumulative expense is
calculated, representing the extent to which the vesting period has
expired and, in the case of non-market conditions, the best estimate
of the number of equity instruments that will ultimately vest or, in the
case of instruments subject to market conditions, the fair value on
grant adjusted only for leavers. The movement in the cumulative
expense since the previous reporting date is recognised in the income
statement, with the corresponding increase being recognised in the
share-based payments reserve.
Upon vesting of an equity instrument, the cumulative cost in the
share-based payments reserve is reclassified to retained earnings
in equity.
The dilutive effect of outstanding options is reflected as additional
During the year, the Group operated a defined benefit pension plan
that required contributions to be made to separately administered
funds. The cost of providing benefits under the defined benefit
plan was determined separately using the projected unit credit
valuation method. The defined plan was closed to future accrual
on 31 October 2021. From 1 November 2021, members moved from
active to deferred status.
Actuarial gains and losses arising in the year were credited/charged
to OCI and comprise the effects of changes in actuarial assumptions
and experience adjustments due to differences between the previous
actuarial assumptions and what actually occurred. In particular, the
difference between the interest income and the actual return on plan
assets is recognised in OCI.
Other movements in the net surplus or deficit, which include the
current service cost, any past service cost and the effect of any
curtailment or settlements, are recognised in the income statement.
Past service costs are recognised in the income statement on the
earlier of the date of plan curtailment and the date that the Group
recognises restructuring-related costs. The Group no longer incurs
any service costs or curtailment costs relating to the defined benefit
pension plan as the scheme is closed to future accrual. Interest cost,
calculated on the same basis as interest income recognised in profit
or loss on plan assets, is also charged to the income statement.
Consolidated financial statements
Notes to the consolidated financial statements
continued
2.3 Summary of material accounting policies
continued
t) Retirement benefit schemes continued
Saga plc
Annual Report and Accounts 2026
134
The defined benefit schemes are funded, with assets of the schemes
held separately from those of the Group, in separate Trustee
administered funds. Scheme assets are measured using market
values, and scheme liabilities are measured using the projected unit
actuarial method and are discounted at the current rate of return on
a high-quality corporate bond of equivalent term and currency to the
liability. Full actuarial valuations are obtained, at least triennially, and
are updated at each reporting date. The resulting defined benefit
asset or liability is presented separately on the face of the statement
of financial position. The value of a pension benefit asset is restricted
to the amount that may be recovered, either through reduced
contributions, or agreed refunds from the scheme.
For defined contribution schemes, the amounts charged to the
Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate can be made of the
amount of the obligation. The expense relating to any provision is
presented in the income statement net of any reimbursement.
If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects the risks specific
to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
A provision is recognised for onerous contracts in which the
unavoidable costs of meeting the obligations under the contract
exceed the economic benefits expected to be received under it.
The unavoidable costs reflect the least net cost of exiting the contract,
which is the lower of the cost of fulfilling it and any compensation or
penalties arising from failure to fulfil it. The costs of fulfilling a contract
comprise both the incremental costs and an allocation of other
direct costs.
A provision for restructuring is recognised when the Group has
developed a detailed restructuring plan of the business, or part of the
business concerned, and the restructuring either has commenced
or has been announced publicly. Future operating losses are not
Trade and other payables are initially recognised at fair value and
subsequently measured at amortised cost. They represent liabilities
to pay for goods or services that have been received or supplied in the
normal course of business, invoiced by the supplier before the year
The Group has ordinary shares that are classified as equity.
Incremental external costs that are directly attributable to the issue
x) Own shares
Own shares represent the shares of the Company that are held by an
Employee Benefit Trust (
EBT
). Own shares are recorded at cost and
deducted from equity. The Directors consider that, under the terms of
the contractual arrangements in place, Saga has control over the EBT.
The results and net assets of the EBT have, therefore, been included in
yet effective
The following is a list of standards, and amendments to standards, that
were in issue but not effective, or adopted, at 31 January 2026.
a) IFRS 18 ‘Presentation and Disclosures in Financial Statements’
IFRS 18 includes requirements for all entities applying IFRS for the
presentation and disclosure of information in financial statements.
IFRS 18 will replace International Accounting Standard (
IAS
) 1
‘Presentation of Financial Statements’. IFRS 18 introduces three
defined categories for income and expenses: operating, investing and
financing. This is to improve the structure of the income statement,
and requires all companies to provide new defined subtotals, including
operating profit. The standard is effective for annual reporting periods
beginning on, or after, 1 January 2027. The impact of this standard on
the Group’s financial statements is still being assessed. The standard
has been endorsed by the UK Endorsement Board.
b) Amendments to IFRS 9 and IFRS 7 regarding the classification
and measurement of financial instruments
The amendments address matters identified during the
post-implementation review of the classification and measurement
requirements of IFRS 9. The amendments are effective for annual
reporting periods beginning on, or after, 1 January 2026 and have
been endorsed by the UK Endorsement Board.
The amendments clarify that assets and liabilities should be
derecognised on the settlement date rather than the date a payment
instruction is initiated. The resulting restatement of cash balances at
31 January 2026 is expected to reduce cash and short-term deposits
by approximately £15.4m, and overdrafts by £0.3m; and to increase
trade receivables by £10.3m and reduce contract liabilities by £4.8m.
c) Annual improvements to IFRS – Volume 11
The amendments include clarifications, simplifications, corrections
and changes aimed at improving the consistency of several IFRS.
The amendments are effective for annual periods beginning on or after
1 January 2026, with earlier application permitted. The amendments
are not expected to have a material impact on the Group’s financial
statements. These improvements have been endorsed by the UK
amendments
The following is a list of standards, and amendments to standards,
that became effective, or were adopted, for the first time during the
year ended 31 January 2026.
a) Lack of exchangeability (amendments to IAS 21 ‘The Effects of
Changes in Foreign Exchange Rates’)
The amendments contain guidance to specify when a currency is
exchangeable and how to determine the exchange rate when it is not.
The amendments are effective for annual reporting periods beginning
on, or after, 1 January 2025. The amendments had no effect on the
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
135
The preparation of financial statements requires the Group to select accounting policies and make estimates and assumptions that affect items
reported in the primary consolidated financial statements and Notes to the consolidated financial statements.
The major areas of judgement used as part of accounting policy application are summarised below:
Significant judgements
Acc. policy |
Items involving judgement |
Critical accounting judgement |
2.3a) |
Revenue recognition – |
Management exercised judgement in identifying separate performance obligations arising from |
identification of |
insurance policies brokered by the Group, namely: |
|
performance obligations |
• where the insurance contract was also underwritten by the Group, the judgement that the |
|
arising from insurance |
arrangement of the insurance policy was a service (performance obligation) that was distinct |
|
policies brokered by |
from the insurance underwriting service. The revenue allocated to the arrangement |
|
the Group |
performance obligation is recognised earlier than the revenue that is allocated to the insurance |
|
underwriting service (relates to discontinued operations); and |
||
• the judgement that the option to fix the customer’s premium at renewal for insurance policies |
||
bundled with the three-year fixed-price promise is a separate performance obligation to the |
||
arrangement of the related insurance policy. This results in the deferral of a portion of revenue |
||
from policy years one and two to policy years two and three. |
||
Please refer to Note 2.3a for further information on the Group’s performance obligations relating |
||
to revenue recognition. |
||
2.3r) |
Classification of the Group’s |
This judgement was made by applying the principles of IFRS 17. |
risk transfer arrangements |
The Group’s excess of loss and funds-withheld quota share reinsurance arrangements, relating to |
|
as reinsurance contracts |
its motor underwriting line of business, were deemed to transfer significant insurance risk to the |
|
(discontinued operations) |
reinsurers. They were, therefore, classified as reinsurance contracts under IFRS 17. |
|
2.3j) |
Disposal groups and |
To be classified as held for sale, an asset must be available for immediate sale in its present |
discontinued operations |
condition, subject only to terms that are usual and customary for the sale of such assets, and the |
|
sale must be highly probable. A sale is considered to be highly probable when management is |
||
committed to a plan to sell an asset, an active programme to locate a buyer and complete the plan |
||
has been initiated, at a price that is reasonable in relation to its current fair value, and there is an |
||
expectation that the sale will be completed within one year from the date of classification. |
||
On 16 December 2024, subsidiaries of the Group entered into a share purchase agreement with |
||
Ageas (UK) Limited ( Ageas UK ) under which the Group agreed to sell to Ageas UK, and Ageas UK |
||
agreed to purchase, the entire issued share capital of Acromas Insurance Company Limited ( AICL ). |
||
At 31 January 2025, management exercised judgement in determining that the criteria for |
||
classification of the AICL disposal group as held for sale and as a discontinued operation had been met. |
||
2.3h) |
Impairment testing of |
Goodwill |
goodwill and other major |
The Group determines whether goodwill needs to be impaired at least annually, and twice-yearly |
|
classes of assets |
if indicators of impairment exist at the interim reporting date of 31 July. |
|
As a result of the impact of the General Insurance Pricing Practices ( GIPP ) market study, |
||
performed by Financial Conduct Authority ( FCA ), on trading in recent years, and against the |
||
background of a highly competitive motor insurance market, the Group saw a fall in policy volumes |
||
in the year to 31 January 2025. In the year to 31 January 2025, high net rate inflation from the |
||
Group’s underwriting panel continued to have an adverse impact on the expected future |
||
profitability of the Insurance business. In December 2024, the Group announced it had entered |
||
into a binding agreement with Ageas to establish the Affinity Partnership, which is expected to |
||
impact future cash flows of the business. Management judged these trading impacts to constitute |
||
indicators of impairment and, therefore, conducted full impairment reviews of the Insurance |
||
Broking CGU at 31 July 2024 and 31 January 2025. As a result of these reviews, management |
||
considered it necessary to impair the goodwill allocated to the Insurance Broking CGU by £138.3m |
||
at 31 July 2024 and £nil at 31 January 2025. |
||
At 31 July 2025, trading forecasts showed improved cash flows and policy volumes from those |
||
previously modelled. In addition, the Group’s pre-tax discount rate previously used for the Insurance |
||
Broking CGU fell, acting to increase the headroom in any assessment. Management considered |
||
other indicators of possible impairment set out in IAS 36 ‘Impairment of Assets’, including the |
||
economic outlook and movements in Saga’s market capitalisation. No such indicators were |
||
identified. Based on the above, management did not judge a formal goodwill impairment |
||
assessment was required at 31 July 2025. |
||
At 31 January 2026 a full goodwill impairment assessment was conducted, as required by IAS 36. |
||
The outlook and cash flows modelled for the Insurance Broking business, combined with a decrease |
||
in the pre-tax discount rate, to provide headroom against the carrying value of the goodwill balance. |
||
No impairment was, therefore, considered necessary. |
||
Property, plant and equipment |
||
In the years ended 31 January 2025 and 31 January 2026, management exercised its judgement in |
||
considering it unnecessary to conduct an impairment review of the Group’s two Ocean Cruise ships |
||
since no indicators of impairment were identified. |
||
In the year ended 31 January 2025, management exercised its judgement in relation to the |
||
impairment of plant and equipment assets and performed an impairment review of the recoverable |
||
amount of plant and equipment assets used by the Group. As a result of this review, management |
||
deemed it necessary to impair plant and equipment assets by £0.1m in the Central Costs division |
||
in the year ended 31 January 2025. Please refer to Note 17a for further detail. |
Consolidated financial statements
Notes to the consolidated financial statements
continued
2.6 Significant accounting judgements, estimates and assumptions continued
Significant judgements continued
Saga plc
Annual Report and Accounts 2026
136
Acc. policy | Items involving judgement | Critical accounting judgement |
2.3h) | Impairment testing of | In the year ended 31 January 2026, management exercised its judgement in relation to the |
continued | goodwill and other major | impairment of plant and equipment used by the Group’s Insurance Broking, and mailing and printing |
classes of assets continued | businesses, following a review of plant and equipment assets. As a result of this review, management | |
deemed it necessary to impair plant and equipment assets by £0.7m in those businesses. Please | ||
refer to Note 17a for further detail. | ||
Right-of-use assets | ||
In the years to 31 January 2025 and 31 January 2026, management exercised its judgement in | ||
considering it unnecessary to conduct an impairment review of right-of-use River Cruise ship | ||
assets, since no indicators of impairment were identified. | ||
In the year ended 31 January 2026, management exercised its judgement in relation to the | ||
impairment of right-of-use assets used by the Group’s mailing and printing business, following a | ||
review of plant and equipment assets. As a result of this review, management deemed it necessary | ||
to impair plant and equipment assets by £0.8m in that business. Please refer to Note 18a for | ||
further detail. | ||
Also, in the year ended 31 January 2026, management exercised its judgement in relation to the | ||
impairment of right-of-use assets used by the Group’s Cruise business following a review of long | ||
leasehold land and building leases. As a result of this review, management deemed it necessary to | ||
impair long leasehold land and building assets by £0.1m in that business. Please refer to Note 18a | ||
for further detail. | ||
Property assets held for sale | ||
In the years to 31 January 2025 and 31 January 2026, in light of the Group obtaining updated | ||
freehold property market valuation reports, management exercised judgement in relation to the | ||
impairment of property assets held for sale. As a consequence of the remeasurement of the | ||
properties to the lower of fair value less cost to sell and the carrying value, management concluded | ||
that a net impairment charge of £nil (2025: £0.4m) should be recognised accordingly. Please refer | ||
to Note 38b for further detail. | ||
Intangible assets | ||
In the year ended 31 January 2025, following the Group’s decision to divest itself of the underwriting | ||
and claims handling sections of its Insurance business (Note 38a), management exercised its | ||
judgement in relation to the impairment of software assets and performed an impairment review | ||
of the recoverable amount of software assets used by the Insurance Broking division. As a result | ||
of this review, management deemed it necessary to impair software assets by £21.3m in the | ||
Insurance Broking continuing operations business and by £4.0m in relation to the intangible fixed | ||
assets held by the disposal group (Note 38a). The latter impairment charge related to the software | ||
assets of the claims handling section of the Insurance business, which were impaired in full. Please | ||
refer to Note 16b for further detail. | ||
In addition, management assessed the recoverable amount of software assets at 31 January 2025 | ||
and concluded that an impairment of £2.8m was required in the Group’s Central Costs division. | ||
In the year ended 31 January 2026, management assessed the recoverable amount of software assets | ||
and concluded that an impairment of £0.3m was required in the Group’s Insurance Broking division. | ||
2.3r) | Insurance contract liabilities | Eligibility of reinsurance contracts for the PAA |
(and related reinsurance | Some of the Group’s groups of reinsurance contracts had a coverage period of more than 12 months, | |
contract assets) | including the motor quota share arrangement, which had a three-year coverage period. Management | |
(discontinued operations) | applied judgement in concluding that these groups were eligible for the PAA on the basis that, at | |
initial recognition, it expected that the measurement of the asset for remaining coverage under the | ||
PAA would not differ materially to that under the IFRS 17 general measurement model. | ||
Liability for incurred claims | ||
This judgement related to the estimation of future claims costs in relation to areas of uncertainty. | ||
It was relevant to both components of the IFRS 17 liability for incurred claims: | ||
• The estimate of the present value of future cash flows. | ||
• The risk adjustment. | ||
The approach to determining the risk adjustment within the liability for incurred claims is a key area | ||
of judgement. Under IFRS 17, the risk adjustment reflects the compensation required for bearing | ||
uncertainty about the amount and timing of the cash flows that arise from non-financial risk. | ||
The Group determined the risk adjustment at the level of each IFRS 17 portfolio of insurance | ||
contracts, the most material of which was the motor portfolio, using a confidence level technique | ||
(also referred to as a Value at Risk ( VaR ) approach). Following this approach, the total liability for | ||
incurred claims (net of reinsurance) was set at the 85% confidence level (ultimate basis), with the | ||
net risk adjustment being the difference between this total net liability for incurred claims and the | ||
net estimate of the present value of future cash flows. The gross risk adjustment was derived in a | ||
similar way, with the reinsurance risk adjustment being the difference between the gross and net | ||
risk adjustments. This approach, and in particular, the use of the 85% confidence level, resulted | ||
in a risk adjustment that met the IFRS 17 requirements as a key judgement. | ||
As the risk adjustment was determined at the level of each IFRS 17 portfolio, the confidence level | ||
referred to above did not reflect diversification of risk across these portfolios. |
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
137
Acc. policy |
Items involving judgement |
Critical accounting judgement |
2.3r) |
Insurance contract liabilities |
A further key area of judgement related to the discount rate that was applied to the estimate of |
continued |
(and related reinsurance |
future cash flows. Under IFRS 17, the discount rate used should reflect the liquidity characteristics |
contract assets) |
of the insurance liabilities. Assessing the liquidity characteristics of the liabilities requires significant |
|
(discontinued operations) |
judgement. Management concluded that cash flows relating to the liability for incurred claims were |
|
continued |
illiquid and, therefore, the discount rate should include an illiquidity premium above the risk-free rate. |
|
2.3u) |
Restructuring provision |
Management exercised judgement in identifying which costs should be included in the |
measurement of the restructuring provision. In addition, judgement is required of the best estimate |
||
of those costs. |
All estimates are based on management’s knowledge of current facts and circumstances, assumptions based on that knowledge and predictions
of future events and actions. Actual results may, therefore, differ from those estimates.
The table below sets out those items the Group considers to have a significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities, together with the relevant accounting policy.
Acc. policy |
Items involving estimation |
Sources of estimation uncertainty |
2.3a)i) |
Revenue recognition – |
The standalone selling price of the option to fix within the Group’s three-year fixed-price feature |
three-year fixed-price |
offered by the Insurance Broking division was estimated using the expected cost plus a margin |
|
product |
approach, as set out in paragraph 79 (b) of IFRS 15. |
|
An allowance was also made for the likelihood that the option will be exercised by factoring in the |
||
expected rate of renewal at the first and second renewal dates. The amount of revenue deferred |
||
upon initial recognition is, therefore, reduced to the extent that it is estimated that customers will |
||
not exercise the option because they either decide not to renew or they make a claim that releases |
||
the Group from its obligation to fix the customer price. |
||
2.3f) and |
Useful economic lives and |
The useful economic lives and residual values of software assets classified as intangible assets |
2.3i) |
residual values of software |
(Note 15) and Ocean Cruise ship assets classified as property, plant and equipment (Note 17) are |
intangible assets and |
assessed upon the capitalisation of each asset and, at each reporting date, are based upon the |
|
Ocean Cruise ships |
expected consumption of future economic benefits of the asset. Estimated residual values and |
|
useful lives are reviewed annually. Changes in the expected useful life or the expected pattern of |
||
consumption of future economic benefits embodied in the asset are considered to modify the |
||
amortisation or depreciation period or method, as appropriate, and are treated as changes in |
||
accounting estimates. In relation to the annual review of estimated residual values and useful lives |
||
of Ocean Cruise ships, potential environmental regulatory changes are also considered. |
||
2.3h) |
Goodwill impairment |
The Group determines whether goodwill needs to be impaired on an annual basis, or more |
testing |
frequently as required. This requires an estimation of the value-in-use of the CGUs to which |
|
goodwill is allocated. The value-in-use calculation requires the Group to estimate the future cash |
||
flows expected to arise from the CGUs, discounted at a suitably risk-adjusted rate to calculate |
||
present value. |
||
The impact of changes to pricing rules set by the FCA following the completion of the GIPP market |
||
study, particularly the highly competitive motor insurance market and the adverse impact on profit |
||
before tax in the prior year, and the transition to a partnership model of operation for the Insurance |
||
Broking business, increased the estimation uncertainty in the Insurance Broking CGU. The |
||
outcome of the impairment reviews conducted concluded that an impairment charge of £138.3m |
||
be recognised against the Group’s Insurance Broking CGU at 31 July 2024. No further impairment |
||
was required at 31 January 2025, 31 July 2025 or 31 January 2026. |
||
Sensitivity analysis was undertaken to determine the effect of changing the discount rate, the |
||
terminal value and future cash flows on the present value calculation, as shown in Note 16a. |
||
2.3r) |
Valuation of insurance |
Estimates of future cash flows to fulfil liabilities for incurred claims |
contract liabilities |
For insurance contracts, estimates had to be made for the expected cost of claims known but not |
|
(and related reinsurance |
yet settled (case reserves) and for the expected cost of IBNR claims, at the reporting date. It can |
|
contract assets) |
take a significant period of time before the ultimate claims cost can be established with certainty. |
|
(discontinued operations) |
The ultimate cost of incurred claims was estimated by using a range of standard actuarial claims |
|
projection techniques, such as the Chain-Ladder and Bornhuetter-Ferguson methods. The main |
||
assumption underlying these techniques was that past claims development experience can be used |
||
to project future claims development and hence ultimate claims costs. As such, these methods |
||
extrapolated the development of paid and incurred losses, average costs per claim and claim |
||
volumes based on the observed development of earlier years. Historical claims development was |
||
primarily analysed by accident year, geographical area, significant business line and peril. Additional |
||
qualitative judgement was used to assess the extent to which past trends may not have applied in |
||
the future (e.g. to reflect one-off occurrences, changes in external or market factors such as public |
||
attitudes to claiming, economic conditions, levels of claims inflation, judicial decisions and legislation, |
||
as well as internal factors such as portfolio mix, policy features and claims handling procedures) in |
||
order to arrive at the best estimate of the ultimate cost of claims. |
||
The estimate of future cash flows arising from PPO liabilities required an assumption for carer wage |
||
inflation. This assumption was set at 1.5% above the discount rate applied to liabilities for incurred |
||
claims (see overleaf). |
Consolidated financial statements
Notes to the consolidated financial statements
continued
2.6 Significant accounting judgements, estimates and assumptions continued
Significant estimates continued
Saga plc
Annual Report and Accounts 2026
138
Acc. policy |
Items involving estimation |
Sources of estimation uncertainty |
2.3r) |
Valuation of insurance |
Discount rate applied to liabilities for incurred claims |
continued |
contract liabilities |
All the Group’s liabilities for incurred claims (and related reinsurance assets) were discounted. |
(and related reinsurance |
||
contract assets) |
The determination of the discount rate applied to liabilities for incurred claims was an estimate. |
|
(discontinued operation) |
This discount rate reflected the current risk-free interest rate in the currency of the insurance |
|
continued |
liabilities, being GBP, plus an illiquidity premium. Such a discount rate was not observable and, |
|
therefore, had to be estimated. The discount rate was estimated by removing from the yield curve |
||
of a portfolio of GBP-denominated corporate bonds an estimate of the components of that yield |
||
that related to expected and unexpected credit losses. The portfolio of corporate bonds used |
||
reflected the debt securities that the Group held to support its insurance liabilities. |
||
Following this approach, the GBP discount rate curves that were applied to liabilities for incurred |
||
claims were as follows: |
1 year |
3 years |
5 years |
10 years |
20 years |
30 years |
|
31 January 2025 |
4.5% |
4.4% |
4.5% |
4.9% |
5.5% |
5.6% |
The sensitivity of this assumption is shown in Note 20a(iii). |
||
Risk adjustment |
||
The confidence level technique used by the Group to determine the risk adjustment required |
||
estimation of the probability distribution of the present value of future cash flows arising from |
||
liabilities for incurred claims, including estimates of possible favourable and unfavourable outcomes. |
||
These probability distributions were estimated both gross and net of reinsurance. |
||
2.3t) |
Valuation of pension |
The cost of defined benefit pension plans, and the present value of the pension obligation, are |
benefit obligation |
determined using actuarial valuations. Actuarial valuations involve making assumptions about |
|
discount rates, expected rates of return on assets, future salary increases, mortality rates and |
||
future pension increases. Due to the complexity of the valuation, the underlying assumptions and |
||
its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. |
||
All assumptions are reviewed at each reporting date. |
||
All significant assumptions and estimates involved in arriving at the valuation of the pension scheme |
||
obligation are set out in Note 27. |
||
2.3u) |
Valuation of restructuring |
The Group recognises a restructuring provision when a detailed plan identifies the business, or |
provision |
part of the business concerned, together with the location and number of employees affected. |
|
This requires detailed estimation of the associated costs, the timeline of the restructuring |
||
programme and the employees affected. |
For management purposes, the Group is organised into business units based on their products and services. The Group has three reportable
operating segments as follows:
•
Travel:
comprises the operation and delivery of Ocean and River Cruise holidays (
Cruise
), as well as package tour and other holiday
products (
Holidays
). The Group owns and operates two Ocean Cruise ships. All other holiday and River Cruise products are packaged
together with third-party supplied accommodation, flights and other transport arrangements. The segment is analysed into three
product sub-segments:
–
Ocean Cruise
–
River Cruise
–
Holidays
•
Insurance:
comprises the provision of general insurance products.
Insurance Broking segment revenue is derived primarily from insurance broking and commission receivable in connection with the sale or
renewal of insurance policies.
The results of the Group’s underwriting and claims handling businesses have been classified as discontinued operations following the disposal
of the Group’s Insurance Underwriting business and are no longer shown in the tables overleaf (see Note 38a for further details).
•
Other Businesses and Central Costs:
comprises the Group’s other businesses and its central cost base. The other businesses primarily
include Saga Money (the personal finance product offering), Saga Publishing, and the Group’s mailing and printing business, CustomerKNECT.
Segment performance is evaluated using the Group’s key performance measure of Underlying Profit Before Tax
5
. Items not included within a
specific segment relate to transactions that do not form part of the ongoing segment performance or are managed at a Group level.
All revenue is generated solely in the UK.
Transfer prices between operating segments are set on an arm’s-length basis, in a manner similar to transactions with third parties. Segment
income, expenses and results include transfers between business segments that are then eliminated on consolidation.
Goodwill, bonds, the term loan and the loan facility provided by Roger De Haan are not included within segments as they are managed on a
5
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
139
Other |
||||||||
Travel |
Businesses |
|||||||
Ocean |
River |
Insurance |
and Central |
|||||
Cruise |
Cruise |
Holidays |
Total |
Broking |
Costs |
Adjustments |
Total |
|
2026 |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
Continuing operations |
||||||||
Revenue |
264.0 |
53.1 |
184.0 |
501.1 |
139.9 |
24.8 |
(5.8) |
660.0 |
Cost of sales |
(152.0) |
(36.4) |
(138.1) |
(326.5) |
(1.7) |
(13.1) |
0.2 |
(341.1) |
Gross profit/(loss) |
112.0 |
16.7 |
45.9 |
174.6 |
138.2 |
11.7 |
(5.6) |
318.9 |
Administrative and selling expenses |
(31.5) |
(11.1) |
(36.3) |
(78.9) |
(128.0) |
(52.2) |
5.3 |
(253.8) |
Impairment of non-financial assets |
(0.1) |
– |
– |
(0.1) |
(0.4) |
– |
– |
(0.5) |
Investment income |
– |
0.5 |
1.5 |
2.0 |
1.0 |
13.1 |
(10.0) |
6.1 |
Finance costs |
(16.0) |
(2.1) |
(0.2) |
(18.3) |
– |
(50.6) |
0.3 |
(68.6) |
Profit/(loss) before tax |
64.4 |
4.0 |
10.9 |
79.3 |
10.8 |
(78.0) |
(10.0) |
2.1 |
Reconciliation to Underlying |
||||||||
Profit/(Loss) Before Tax 6 |
||||||||
Profit/(loss) before tax |
64.4 |
4.0 |
10.9 |
79.3 |
10.8 |
(78.0) |
(10.0) |
2.1 |
Net fair value loss/(gain) on derivative |
0.7 |
(0.1) |
0.1 |
0.7 |
– |
– |
– |
0.7 |
financial instruments |
||||||||
Impairment of non-financial assets |
0.1 |
– |
– |
0.1 |
0.4 |
1.4 |
– |
1.9 |
Amortisation of fees and costs |
– |
– |
– |
– |
– |
7.6 |
– |
7.6 |
relating to the Group’s previous |
||||||||
corporate debt |
||||||||
Restructuring costs |
– |
– |
2.3 |
2.3 |
0.1 |
19.1 |
– |
21.5 |
Foreign exchange movement on |
– |
0.8 |
– |
0.8 |
– |
– |
– |
0.8 |
River Cruise lease liabilities |
||||||||
Affinity Partnership transition |
– |
– |
– |
– |
13.9 |
– |
– |
13.9 |
Release of deferred revenue on |
– |
– |
– |
– |
(7.0) |
– |
– |
(7.0) |
three-year fixed-price product |
||||||||
Onerous contract provision |
– |
– |
– |
– |
(1.3) |
– |
– |
(1.3) |
Modification of Travel breakage policy |
1.6 |
0.3 |
0.7 |
2.6 |
– |
– |
– |
2.6 |
Ocean Cruise dry dock costs |
0.5 |
– |
– |
0.5 |
– |
– |
– |
0.5 |
IFRS 16 lease accounting adjustment |
– |
0.9 |
– |
0.9 |
– |
– |
– |
0.9 |
on River Cruise vessels |
||||||||
Underlying Profit/(Loss) Before Tax 6 |
67.3 |
5.9 |
14.0 |
87.2 |
16.9 |
(49.9) |
(10.0) |
44.2 |
6
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Consolidated financial statements
Notes to the consolidated financial statements
continued
3 Segmental information continued
Saga plc
Annual Report and Accounts 2026
140
Other | ||||||||
Travel | Businesses | |||||||
Ocean | River | Insurance | and Central | |||||
Cruise | Cruise | Holidays | Total | Broking | Costs | Adjustments | Total | |
2025 (re-presented 7 ) | £m | £m | £m | £m | £m | £m | £m | £m |
Continuing operations | ||||||||
Revenue | 236.7 | 49.4 | 167.8 | 453.9 | 114.4 | 24.6 | (4.6) | 588.3 |
Cost of sales | (140.6) | (33.3) | (126.1) | (300.0) | – | (8.8) | – | (308.8) |
Gross profit/(loss) | 96.1 | 16.1 | 41.7 | 153.9 | 114.4 | 15.8 | (4.6) | 279.5 |
Administrative and selling expenses | (30.5) | (11.0) | (33.8) | (75.3) | (119.8) | (43.1) | 4.6 | (233.6) |
Impairment of non-financial assets | – | – | – | – | (21.3) | (3.2) | (138.3) | (162.8) |
Gain on lease modification | – | – | – | – | – | 0.2 | – | 0.2 |
Net profit on disposal of property, | – | – | 0.9 | 0.9 | – | – | – | 0.9 |
plant and equipment | ||||||||
Investment income | – | 0.5 | 1.0 | 1.5 | 0.9 | 3.7 | – | 6.1 |
Finance costs | (18.4) | (1.5) | (0.3) | (20.2) | – | (30.3) | – | (50.5) |
Profit/(loss) before tax | 47.2 | 4.1 | 9.5 | 60.8 | (25.8) | (56.9) | (138.3) | (160.2) |
Reconciliation to Underlying | ||||||||
Profit/(Loss) Before Tax 8 | ||||||||
Profit/(loss) before tax | 47.2 | 4.1 | 9.5 | 60.8 | (25.8) | (56.9) | (138.3) | (160.2) |
Net fair value loss on derivative | – | – | 0.3 | 0.3 | – | – | – | 0.3 |
financial instruments | ||||||||
Impairment of Insurance | – | – | – | – | – | – | 138.3 | 138.3 |
Broking goodwill | ||||||||
Impairment of non-financial assets | – | – | – | – | 21.3 | 3.2 | – | 24.5 |
Amortisation of fees and costs | – | – | – | – | – | 3.5 | – | 3.5 |
on Roger De Haan loan facility | ||||||||
Restructuring costs | – | – | 0.9 | 0.9 | 18.2 | 9.3 | – | 28.4 |
Foreign exchange movement on | – | (0.6) | – | (0.6) | – | – | – | (0.6) |
River Cruise lease liabilities | ||||||||
Onerous contract provision | – | – | – | – | (1.8) | – | – | (1.8) |
Profit share on cessation of private | – | – | – | – | 2.6 | – | – | 2.6 |
medical insurance ( PMI ) contract | ||||||||
Ocean Cruise customer compensation | 1.7 | – | – | 1.7 | – | – | – | 1.7 |
and dry dock costs | ||||||||
IFRS 16 lease accounting adjustment | – | 0.5 | – | 0.5 | – | – | – | 0.5 |
on River Cruise vessels | ||||||||
Underlying Profit/(Loss) Before Tax 8 | 48.9 | 4.0 | 10.7 | 63.6 | 14.5 | (40.9) | – | 37.2 |
Analysis of total assets less liabilities by segment:
2026 | 2025 | |
£m | £m | |
Travel | 91.8 | 129.1 |
Insurance | (55.9) | 9.8 |
Other Businesses and Central Costs | 152.2 | 38.1 |
Adjustments | (118.4) | (119.3) |
69.7 | 57.7 |
Discontinued operations assets and liabilities held for sale (Note 38a) are included within the Insurance segment total assets less liabilities
figure above.
7
The comparative information for the year to 31 January 2025 has been re-presented from that previously published due to the Group’s decision to divest itself of the underwriting
and claims handling sections of its Insurance business
8
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
141
Total assets less liabilities detailed as adjustments relates to the following unallocated items:
2026 |
2025 |
|
£m |
£m |
|
Goodwill (Note 14) |
206.4 |
206.4 |
Bonds, term loan and the loan facility provided by Roger De Haan |
(324.8) |
(325.7) |
(118.4) |
(119.3) |
The following table provides a disaggregation of the Group’s revenue by major product line, analysed by its core operating segments.
| 2026 |
||||
Other |
||||
Businesses |
||||
and Central |
||||
Travel |
Insurance |
Costs |
Total |
|
Major product lines |
£m |
£m |
£m |
£m |
Continuing operations |
||||
Ocean Cruise |
264.0 |
264.0 |
||
River Cruise |
53.1 |
53.1 |
||
Holidays |
184.0 |
184.0 |
||
Motor broking |
52.9 |
52.9 |
||
Home broking |
39.4 |
39.4 |
||
Other broking |
47.6 |
47.6 |
||
Money |
6.1 |
6.1 |
||
Publishing and CustomerKNECT |
11.3 |
11.3 |
||
Other |
1.6 |
1.6 |
||
501.1 |
139.9 |
19.0 |
660.0 |
|
| 2025 |
||||
Other |
||||
Businesses |
||||
and Central |
||||
Travel |
Insurance |
Costs |
Total |
|
Major product lines |
£m |
£m |
£m |
£m |
Continuing operations |
||||
Ocean Cruise |
236.7 |
236.7 |
||
River Cruise |
49.4 |
49.4 |
||
Holidays |
167.8 |
167.8 |
||
Motor broking |
45.9 |
45.9 |
||
Home broking |
31.8 |
31.8 |
||
Other broking |
36.7 |
36.7 |
||
Money |
5.6 |
5.6 |
||
Publishing and CustomerKNECT |
13.9 |
13.9 |
||
Other |
0.5 |
0.5 |
||
453.9 |
114.4 |
20.0 |
588.3 |
|
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
142
4 Revenue from contracts with customers balances
a) Contract balances
The following table provides information about contract assets and contract liabilities from contracts with customers as accounted for under
IFRS 15 (the amounts stated here are not insurance acquisition cash flow assets accounted for under IFRS 17):
2026 |
2025 |
|
£m |
£m |
|
Contract cost assets (Note 23) |
8.1 |
4.9 |
Contract liabilities (Note 29) |
252.2 |
176.8 |
The contract cost assets relate to commissions paid to price-comparison websites to acquire new business policies not underwritten by
the Group.
Management expects that incremental commission fees paid to price-comparison websites, as a result of obtaining insurance contracts,
are recoverable. The Group has, therefore, capitalised them as contract assets amounting to £5.4m for the year ended 31 January 2026
(2025: £2.0m). These fees are amortised over the period of the expected renewal cycle. In the year to 31 January 2026, the amount of
amortisation was £2.2m (2025: £2.3m) and there was no impairment loss in relation to the costs capitalised.
Applying the practical expedient in paragraph 94 of IFRS 15, the Group recognises the incremental costs of obtaining contracts as an expense
when incurred if the amortisation period of the assets that the Group otherwise would have recognised is one year or less.
The contract liabilities primarily relate to the deferral of revenue for performance obligations not satisfied, at 31 January, and comprise the
advance consideration received from customers for holidays or cruises booked, but not travelled; insurance premium street pricing
adjustments and revenues received in advance of the cover start date (where the policy was not underwritten by the Group); and motor and
home insurance Affinity Partnership consideration received from Ageas (Note 38a). There was no revenue recognised in the current reporting
year that related to performance obligations that were satisfied in a prior year.
Significant changes in the contract cost assets and the contract liabilities during the year are as follows:
2026 |
2025 |
|||
Contract cost |
Contract |
Contract cost |
Contract |
|
assets |
liabilities |
assets |
liabilities |
|
£m |
£m |
£m |
£m |
|
Balance at 1 February |
4.9 |
176.8 |
3.6 |
159.8 |
Released to the income statement in the period |
(2.2) |
(422.8) |
(2.3) |
(395.4) |
Additional contract balances incurred during the year |
5.4 |
514.5 |
2.0 |
435.4 |
Amounts refunded to customers |
– |
(16.3) |
– |
(23.5) |
Amounts reclassified to assets/liabilities held for sale |
– |
– |
1.6 |
0.5 |
Balance at 31 January |
8.1 |
252.2 |
4.9 |
176.8 |
b) Transaction price allocated to the remaining performance obligations
At 31 January 2025, the transaction price allocated to three-year fixed-price insurance policy renewal options, where the remaining
performance obligations were not expected to be satisfied within the next 12 months, was £1.2m. This was expected to be recognised as revenue
in the subsequent one to two years. Following the Group’s disposal of the underwriting and claims handling sections of its Insurance business
(Note 38a) and migration of policies to Ageas, as at 31 January 2026, the remaining performance obligations not expected to be satisfied within
the next 12 months is £nil.
The transaction price allocated to customer contracts within the Travel segment, where the remaining performance obligations are not
expected to be satisfied within the next 12 months, is £8.9m (2025: £3.8m). This is expected to be recognised as revenue in the subsequent
one to two years.
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining performance
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
143
2026 |
2025 |
|
£m |
£m |
|
Continuing operations |
||
Staff costs (excluding restructuring costs) |
84.0 |
86.5 |
Marketing and fulfilment costs |
63.6 |
46.8 |
Short-term lease rentals |
– |
0.1 |
Auditor’s remuneration |
2.0 |
2.1 |
Other administrative costs |
59.1 |
66.6 |
Depreciation – property, plant and equipment (Note 17) |
0.9 |
0.7 |
Depreciation – right-of-use assets (Note 18) |
1.2 |
2.2 |
Amortisation of intangible assets (Note 15) |
6.7 |
8.7 |
Restructuring costs |
35.4 |
18.1 |
252.9 |
231.8 |
Administrative and selling expenses relate to non-Insurance Underwriting businesses.
2026 |
2025 |
|
£m |
£m |
|
Audit of the parent company and consolidated financial statements |
0.8 |
0.8 |
Audit of subsidiary financial statements |
1.0 |
1.0 |
Audit-related assurance services |
0.2 |
0.3 |
Auditor’s remuneration relating to continuing operations |
2.0 |
2.1 |
Auditor’s remuneration relating to discontinued operations |
– |
0.6 |
Total auditor’s remuneration |
2.0 |
2.7 |
a) Impairments during the year ended 31 January 2026
During the year ended 31 January 2026, the Group impaired software in its Insurance Broking division by £0.3m. This was charged to
administrative and selling expenses.
Furthermore, the Group concluded that an impairment charge of £0.7m (Note 17) to plant and equipment owned assets was required in the
Group’s Insurance Broking and mailing and printing divisions. This was charged to administrative and selling expenses (£0.1m) and cost of
sales (£0.6m).
In addition, the Group concluded that an impairment charge of £0.8m (Note 18) to plant and equipment right-of-use assets leases was required
in the Group’s mailing and printing business and an impairment charge of £0.1m (Note 18) to long leasehold land and building right-of-use assets
leases was required in the Group’s Cruise business. This was charged to cost of sales (£0.8m) and administrative and selling expenses (£0.1m)
respectively.
b) Impairments during the year ended 31 January 2025
During the year ended 31 January 2025, the Group impaired the carrying value of the goodwill balance allocated to the Insurance Broking CGU
by £138.3m (Note 14).
The Group impaired software in its Insurance and Central Costs divisions by £25.3m and £2.8m respectively, totalling £28.1m (Note 15).
Of the impairment in Insurance, £4.0m related to the claims handling section of the Insurance business to be divested of (Note 38a) and,
therefore, it was reclassified as discontinued operations within the income statement.
Furthermore, the Group concluded that an impairment charge of £0.1m (Note 17) to plant and equipment owned assets was required in the
Group’s Central Costs division.
In light of the Group obtaining updated freehold property market valuation reports, management also impaired assets held for sale by £0.4m
(Note 38b). Within this total, £0.1m related to the underwriting section of the Insurance business to be divested of (Note 38a) and, therefore,
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
144
2026 |
2025 |
|
£m |
£m |
|
Continuing operations |
||
Interest income recognised using the EIR method on FVTPL financial assets |
5.7 |
6.0 |
Interest income earned on financial assets measured at amortised cost |
0.4 |
0.1 |
6.1 |
6.1 |
2025 |
||
2026 |
(re-presented 9 ) |
|
£m |
£m |
|
Continuing operations |
||
Interest, fees and charges on debt and borrowings using the EIR method |
63.3 |
45.8 |
Net fair value loss on derivative financial instruments |
0.7 |
0.3 |
Net finance costs on retirement benefit schemes |
2.1 |
2.3 |
Net interest and finance charges payable on lease liabilities |
2.5 |
2.1 |
68.6 |
50.5 |
Amounts charged to the income statement for the year are as follows:
2026 |
2025 |
|
£m |
£m |
|
Continuing operations |
||
Wages and salaries |
86.3 |
90.7 |
Social security costs |
9.7 |
8.6 |
Pension costs (Note 27) |
4.5 |
4.5 |
100.5 |
103.8 |
|
Discontinued operations |
||
Wages and salaries |
4.6 |
13.6 |
Social security costs |
0.6 |
1.3 |
Pension costs (Note 27) |
0.3 |
0.7 |
5.5 |
15.6 |
|
Total staff costs |
106.0 |
119.4 |
restructuring provision costs of £nil (2025: £16.5m). Further details can be found in Note 36 for share-based payments and Note 31 for the
restructuring provision.
For the year ended 31 January 2026, continuing operations wages and salaries above includes a £1.4m charge for cash-settled share-based
remuneration relating to the Saga Transformation Plan (
STP
) scheme (Note 36) which is due to be paid in cash in the year ended 31 January
2028. Although these awards form part of the STP scheme, they do not fall within the scope of IFRS 2 ‘Share-based Payment’.
Average monthly number of employees:
2026 |
2025 |
|
number |
number |
|
Travel |
646 |
1,151 |
Insurance |
906 |
940 |
Other Businesses and Central Costs |
374 |
380 |
Continuing operations |
1,926 |
2,471 |
Employees attributable to discontinued operations |
155 |
391 |
Total employee numbers |
2,081 |
2,862 |
In May 2024, the Group disposed of Saffron Maritime Limited. This company provided, and continues to provide, crewing services to the Ocean
Cruise business. The impact of this on the total employee numbers reported above is that, after May 2024, crew members were no longer
employees of the Group. This has resulted in a significant decrease in the average monthly number of employees reported for the Travel business
Finance costs for the prior year have been re-presented to include arrangement, drawdown and milestone fees associated with the loan facility provided by Roger De Haan (Note 30)
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
145
The information required by the Companies Act 2006 and the UK Listing Rules of the FCA is contained on pages 80-107 in the Directors’
Remuneration Report.
Compensation of key management personnel of the Group
Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities
of the Group and comprise the Directors of the Company and the Operating Board.
The amounts recognised as an expense during the financial year in respect of key management personnel are as follows:
2026 |
2025 |
|
£m |
£m |
|
Short-term benefits |
7.6 |
6.2 |
Termination costs |
0.1 |
– |
Post-employment benefits |
0.1 |
0.1 |
Share-based payments |
1.0 |
1.2 |
8.8 |
7.5 |
The major components of the income tax (credit)/expense are:
2026 |
2025 |
|
£m |
£m |
|
Continuing operations |
||
Consolidated income statement |
||
Current income tax |
||
Current income tax credit |
(2.2) |
(0.5) |
Adjustments in respect of previous years |
0.2 |
0.9 |
(2.0) |
0.4 |
|
Deferred tax |
||
Relating to origination and reversal of temporary differences |
– |
19.0 |
Adjustments in respect of previous years |
– |
(0.9) |
– |
18.1 |
|
Tax (credit)/expense in the income statement relating to continuing operations |
(2.0) |
18.5 |
Reconciliation of income tax (credit)/expense to loss before tax, multiplied by the UK corporation tax rate:
2026 |
2025 |
|
£m |
£m |
|
Continuing operations |
||
Profit/(loss) before tax from continuing operations |
2.1 |
(160.2) |
Tax at rate of 25.0% (2025: 25.0%) |
0.5 |
(40.1) |
Adjustments in respect of previous years |
0.2 |
– |
Expenses not deductible for tax purposes: |
||
Effect of Ocean Cruise business being in tonnage tax regime |
(16.1) |
(11.8) |
Impairment of goodwill |
– |
34.6 |
Corporation tax losses not recognised |
13.8 |
27.9 |
Other deferred tax assets and liabilities not recognised |
(2.2) |
6.5 |
Other non-deductible expenses/non-taxed income |
1.8 |
1.4 |
Tax (credit)/expense in the income statement relating to continuing operations |
(2.0) |
18.5 |
The Group’s tax credit relating to continuing operations for the year was £2.0m (2025: £18.5m expense) representing a tax effective rate of
negative 95.3% before the impairment of goodwill of £nil (2025: negative 84.5%). In both the current and prior years, the difference between the
Group’s tax effective rate and the standard rate of corporation tax was mainly due to the Group’s Ocean Cruise business being in the tonnage tax
regime. In addition, it is also due to £138.3m (2025: £111.6m) of corporation tax losses carried forward at the end of the financial year not being
considered recoverable and, therefore, no deferred tax asset was recognised for these losses.
Adjustments in respect of previous years include an adjustment for the over-provision of tax in prior years of £0.2m (2025: £nil).
Consolidated financial statements
Notes to the consolidated financial statements
continued
10 Income tax continued
Saga plc
Annual Report and Accounts 2026
146
Consolidated income statement |
||
(continuing operations) |
||
2026 |
2025 |
|
£m |
£m |
|
Excess of depreciation over capital allowances |
– |
5.9 |
Short-term temporary differences: |
||
– Designated hedges recognised through OCI |
– |
– |
– Share-based payment reserve |
– |
2.3 |
– General bad debt provision |
– |
1.0 |
– Capitalised borrowing costs |
– |
(2.5) |
– IFRS 16 transition adjustments |
– |
1.8 |
– Losses carried forward |
– |
9.7 |
– Other |
– |
(0.1) |
Deferred tax expense |
– |
18.1 |
Reconciliation of net deferred tax assets:
2026 |
2025 |
|
£m |
£m |
|
At 1 February |
– |
34.8 |
Tax expense recognised in the income statement from continuing operations |
– |
(18.1) |
Tax expense recognised in OCI from continuing operations |
– |
(12.3) |
Deferred tax expense attributable to discontinued operations |
– |
(4.8) |
Amounts transferred to assets held for sale |
– |
0.4 |
At 31 January |
– |
– |
The Group has tax losses which arose in the UK of £138.3m (2025: £111.6m) that are available indefinitely for offsetting against future taxable
profits of the continuing operations of the Group. Deferred tax assets have not been recognised in respect of these losses as management have
assessed there are less likely than not to be sufficient future taxable profits to utilise these tax losses. The tax losses have arisen due to the
Group’s Ocean Cruise business being in the tonnage tax regime and thus excluded from corporate tax, meaning that taxable profits in the
Group’s non-Ocean Cruise businesses would be required to recognise deferred tax assets, and there are no other tax planning opportunities or
other evidence of recoverability in the near future. In addition, all other net timing differences were considered not to be recoverable, therefore
no deferred tax assets have been recognised in respect of the continuing business at 31 January 2026 (2025: none), for the same reason that
deferred tax assets were not recognised on tax losses. If the Group were able to recognise all unrecognised deferred tax assets then profit for
the year would be £2.2m lower (2025: £34.4m higher) and movements through OCI would be £1.2m lower (2025: £10.8m higher).
The Group is in scope of the Pillar Two rules because its consolidated revenue exceeded the annual €750m threshold in two of the last four
financial years. The Group has applied the mandatory deferred tax exemption as prescribed by the International Accounting Standards Board’s
amendments to IAS 12 ‘Income Taxes’. A significant amount of the Group’s profits are within the charge to tonnage tax and, therefore, the Group
The Board of Directors does not recommend the payment of a final dividend for the 2025/26 financial year (2025: nil pence per share). For the
current and prior year, no interim or final dividends were declared, or paid, during the year.
The distributable reserves of Saga plc are £239.9m at 31 January 2026, which are equal to the retained earnings reserve. If necessary, its
subsidiary companies hold significant reserves from which a dividend could be paid. Subsidiary distributable reserves are available immediately,
with the exception of companies within the River Cruise and Holidays businesses, which require regulatory approval before any dividends can be
declared and paid. Under the terms of the Ocean Cruise ship debt facilities, dividends remain restricted until the ship debt principal repayments
that were deferred as part of the ship debt repayment holiday are fully repaid (Note 30). In addition, under the terms of the RCF and the term
loan facility provided by certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed, advised or
controlled by HPS Investment Partners, LLC or its subsidiaries (
HPS Funds
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Annual Report and Accounts 2026
147
Basic earnings/(loss) per share is calculated by dividing the loss after tax for the year attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the period. Diluted loss per share is calculated by also including the weighted
average number of ordinary shares that would be issued on conversion of all potentially dilutive options.
There were no other transactions involving ordinary shares, or potential ordinary shares, between the reporting date and the date of
authorisation of these financial statements.
The calculation of basic and diluted earnings/(loss) per share is as follows:
2026 |
2025 |
|
£m |
£m |
|
Profit/(loss) attributable to ordinary equity holders |
3.6 |
(164.9) |
Profit/(loss) from continuing operations |
4.1 |
(178.7) |
Weighted average number of ordinary shares |
’m |
’m |
Ordinary shares at 1 February |
140.5 |
139.8 |
Deferred Bonus Plan ( DBP ) share options exercised |
0.3 |
0.2 |
Restricted Share Plan ( RSP ) share options exercised |
1.2 |
0.5 |
Other share options exercised |
0.4 |
– |
Weighted average number of ordinary shares for basic earnings/(loss) per share |
142.4 |
140.5 |
Dilutive options |
||
DBP share options not yet vested |
1.1 |
– |
RSP share options not yet vested |
3.6 |
– |
Weighted average number of ordinary shares for diluted earnings/(loss) per share |
147.1 |
140.5 |
Basic earnings/(loss) per share |
2.5p |
(117.4p) |
Basic earnings/(loss) per share from continuing operations |
2.9p |
(127.2p) |
Diluted earnings/(loss) per share |
2.4p |
(117.4p) |
Diluted earnings/(loss) per share from continuing operations |
2.8p |
(127.2p) |
The table below reconciles between basic earnings/(loss) per share and Underlying Basic Earnings Per Share
10
:
2026 |
2025 |
|
Basic earnings/(loss) per share |
2.5p |
(117.4p) |
Adjusted for: |
||
Net fair value loss on derivative financial instruments |
0.5p |
0.3p |
Impairment of Insurance Broking goodwill |
– |
98.4p |
Impairment of other non-financial assets |
1.3p |
25.6p |
Onerous contract provision |
2.1p |
(12.3p) |
Profit share on cessation of PMI contract |
– |
2.2p |
Amortisation of fees and costs relating to the Group’s previous corporate debt |
5.3p |
3.0p |
Loss on disposal of subsidiaries |
9.6p |
– |
Affinity Partnership transition |
9.8p |
– |
Release of deferred revenue on three-year fixed-price product |
(4.9p) |
– |
Write-off of written to earned adjustment |
(2.5p) |
– |
Foreign exchange movement on River Cruise lease liabilities |
0.6p |
(0.5p) |
Fair value gains on debt securities |
(1.5p) |
(4.3p) |
Changes in underwriting discount rates on non-PPO liabilities |
0.1p |
(0.5p) |
Restructuring costs |
15.3p |
26.9p |
Modification of Travel breakage policy |
1.9p |
– |
Ocean Cruise customer compensation and dry dock costs |
0.4p |
1.4p |
IFRS 16 lease accounting adjustment on River Cruise vessels |
0.6p |
0.4p |
Underlying Basic Earnings Per Share 10 |
41.1p |
23.2p |
10
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
148
Please see Note 38a for disposals during the year ended 31 January 2026.
b) Disposals during the year ended 31 January 2025
Goodwill |
|
£m |
|
Cost |
|
At 1 February 2024 |
1,458.4 |
At 31 January 2025 and 31 January 2026 |
1,458.4 |
Impairment |
|
At 1 February 2024 |
1,113.7 |
Charge for the year (Note 16a) |
138.3 |
At 31 January 2025 and 31 January 2026 |
1,252.0 |
Net book value |
|
At 31 January 2026 |
206.4 |
At 31 January 2025 |
206.4 |
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Saga plc
Annual Report and Accounts 2026
149
Software |
|
£m |
|
Cost |
|
At 1 February 2024 |
118.1 |
Additions and internally developed software |
12.1 |
Reclassification to assets held for sale |
(12.8) |
At 31 January 2025 |
117.4 |
Additions and internally developed software |
6.0 |
Disposals |
(14.7) |
Reclassification from assets held for sale |
12.0 |
At 31 January 2026 |
120.7 |
Amortisation and impairment |
|
At 1 February 2024 |
57.4 |
Amortisation |
10.4 |
Impairment of assets (Note 16b) |
28.1 |
Reclassification to assets held for sale |
(12.8) |
At 31 January 2025 |
83.1 |
Amortisation |
6.8 |
Disposals |
(14.5) |
Impairment of assets (Note 16b) |
0.3 |
Reclassification from assets held for sale |
12.0 |
At 31 January 2026 |
87.7 |
Net book value |
|
At 31 January 2026 |
33.0 |
At 31 January 2025 |
34.3 |
The net book value of software at 31 January 2026 included internally generated software of £9.4m (2025: £9.7m) relating to Guidewire
(the Group’s Insurance Broking, policy administration and billing platform), including additions in the year of £1.5m (2025: £10.6m) and
amortisation and impairment of £1.8m (2025: £27.3m). The comparative net book value was stated as £3.4m in the prior period. This change has
no effect on the amounts in the table above. The cumulative cost, and amortisation and impairment, of Guidewire software assets is £50.4m
(2025: £48.9m) and £41.0m (2025: £39.2m) respectively. The Guidewire platform has an expected useful economic life of 13 years, with five
years of phase one expenditure remaining at 31 January 2026. In the prior year, following the Group’s decision to divest itself of the underwriting
and claims handling sections of its Insurance business (Note 38a), management performed an impairment review of software assets used by the
Insurance Broking division. The outcome of the impairment review concluded that an impairment charge of £21.3m be recognised against the
Group’s software assets at 31 January 2025, in relation to the Guidewire platform.
The net book value of software at 31 January 2026 also included internally generated software of £1.2m (2025: £1.4m) relating to Tigerbay
(the Group’s travel booking reservation system) including additions in the year of £nil (2025: £nil) and amortisation and impairment of £0.2m
(2025: £0.3m). The cumulative cost, and amortisation and impairment, of Tigerbay software assets is £13.9m (2025: £13.9m) and £12.7m
(2025: £12.5m) respectively. The Tigerbay platform has an expected useful economic life of 10 years, with three years of phase one expenditure
remaining at 31 January 2026. Implementation, and the commencement of amortisation of the Tigerbay platform, is on a phased basis, based
on product re-platforming, and began in the year ended 31 January 2020.
2026 |
2025 |
|
£m |
£m |
|
Cost of sales |
0.1 |
0.1 |
Administrative and selling expenses (Note 5) |
6.7 |
8.7 |
Continuing operations |
6.8 |
8.8 |
Discontinued operations |
– |
1.6 |
6.8 |
10.4 |
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
150
a) Goodwill
Goodwill acquired through business combinations has been allocated to CGUs for the purpose of impairment testing. The carrying value of
goodwill by CGU is as follows:
2026 |
2025 |
|
£m |
£m |
|
Insurance Broking |
206.4 |
206.4 |
206.4 |
206.4 |
The Group tests all goodwill balances for impairment at least annually, and twice-yearly if indicators of impairment exist at the interim reporting
date of 31 July. The impairment test compares the recoverable amount of each CGU to the carrying value of its net assets including the value of
the allocated goodwill.
As a result of the impact of the FCA’s GIPP market study on trading in recent years, and against the background of a highly competitive motor
insurance market, the Group saw a fall in policy volumes in the year to 31 January 2025. In the year to 31 January 2025, high net rate inflation
from the Group’s underwriting panel continued to have an adverse impact on the expected future profitability of the Insurance business.
In December 2024, the Group announced it had entered into a binding agreement with Ageas, to establish the Affinity Partnership, which is
expected to impact future cash flows of the business. Management considered these trading impacts to constitute indicators of impairment
and, therefore, conducted full impairment reviews of the Insurance Broking CGU at 31 July 2024 and 31 January 2025. At 31 July 2024, the
Group determined that the recoverable amount of the goodwill was below the carrying value, and so the Directors took the decision to impair the
goodwill by £138.3m, based on a probability-weighted assessment of the base and stressed forecast cash flows modelled.
At the assessment conducted at 31 January 2025, forecast cash flows consistent with the latest five-year plan and further stress tests were
modelled. After applying a probability weighting to the base and stressed forecast cash flows modelled, management concluded that no further
impairment of goodwill was required at 31 January 2025, leaving the total impairment charge for the year at £138.3m.
At 31 July 2025, trading forecasts showed improved cash flows and policy volumes from those modelled at the assessment conducted at
31 January 2025. In addition, the Group’s pre-tax discount rate previously used for the Insurance Broking CGU had improved. The decrease in
the pre-tax discount rate acted to increase the headroom in any assessment. The long-term outlook for inflation stood at 2%, consistent with the
Terminal Growth rate assumption for the business modelled at 31 January 2025 and at 31 July 2024. Management considered other indicators
of possible impairment set out in IAS 36, including the economic outlook and movements in Saga’s market capitalisation. No such indicators were
identified. Based on the above, management did not believe a formal goodwill impairment assessment was required at 31 July 2025.
At the assessment conducted at 31 January 2026, the recoverable amount of the Insurance Broking CGU was determined based on a
value-in-use calculation using nominal cash flow projections from the Group’s latest five-year financial forecasts to 2030/31, which were derived
using past experience of the Group’s trading, combined with the anticipated impact of changes in macroeconomic and regulatory factors and
the expected impact of the transition to the Affinity Partnership. A terminal value was calculated using the Gordon Growth Model based on the
fifth year of those projections and a terminal growth rate calculated using an assumption of 2.0% (July 2024: 2.0%; January 2025: 2.0%)
as the expected long-term target rate of inflation for the UK economy based on the November 2025 Monetary Policy Report published by the
Bank of England. The cash flows were then discounted to present value using a suitably risk-adjusted nominal discount rate based on a
market-participant view of the cost of capital and debt relevant to the insurance industry.
At 31 January 2026, the pre-tax discount rate used for the Insurance Broking CGU was 12.2% (July 2024: 14.7%; January 2025: 13.3%).
The Group’s five-year financial forecasts incorporated the modelled impact of the change to a new partnership operating model for the motor
and home products. As per IAS 36.44, incremental cash flows directly attributable to growth initiatives not yet enacted at the statement of
financial position date were then removed for the purpose of the value-in-use calculation.
The Group also considered the impact of downside stresses, both in terms of adverse impacts to the cash flow projections and to the discount
rate. For the cash flow stress test, the Group modelled the impact of a possible reduction in the level of benefits expected to be achieved
from the Affinity Partnership, in combination with a more cautious terminal growth rate based on a more conservative assumption of 1.5%
(July 2025: 1.5%; January 2025: 1.5%) as the outlook for growth in the UK economy. For the discount rate stress test, the Group applied risk
premia of +0.7ppts at 31 January 2026 (July 2024: +0.5ppts; January 2025: +0.4ppts).
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Annual Report and Accounts 2026
151
The (deficit)/headroom of the Insurance Broking CGU against the carrying value of goodwill at the time of the review of £206.4m at
31 January 2026 and £206.4m at 31 January 2025 (after recognising an impairment charge of £138.3m at 31 July 2024), was as follows:
| Headroom/(deficit) £m |
||||||
Cash flow stress |
Discount rate stress |
|||||
Base scenario |
test scenario |
test scenario |
||||
31 January |
31 January |
31 January |
31 January |
31 January |
31 January |
|
2026 |
2025 |
2026 |
2025 |
2026 |
2025 |
|
Insurance Broking |
74.9 |
33.4 |
22.4 |
(19.2) |
58.2 |
25.9 |
The (deficit)/headroom calculated is sensitive to the discount rate and terminal growth rate assumed, and to changes in the projected cash flows
of the CGU. Inherent uncertainty involved in forecasting cashflows under a new partnership model increase the range of possible cash flow
outcomes in management’s modelling. A quantitative sensitivity analysis for each of these at 31 January 2026, and its impact on the base
scenario headroom against the carrying value of goodwill at the time of the review of £206.4m, is as follows:
Pre-tax discount rate |
Terminal growth rate |
Cash flow (annual) |
||||
+1.0ppt |
-1.0ppt |
+1.0ppt |
-1.0ppt |
+10% |
-10% |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Insurance Broking |
(22.7) |
27.8 |
27.2 |
(21.1) |
31.1 |
(31.1) |
It would take an increase in the pre-tax discount rate of 4.4 percentage points to reduce the headroom to £nil; a reduction in the terminal growth
rate to -3.3%, or a reduction in base case cashflows of 24.1%.
b) Other intangible assets
Separately identifiable intangible assets are valued, and their appropriate useful lives established, at the time of acquisition. The carrying values
of these assets, and their remaining useful lives, are reviewed annually for indicators of impairment.
In the year to 31 January 2026, following the Group’s disposal of the underwriting and claims handling sections of its Insurance business
(Note 38a) and the impact of this on its Insurance Broking business, management concluded that this constitutes an indicator of impairment
and duly conducted an impairment review of the software assets of this business. The outcome of this impairment review concluded that
an impairment charge of £0.3m should be recognised against the software assets held by the Group’s Insurance Broking division at
31 January 2026. This was charged to administrative and selling expenses.
In the prior year, following the Group’s decision to divest itself of the underwriting and claims handling sections of its Insurance business
(Note 38a), management concluded that this constituted an indicator of impairment and duly conducted an impairment review of the Group’s
other intangible fixed assets. The outcome of this impairment review concluded that an impairment charge of £4.0m should be recognised
against the intangible fixed assets held by the disposal group at 31 January 2025 (Note 38a). The impairment charge related to the software
assets of the claims handling section of the Insurance business, which were impaired in full.
As a result of the announcement above, and subsequent impairment review, management concluded that an impairment charge of £21.3m
should be recognised against the internally generated software assets relating to Guidewire (the Group’s Insurance Broking, policy
administration and billing platform (Note 15)) at 31 January 2025. This was charged to administrative and selling expenses. The Guidewire
software assets did not form part of the intangible fixed assets held by the disposal group.
In addition, management assessed the recoverable amount of software assets at 31 January 2025 and concluded that an impairment of £2.8m
was required in the Group’s Central Costs division. This was charged to administrative and selling expenses.
With the exception of the above, the Group did not consider it necessary to conduct an impairment review of other intangible assets at
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
152
Long |
|||||
Freehold |
leasehold |
||||
land and |
land and |
Ocean |
Plant and |
||
buildings |
buildings |
Cruise ships |
equipment |
Total |
|
£m |
£m |
£m |
£m |
£m |
|
Cost |
|||||
At 1 February 2024 |
0.4 |
8.9 |
657.1 |
22.9 |
689.3 |
Additions |
– |
– |
5.8 |
1.1 |
6.9 |
Disposals |
– |
– |
(0.2) |
(0.2) |
(0.4) |
Reclassification from assets held for sale (Note 38b) |
6.0 |
– |
– |
– |
6.0 |
At 31 January 2025 |
6.4 |
8.9 |
662.7 |
23.8 |
701.8 |
Additions |
– |
– |
7.8 |
2.6 |
10.4 |
Disposals |
(0.4) |
(0.4) |
(0.4) |
(6.7) |
(7.9) |
At 31 January 2026 |
6.0 |
8.5 |
670.1 |
19.7 |
704.3 |
Depreciation and impairment |
|||||
At 1 February 2024 |
0.4 |
5.6 |
70.4 |
19.5 |
95.9 |
Provided during the year |
– |
0.1 |
21.7 |
1.4 |
23.2 |
Impairment of assets |
– |
– |
– |
0.1 |
0.1 |
Disposals |
– |
– |
– |
(0.2) |
(0.2) |
At 31 January 2025 |
0.4 |
5.7 |
92.1 |
20.8 |
119.0 |
Provided during the year |
0.1 |
– |
22.8 |
1.1 |
24.0 |
Impairment of assets |
– |
– |
– |
0.7 |
0.7 |
Disposals |
(0.4) |
(0.4) |
(0.4) |
(6.5) |
(7.7) |
At 31 January 2026 |
0.1 |
5.3 |
114.5 |
16.1 |
136.0 |
Net book value |
|||||
At 31 January 2026 |
5.9 |
3.2 |
555.6 |
3.6 |
568.3 |
At 31 January 2025 |
6.0 |
3.2 |
570.6 |
3.0 |
582.8 |
2026 |
2025 |
|
£m |
£m |
|
Cost of sales |
23.1 |
22.4 |
Administrative and selling expenses (Note 5) |
0.9 |
0.7 |
Continuing operations |
24.0 |
23.1 |
Discontinued operations |
– |
0.1 |
24.0 |
23.2 |
The Ocean Cruise ship assets reported above includes capitalised dry dock refit costs, IT and soft furnishings, as these assets are components
of the ships.
During the year, the Group disposed of assets with a net book value of £0.2m (2025: £0.2m). The profit arising on disposal was £0.1m and
credited to cost of sales (2025: £0.9m profit and credited to administrative and selling expenses).
In the year to 31 January 2026, following the Group’s disposal of the underwriting and claims handling sections of its Insurance business
(Note 38a) and the impact of this on its Insurance Broking, and mailing and printing businesses, management concluded that this constitutes
an indicator of impairment and duly conducted an impairment review of the assets of this business. The outcome of this impairment review
concluded that an impairment charge of £0.7m should be recognised against the plant and equipment assets held by the Group at
31 January 2026. This was charged to administrative and selling expenses (£0.1m) and cost of sales (£0.6m).
In the prior year, management assessed the recoverable amount of plant and equipment assets at 31 January 2025 and concluded that an
impairment charge of £0.1m was required in the Group’s Central Costs division. This was charged to administrative and selling expenses.
With the exception of the above, the Group did not consider it necessary to conduct an impairment review of property, plant and equipment
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Annual Report and Accounts 2026
153
Long |
||||
leasehold |
||||
land and |
River |
Plant and |
||
buildings |
Cruise ships |
equipment |
Total |
|
£m |
£m |
£m |
£m |
|
Cost |
||||
At 1 February 2024 |
4.0 |
22.5 |
11.1 |
37.6 |
Additions |
– |
7.3 |
0.7 |
8.0 |
Disposals |
– |
(1.6) |
(2.1) |
(3.7) |
Effect of modification of lease terms |
(0.3) |
– |
– |
(0.3) |
At 31 January 2025 |
3.7 |
28.2 |
9.7 |
41.6 |
Additions |
– |
13.9 |
4.0 |
17.9 |
Disposals |
(0.8) |
– |
(1.5) |
(2.3) |
Effect of modification of lease terms |
(0.1) |
– |
– |
(0.1) |
At 31 January 2026 |
2.8 |
42.1 |
12.2 |
57.1 |
Depreciation and impairment |
||||
At 1 February 2024 |
1.4 |
5.3 |
6.3 |
13.0 |
Provided during the year |
1.1 |
4.5 |
1.8 |
7.4 |
Disposals |
– |
(1.6) |
(2.1) |
(3.7) |
At 31 January 2025 |
2.5 |
8.2 |
6.0 |
16.7 |
Provided during the year |
0.5 |
4.5 |
1.7 |
6.7 |
Disposals |
(0.8) |
– |
(1.5) |
(2.3) |
Impairment of assets |
0.1 |
– |
0.8 |
0.9 |
At 31 January 2026 |
2.3 |
12.7 |
7.0 |
22.0 |
Net book value |
||||
At 31 January 2026 |
0.5 |
29.4 |
5.2 |
35.1 |
At 31 January 2025 |
1.2 |
20.0 |
3.7 |
24.9 |
2026 |
2025 |
|
£m |
£m |
|
Cost of sales |
5.5 |
5.2 |
Administrative and selling expenses (Note 5) |
1.2 |
2.2 |
6.7 |
7.4 |
During the year, the Group disposed of assets with a net book value of £nil (2025: £nil). The profit arising on disposal was £0.5m and credited
to cost of sales (2025: £nil).
The total cash outflow for leases amounted to £9.2m (2025: £9.4m).
In the year ended 31 January 2026, the modification of lease terms relating to long leasehold land and buildings resulted in a gain of £nil
(2025: £0.2m) being reported in the income statement in the year.
In the year to 31 January 2026, following the Group’s disposal of the underwriting and claims handling sections of its Insurance business
(Note 38a) and the impact of this on its mailing and printing business, management concluded that this constitutes an indicator of impairment
and duly conducted an impairment review of the assets of this business. The outcome of this impairment review concluded that an impairment
charge of £0.8m should be recognised against the plant and equipment assets held by the mailing and printing business at 31 January 2026.
This was charged to cost of sales.
Also, in the year to 31 January 2026, management decided to review long leasehold land and building leases used by the Group’s Cruise business.
As part of this exercise, management performed an impairment review of right-of-use assets used by the Cruise business. The outcome of this
review concluded that an impairment charge of £0.1m be recognised against the Group’s long leasehold land and buildings at 31 January 2026.
This was charged to administrative and selling expenses.
With the exception of the above, the Group did not consider it necessary to conduct an impairment review of right-of-use assets at 31 January 2026,
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
154
The Group’s principal financial liabilities comprise loans and borrowings, and trade and other payables. The main purpose of the loans and
borrowings financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group’s principal
financial assets included debt securities and money market funds, both held within the Insurance business (Note 38a), trade and other
receivables, and cash and short-term deposits. The Group also enters into derivative transactions such as foreign exchange forward contracts,
fuel and gas oil swaps and interest rate swaps to manage its exposure to various risks.
2026 |
2025 |
|
£m |
£m |
|
FVTPL |
||
Foreign exchange forward contracts |
0.2 |
0.2 |
Money market funds |
– |
62.9 |
Debt securities |
– |
178.7 |
0.2 |
241.8 |
|
FVTPL designated in a hedging relationship |
||
Foreign exchange forward contracts |
0.7 |
0.9 |
Fuel oil swaps |
0.2 |
– |
0.9 |
0.9 |
|
Amortised cost |
||
Deposits with financial institutions |
– |
11.5 |
– |
11.5 |
|
Amounts reclassified to assets held for sale |
– |
(241.6) |
Total financial assets |
1.1 |
12.6 |
Current |
1.0 |
12.4 |
Non-current |
0.1 |
0.2 |
1.1 |
12.6 |
2026 |
2025 |
|
£m |
£m |
|
Total financial assets (as above and presented on the face of the statement of financial position) |
1.1 |
12.6 |
Trade receivables (Note 23) |
98.4 |
99.7 |
Other receivables (Note 23) |
8.1 |
7.0 |
Cash and short-term deposits (Note 25) |
257.0 |
129.2 |
Total financial assets (including cash and short-term deposits, trade and other receivables) |
364.6 |
248.5 |
business (included within assets held for sale), and were subject to contractual restrictions and were not readily available to be used for other
purposes within the Group. The Group’s Insurance Underwriting business was disposed of on 1 July 2025 (Note 38a), and therefore, no balances
All financial assets that are measured at FVTPL are mandatorily measured at FVTPL, with the exception of debt securities which are designated
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Additional information
Saga plc
Annual Report and Accounts 2026
155
b) Financial liabilities
2026 |
2025 |
|
£m |
£m |
|
FVTPL |
||
Foreign exchange forward contracts |
0.4 |
0.2 |
0.4 |
0.2 |
|
FVTPL designated in a hedging relationship |
||
Foreign exchange forward contracts |
2.4 |
0.9 |
Fuel oil swaps |
0.3 |
0.5 |
Interest rate swaps |
1.7 |
– |
4.4 |
1.4 |
|
Amortised cost |
||
Bond, Ocean Cruise ship loans, term loan and loan facility provided by Roger De Haan (Note 30) |
607.9 |
662.2 |
Lease liabilities |
38.4 |
26.1 |
Bank overdrafts |
0.3 |
1.6 |
646.6 |
689.9 |
|
Amounts reclassified to liabilities associated with assets held for sale |
– |
(1.4) |
Total financial liabilities |
651.4 |
690.1 |
Current |
66.7 |
71.3 |
Non-current |
584.7 |
618.8 |
651.4 |
690.1 |
2026 |
2025 |
|
£m |
£m |
|
Total financial liabilities (as above and presented on the face of the statement of financial position) |
651.4 |
690.1 |
Trade payables (Note 26) |
168.5 |
145.5 |
Other payables (Note 26) |
16.8 |
9.0 |
Accruals (Note 26) |
62.0 |
43.9 |
Total financial liabilities (including trade and other payables, and accruals) |
898.7 |
888.5 |
Except for the Group’s bond and Ocean Cruise ship loans, the fair values of financial liabilities held at amortised cost are not materially different
from their carrying amounts, since the interest payable on those liabilities is close to current market rates. The fair value of the Group’s bond
(Note 30) at 31 January 2026 was £nil (2025: £249.7m). The fair value of the Group’s Ocean Cruise ship loans (Note 30) at 31 January 2026 was
£270.5m (2025: £325.6m).
Financial instruments held at fair value are valued using quoted market prices or other valuation techniques.
Valuation techniques include net present value and discounted cash flow models, and comparison with similar instruments for which
market-observable prices exist. Assumptions and market-observable inputs used in valuation techniques include foreign currency exchange
rates and future oil prices.
The objective of using valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the
reporting date, which would have been determined by market participants acting at arm’s length.
Observable prices are those that have been seen either from counterparties or from market pricing sources, including Bloomberg. The use
of these depends upon the liquidity of the relevant market.
Financial instruments held at fair value have been categorised into a fair value measurement hierarchy as follows:
i) Level 1
These are valuation techniques that are based entirely on quoted market prices in an actively traded market and are the most reliable.
All money market funds and debt securities were categorised as Level 1, as the fair value was obtained directly from the quoted active
market price.
Consolidated financial statements
Notes to the consolidated financial statements
continued
19 Financial assets and financial liabilities continued
c) Fair values continued
Saga plc
Annual Report and Accounts 2026
156
ii) Level 2
These are valuation techniques for which all significant inputs are taken from observable market data. These include valuation models used to
calculate the present value of expected future cash flows and may be employed either when no active market exists or when there are quoted
prices available for similar instruments in active markets.
The models incorporate various inputs, including the credit quality of counterparties, interest rate curves and forward rate curves of the
underlying instrument.
All the derivative financial instruments are categorised as Level 2, as the fair values are obtained from the counterparty, brokers or valued using
observable inputs. Where material, credit valuation adjustment/debit valuation adjustment risk adjustments are factored into the fair values of
these instruments. At 31 January 2026, the marked-to-market values of derivative assets are net of a credit valuation adjustment attributable
to derivative counterparty default risk.
The fair values are periodically reviewed by the Group’s Treasury Committees.
iii) Level 3
These are valuation techniques for which any significant inputs are not based on observable market data.
The following tables provide the quantitative fair value hierarchy of the Group’s financial assets and financial liabilities that are held at fair value:
At 31 January 2026 |
At 31 January 2025 |
|||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Level 1 |
Level 2 |
Level 3 |
Total |
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Financial assets measured at fair value |
||||||||
Foreign exchange forwards |
– |
0.9 |
– |
0.9 |
– |
1.1 |
– |
1.1 |
Fuel oil swaps |
– |
0.2 |
– |
0.2 |
– |
– |
– |
– |
Debt securities |
– |
– |
– |
– |
178.7 |
– |
– |
178.7 |
Money market funds |
– |
– |
– |
– |
62.9 |
– |
– |
62.9 |
Financial liabilities measured at fair value |
||||||||
Foreign exchange forwards |
– |
2.8 |
– |
2.8 |
– |
1.1 |
– |
1.1 |
Fuel oil swaps |
– |
0.3 |
– |
0.3 |
– |
0.5 |
– |
0.5 |
Interest rate swaps |
– |
1.7 |
– |
1.7 |
– |
– |
– |
– |
Financial assets for which fair values |
||||||||
are disclosed |
||||||||
Deposits with financial institutions |
– |
– |
– |
– |
– |
11.5 |
– |
11.5 |
Financial liabilities for which fair values |
||||||||
are disclosed |
||||||||
Bond, Ocean Cruise ship loans, term loan and |
– |
595.3 |
– |
595.3 |
249.7 |
400.6 |
– |
650.3 |
the loan facility provided by Roger De Haan |
||||||||
Lease liabilities |
– |
38.4 |
– |
38.4 |
– |
26.1 |
– |
26.1 |
Bank overdrafts |
– |
0.3 |
– |
0.3 |
– |
1.6 |
– |
1.6 |
There were no transfers between Level 1 and Level 2 during the year. There were no non-recurring fair value measurements of assets and
liabilities during the year (2025: none). The Group’s policy is to recognise transfers into, and out of, fair value hierarchy levels at the end of the
reporting period.
The values of the debt securities and money market funds were based upon publicly available market prices.
Foreign exchange forwards are valued using current spot and forward rates discounted to present value. They are also adjusted for
counterparty credit risk using credit default swap curves. Fuel oil swaps are valued with reference to the valuations provided by third parties,
which use current Platts index rates, discounted to present value.
Bonds are valued at quoted market bid prices.
Ship loans are valued using discounted cash flows at the current rates of interest.
Interest rate swaps are valued as the present value of the estimated future cash flows, discounted using observable yield curves, and adjusted for
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
157
i) Forward currency risk
During the year ended 31 January 2026, the Group designated 410 foreign exchange forward currency contracts as hedges of highly probable
foreign currency cash expenses in future periods (2025: 258). These contracts are entered into to minimise the Group’s exposure to foreign
exchange risk and are designated as cash flow hedges.
Foreign currency cash flow hedging |
Designated in the year |
At 31 January 2026 |
At 31 January 2025 |
|||
instruments (nominal amounts) |
Volume |
£m |
Volume |
£m |
Volume |
£m |
Euro ( EUR ) |
87 |
0.1 |
90 |
0.1 |
63 |
(0.7) |
US dollar ( USD ) |
109 |
(1.4) |
121 |
(1.8) |
64 |
0.8 |
Other currencies |
214 |
– |
228 |
– |
132 |
(0.1) |
Total |
410 |
(1.3) |
439 |
(1.7) |
259 |
– |
Hedging instruments for other currencies are in respect of Australian dollars, Canadian dollars, Swiss francs, Japanese yen, New Zealand
dollars, Norwegian krone, Thai baht, Chinese yuan, Danish krona and South African rand.
ii) Commodity price risk
The Group uses derivative financial instruments to mitigate the risk of adverse changes in the price of fuel. The Group enters into fixed price
contracts (swaps) in the management of its fuel price exposures. These contracts are expected to reduce the volatility attributable to price
fluctuations of fuel and are designated as cash flow hedges. Hedging the price volatility of forecast fuel purchases is in accordance with the risk
management strategy outlined by the Board of Directors. During the year ended 31 January 2026, the Group designated 78 fuel oil swaps as
hedges of highly probable fuel oil purchases in future periods (2025: 20).
Commodity cash flow hedging |
Designated in the year |
At 31 January 2026 |
At 31 January 2025 |
|||
instruments (nominal amounts) |
Volume |
£m |
Volume |
£m |
Volume |
£m |
Hedging instruments |
78 |
(0.1) |
78 |
(0.1) |
35 |
(0.5) |
iii) Hedge maturity profile
The table below summarises the maturities of the Group’s derivatives at 31 January 2026.
1 February |
1 August |
1 February |
1 August |
|
2026 to |
2026 to |
2027 to |
2027 to |
|
31 July |
31 January |
31 July |
31 January |
|
Derivatives settled gross |
2026 |
2027 |
2027 |
2028 |
Foreign exchange forwards |
||||
Buy Euro |
||||
Notional amount of derivative (£m) |
34.9 |
30.6 |
2.0 |
– |
Average hedge rate |
1.153 |
1.135 |
1.120 |
1.101 |
Fair value (£m) |
0.1 |
– |
– |
– |
Buy USD |
||||
Notional amount of derivative (£m) |
19.6 |
19.0 |
11.4 |
1.8 |
Average hedge rate |
1.312 |
1.312 |
1.335 |
1.331 |
Fair value (£m) |
(0.9) |
(0.7) |
(0.2) |
– |
Buy other currencies |
||||
Notional amount of derivative (£m) |
7.4 |
5.6 |
0.7 |
0.1 |
Average hedge rate |
n/a |
n/a |
n/a |
n/a |
Fair value (£m) |
– |
– |
– |
– |
1 February |
1 August |
1 February |
1 August |
1 February |
1 August |
|
2026 to |
2026 to |
2027 to |
2027 to |
2028 to |
2028 to |
|
31 July |
31 January |
31 July |
31 January |
31 July |
31 January |
|
Derivatives settled net |
2026 |
2027 |
2027 |
2028 |
2028 |
2029 |
Fuel hedges |
||||||
Quantity - metric tonnes |
15,620 |
16,328 |
12,623 |
6,600 |
– |
– |
Average trade price per metric tonne – £ |
316 |
308 |
340 |
207 |
– |
– |
Fair value (£m) |
(0.1) |
(0.1) |
0.1 |
– |
– |
– |
Interest rate swaps |
||||||
Notional amount – £m |
335.0 |
335.0 |
335.0 |
335.0 |
335.0 |
335.0 |
Average contracted fixed interest rate – % |
3.73 |
3.73 |
3.73 |
3.73 |
3.73 |
3.75 |
Fair value (£m) |
(0.1) |
(0.6) |
(0.6) |
(0.3) |
(0.1) |
– |
Consolidated financial statements
Notes to the consolidated financial statements
continued
19 Financial assets and financial liabilities continued
d) Cash flow hedges continued
iii) Hedge maturity profile continued
Saga plc
Annual Report and Accounts 2026
158
During the year, the Group recognised net losses of £4.5m (2025: £6.0m gains) on cash flow hedging instruments through OCI into the hedging
reserve. The Group recognised £nil (2025: £nil) through the income statement in respect of the ineffective portion of foreign exchange hedges
measured during the year. The Group recognised £nil (2025: £nil) through the income statement in respect of the ineffective portion of interest
rate swaps measured during the year.
During the year, the Group de-designated two foreign currency forward contracts, with a transaction value of £2.4m, where forecast cash flows
are no longer expected to occur with a sufficiently high degree of certainty to meet the requirements of IFRS 9. The accumulated losses in
relation to these contracts of £nil were reclassified from the hedging reserve into profit or loss during the year. The Group did not de-designate
any fuel oil swaps during the year. During the year, the Group recognised a £1.6m loss (2025: £3.3m gain) through the income statement in
respect of matured hedges that were recycled from OCI.
During the year, the Group hedged its £335.0m term loan (Note 30) using interest rate derivatives. The Group held interest rate swaps to hedge
exposure to the financial risk of variability in cash flows attributable to movements in interest rates. The fair value of the Group’s interest swaps at
The Group is exposed to market risk, credit risk, liquidity risk and operational risk, and was also exposed to insurance risk up to 1 July 2025 when
it disposed of its Insurance Underwriting business (Note 38a). The Group’s senior management oversees these risks, supported by the Group
Treasury function and Treasury Committees within the key areas of the Group that advise on financial risks and the appropriate financial risk
governance framework for the Group. These functions and Committees ensure that the Group’s financial risks are governed by appropriate
policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk
objectives. All derivative activities are for risk management purposes and are carried out by the Group’s Treasury function. It is the Group’s policy
that no trading in derivatives for speculative purposes may be undertaken.
The Group manages concentration risk on its financial assets through a policy of diversification that is outlined in the Group Treasury Policy and
approved by the Board. The policy defines the exposure limit by asset class and to third-party institutions based on the credit ratings of the
individual counterparties, combined with the views of the Board. On a monthly basis, exposure to each asset class and counterparty is calculated
and reported, and compliance with the policy is monitored.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
The Group’s exposure to insurance and operational risks, and the approach to managing these risks, is explained in more detail in Notes 20d)
and e).
Market risk is the risk that the fair value, or future cash flows, of a financial instrument, or the valuation of insurance and reinsurance contract
assets and liabilities fluctuates due to changes in market prices. The Group is exposed to the following market risk factors:
•
Foreign currency risk
•
Commodity price risk
•
Interest rate risk
The Group has policies and limits approved by the Board for managing market risk exposure. These set out the principles that the business
should adhere to for managing market risk and establishing the maximum limits that the Group is willing to accept considering strategy, risk
appetite and capital resources. The Group has the ability to monitor market risk exposure on a daily basis and has established limits for each
component of market risk.
The Group uses derivatives for hedging its exposure to foreign currency and fuel oil price risks. The market risk policy explicitly prohibits the
use of derivatives for speculative purposes. For risk exposures that the Group hedges, and for which the Group applies hedge accounting,
ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated, or if there are changes in the
credit risk of the derivative counterparty. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic
prospective effectiveness assessments, to ensure that an economic relationship exists between the hedged item and hedging instrument.
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges
and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
Foreign currency risk is the risk that the fair value, or future cash flows, of a financial asset or liability will fluctuate due to changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities
(when revenue or expense is denominated in a different currency from the Group’s functional currency). The Group is not exposed to material
foreign currency risk through its Insurance Underwriting activities (Note 38a).
The Group uses foreign exchange forward contracts to manage the majority of its transaction exposures. The foreign exchange forward
contracts, some of which are formally designated as hedging instruments, are entered into for periods consistent with the foreign currency
exposure of the underlying transactions, generally from one to 24 months. The foreign exchange forward contracts vary with the level of
expected foreign currency sales and purchases. The Group designates the spot element of forward contracts to hedge its currency risk.
The forward elements of forward exchange contracts are excluded from the designation of the hedging instrument and are separately
accounted for as a cost of hedging, which is recognised in equity in a cost of hedging reserve.
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
159
The following table demonstrates the sensitivity of the fair value of forward exchange contracts to a 5% change in USD and EUR exchange rates,
with all other variables held constant. The Group’s exposure to foreign currency changes for all other currencies is not material. The impact is
shown net of tax at the current rate.
Sensitivity of +/– 5% |
|||
foreign exchange |
|||
rate change in |
Effect on equity |
Effect on profit after tax |
|
2026 |
EUR |
+/– £3.2m |
+/– £0.5m |
USD |
+/– £2.3m |
+/– £0.3m |
|
2025 |
EUR |
+/– £2.2m |
+/– £0.3m |
USD |
+/– £2.1m |
+/– £0.5m |
To the extent that forward exchange contracts are held as part of effective hedging relationships, any change to the fair value of the instrument
ii) Commodity price risk
The Group is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of fuel and gas oil to
sail its Ocean Cruise ships and, therefore, require a continuous supply of fuel and gas oil. The volatility in the price of fuel and gas oil has led to the
decision to enter into commodity fuel and gas oil swap contracts. These contracts are expected to reduce the volatility attributable to price
fluctuations of fuel and gas oil. Managing the price volatility of forecast oil purchases is in accordance with the risk management strategy outlined
by the Board of Directors.
The Group manages the purchase price using forward commodity purchase contracts based on future forecast fuel oil requirements.
The following table shows the sensitivity of the fair value of fuel oil swaps to changes in the underlying fuel oil price (USD) with all other variables
held constant. The impact is shown net of tax at the current rate.
Sensitivity of +/– 5% |
|||
rate change in |
Effect on equity |
Effect on profit after tax |
|
2026 |
USD – Fuel oil price |
+/– £0.7m |
– |
2025 |
USD – Fuel oil price |
+/– £0.5m |
– |
iii) Interest rate risk
Interest rate risk is the risk that the fair value, or future cash flows, of a financial instrument or the valuation of insurance and reinsurance
contract assets and liabilities fluctuates because of changes in market interest rates.
Interest rate risk arises from various sources:
•
Investments in debt securities with a fixed interest rate, the market value and carrying value of which is affected by movements in market
interest rates.
•
Investments in debt securities with a floating interest rate and short-term deposits. Movements in market interest rates change the
amounts earned from these assets but do not materially affect their market value or carrying value.
•
Borrowings with a floating interest rate (deferred repayments of ship loans and the term loan provided by HPS Funds). Movements in
market interest rates change the future cash flows that will arise from these borrowings, but do not materially affect their carrying value.
For the term loan, the Group entered into interest rate hedges that fix the interest payments, thereby mitigating the cash exposure to
changes in market interest rates.
•
Insurance and reinsurance contract assets and liabilities. This interest rate risk primarily arises from the discounting of liabilities for
incurred claims and loss components of the liability for remaining coverage, and corresponding assets arising from reinsurance contracts.
The discount rates used are linked to market interest rates, such that changes in market interest rates will affect the valuation of insurance
and reinsurance contract assets and liabilities.
The Group’s loans and borrowings, at 31 January 2026, comprised both fixed and floating interest rate facilities. The floating-rate borrowings are
amortised based on market expectations of future interest rates and, in the case of the term loan, the interest rate risk has been hedged, using
interest rate derivatives, until August 2028. As a result of this hedging activity, although the underlying facilities are floating-rate, the associated
cash flows are fixed to August 2028. All fixed interest rate loans and borrowings are accounted for at amortised cost. Consequently, changes in
market interest rates do not affect their accounting measurement. For the fixed-rate and hedged floating-rate borrowings, changes in market
rates also do not affect the future cash flows arising from them. These instruments are, therefore, not considered further in this Note.
The Group remains exposed to the risk that interest rates could be higher when these borrowings are refinanced. Further information on the
Group’s borrowings is provided in Note 30.
The Group’s interest rate exposure, after hedging activity, is summarised in the following table:
2026 |
2025 |
|
£m |
£m |
|
Investments in debt securities with a fixed interest rate |
– |
167.9 |
Investments in debt securities with a floating interest rate |
– |
10.8 |
Money market funds and short-term deposits |
186.8 |
99.1 |
Borrowings with a floating interest rate (deferred repayments of ship loans) |
(13.0) |
(24.8) |
Insurance contract liabilities for incurred claims |
– |
(269.6) |
Reinsurance assets for incurred claims |
– |
117.1 |
Insurance contract liabilities for remaining coverage (loss component) |
– |
(1.8) |
Consolidated financial statements
Notes to the consolidated financial statements
continued
20 Financial and insurance risk management objectives and policies continued
a) Market risk continued
iii) Interest rate risk continued
Saga plc
Annual Report and Accounts 2026
160
Debt securities, money market funds, insurance contract liabilities and reinsurance assets were held by the Group’s Insurance Underwriting
business which was included within assets held for sale at 31 January 2025, and disposed of on 1 July 2025 (Note 38a), and therefore, no balances
are reported at 31 January 2026 in the table above.
The Group manages interest rate risk in various ways. The Group has a policy of holding the majority of investments to maturity by closely
matching asset and liability duration, and also ensures that the investment portfolio has a diversified range of investments such that there is
a combination of fixed and floating rate securities. Moreover, for the interest rate risk associated with the term loan, the Group has used interest
rate derivatives to hedge against the floating component of the facility.
In relation to the prior year, the following table shows the sensitivity of debt securities and insurance and reinsurance contract assets and
liabilities to a 50bps parallel increase or decrease in market interest rates at the end of the prior reporting period, being the change in market
interest rates that was considered reasonably possible at this date. This analysis assumed a corresponding change in the carer wage inflation
assumption within the valuation of PPO liabilities for incurred claims, as management expected these assumptions to move together in the long
term. All other variables were assumed to remain constant. This table does not show any impact on debt securities with a floating interest rate,
money market funds or borrowings, as their carrying values were not materially impacted by movements in market interest rates. The impacts
are shown net of tax at the current rate. The Group’s Insurance Underwriting business was disposed of on 1 July 2025 (Note 38a), and therefore,
no balances are reported at 31 January 2026 in the table below.
2025 |
||
Impact on profit after tax |
||
and on equity |
||
50bps |
50bps |
|
increase |
decrease |
|
Discount rate change: |
||
Insurance and reinsurance contracts: Net liabilities for incurred claims |
£0.6m |
(£0.6m) |
Insurance and reinsurance contracts: Net loss component |
£0.2m |
(£0.2m) |
Interest rate change (impact on debt securities) |
(£0.6m) |
£0.6m |
Net impact |
£0.2m |
(£0.2m) |
The following table shows the impact that a 50bps parallel increase or decrease in market interest rates would have had on profit after tax in
the period arising from floating rate debt securities, money market funds, short-term deposits and borrowings with a floating interest rate.
This analysis assumes that the Group’s relevant risk exposures throughout the year had been the same as they were at the end of the year.
The Group’s Insurance Underwriting business was disposed of on 1 July 2025 (Note 38a), and therefore, no Insurance business related
balances are included in the table below for the current year.
2026 |
2025 |
|||
Impact on profit after tax |
Impact on profit after tax |
|||
50bps |
50bps |
50bps |
50bps |
|
increase |
decrease |
increase |
decrease |
|
Money market funds held within the Insurance business and short-term |
£0.7m |
(£0.7m) |
£0.4m |
(£0.4m) |
deposits |
||||
Borrowings with a floating interest rate (deferred repayments of ship loans) |
– |
– |
(£0.1m) |
£0.1m |
Net impact |
£0.7m |
(£0.7m) |
£0.3m |
(£0.3m) |
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument, insurance contract, reinsurance contract
or customer contract, leading to a financial loss. The Group was primarily exposed to credit risk in relation to its financial and reinsurance assets,
outstanding derivatives, trade and other receivables, and cash and cash equivalents. The Group assesses its counterparty exposure in relation
to the investment of surplus cash, fuel oil and foreign currency contracts and undrawn credit facilities. The Group primarily uses published
credit ratings to assess counterparty strength and, therefore, define the credit limit for each counterparty in accordance with approved
treasury policies.
The credit risk in respect of trade and other receivables is generally limited, as payment from customers is primarily required before services
are provided. At 31 January, the maximum exposure to credit risk for trade receivables by operating segment was as follows:
2026 |
2025 |
|
£m |
£m |
|
Travel |
3.6 |
1.7 |
Insurance |
22.0 |
14.0 |
Other Businesses and Central Costs |
3.6 |
3.0 |
29.2 |
18.7 |
|
Amounts relating to assets held for sale (Note 38a) |
– |
(2.4) |
29.2 |
16.3 |
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
161
The variance between the quantum of the maximum exposure to credit risk for trade receivables (above) and total of trade receivables
presented in ‘Trade and other receivables’ (Note 23) primarily relates to debtors arising from insurance policies brokered by the Group but
underwritten by third-party insurers for which corresponding creditors exist in respect of the net premium to be passed on to the third-party
insurers. In the event of payment obligation default by a customer no longer on risk, the impairment of the debtor balance by the Group would
lead to a corresponding reduction in the related creditor with, or refund of net premium from, the third-party insurer. In the event of payment
obligation default by a customer remaining on risk, the impairment of the debtor balance by the Group would not lead to a corresponding
reduction in the related creditor with, or refund of net premium from, the third-party insurer, and the Group would bear the credit risk relating
to the debtor balance.
The Group uses an allowance matrix to measure the ECLs of trade receivables from individual customers, which comprise a very large number of
small balances. The loss allowance required for these receivables is calculated in line with the simplified method for trade receivables per IFRS 9,
whereby lifetime ECLs are recognised irrelevant of the credit risk. The loss allowance is based on a combination of:
•
aged debtor analysis;
•
historical experience of write-offs for each receivable;
•
any specific indicators of credit deterioration observed; and
•
management judgement.
written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group.
On that basis, the loss allowance at 31 January 2026 and 31 January 2025 was determined as follows for trade receivables:
31 January 2026 |
Current |
< 30 days |
30-60 days |
61-90 days |
91-120 days |
> 120 days |
Total |
Expected loss rate |
0.0% |
20.0% |
22.0% |
44.4% |
100% |
71.5% |
|
Gross carrying amount – trade receivables (Note 23) |
£95.8m |
£2.2m |
£0.6m |
£0.1m |
£0.1m |
£1.1m |
£99.9m |
Loss allowance (Note 23) |
£0.0m |
£0.4m |
£0.1m |
£0.1m |
£0.1m |
£0.8m |
£1.5m |
31 January 2025 |
Current |
< 30 days |
30-60 days |
61-90 days |
91-120 days |
> 120 days |
Total |
Expected loss rate |
0.4% |
31.1% |
14.5% |
28.1% |
25.7% |
80.6% |
|
Gross carrying amount – trade receivables (Note 23) |
£98.5m |
£1.4m |
£0.4m |
£0.1m |
£0.2m |
£0.6m |
£101.2m |
Loss allowance (Note 23) |
£0.4m |
£0.4m |
£0.1m |
£0.0m |
£0.1m |
£0.5m |
£1.5m |
The loss allowance for trade receivables, which relates wholly to continuing activities, reconciles to the opening allowances as follows:
2026 |
2025 |
|
£m |
£m |
|
Opening loss allowance at 1 February |
1.5 |
0.9 |
Increase in loan loss allowance recognised in profit or loss during the year |
0.9 |
2.0 |
Receivables written off during the year as uncollectable |
(0.9) |
(1.2) |
Unused amount reversed |
– |
(0.2) |
Closing loss allowance at 31 January |
1.5 |
1.5 |
Credit risk in relation to deposits, debt securities and derivative counterparties is managed by the Group’s Treasury function in accordance
with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty. Counterparty credit limits are reviewed on a regular basis and updated throughout the year, subject to approval by the Board.
The limits are set to minimise the concentration of risks and, therefore, mitigate financial loss through any potential counterparty failure.
In its Insurance Underwriting business, which was disposed of on 1 July 2025 and included within discontinued operations, the Group was
exposed to credit risk as follows:
•
Insurance contracts issued:
At 31 January 2025, the Group expected to receive £25.7m of premiums in the future in relation to insurance
contracts that had already been entered into, representing management’s view of the Group’s maximum exposure to credit risk
from insurance contracts issued. However, the majority of these receivables were due in advance of the related insurance coverage, which
the Group would not have been liable for if the premiums were not paid. As a result, the credit risk associated with these receivables was
significantly mitigated and they were not recognised on the statement of financial position under the IFRS 17 PAA. The Group’s Insurance
Underwriting business was disposed of in the year ended 31 January 2026 (Note 38a) and, therefore, no balance is reported at
31 January 2026.
•
Reinsurance contracts:
The Group was exposed to the risk of default on its reinsurance arrangements when amounts recoverable
under those arrangements became due. Credit risk in respect of reinsurance arrangements was assessed from the time of entering into
a reinsurance contract. The Group’s reinsurance programme was only placed with reinsurers which met the Group’s financial strength
criteria. At 31 January 2025, the Group had a concentration of counterparty risk arising from reinsurance contracts, driven by a
material recovery arising from the Group’s motor quota share reinsurance arrangement. The highest amount of reinsurance contract
assets recoverable from a single counterparty at 31 January 2025 £21.0m. At 31 January 2025, this reinsurer had an AA credit rating.
The Group’s Insurance Underwriting business was disposed of in the year ended 31 January 2026 (Note 38a) and, therefore, no balances
are reported at 31 January 2026.
The Group’s maximum exposure to credit risk for the components of the statement of financial position at 31 January 2026 is the gross carrying
amount, except for trade receivables. The Group’s maximum exposure to credit risk for the components of the statement of financial position
at 31 January 2025 was the gross carrying amount, except for trade receivables and reinsurance contract assets. None of the financial assets
measured at amortised cost, other than trade receivables where a loss allowance has been determined as set out above, were impaired at the
reporting date.
Consolidated financial statements
Notes to the consolidated financial statements
continued
20 Financial and insurance risk management objectives and policies continued
b) Credit risk continued
Saga plc
Annual Report and Accounts 2026
162
The Group’s financial assets and reinsurance assets are analysed by credit risk rating as follows:
Ratings analysis
31 January 2026 |
||||||
£m |
AAA |
AA |
A |
BBB |
Unrated |
Total |
Derivative assets |
– |
– |
1.1 |
– |
– |
1.1 |
Total |
– |
– |
1.1 |
– |
– |
1.1 |
31 January 2025 |
||||||
£m |
AAA |
AA |
A |
BBB |
Unrated |
Total |
Debt securities |
22.8 |
53.2 |
52.4 |
50.3 |
– |
178.7 |
Money market funds held within Insurance Underwriting |
62.9 |
– |
– |
– |
– |
62.9 |
Deposits with financial institutions |
– |
1.0 |
10.5 |
– |
– |
11.5 |
Derivative assets |
– |
0.2 |
0.9 |
– |
– |
1.1 |
85.7 |
54.4 |
63.8 |
50.3 |
– |
254.2 |
|
Credit exposed component of reinsurance contract assets |
– |
92.8 |
24.3 |
– |
– |
117.1 |
Total |
85.7 |
147.2 |
88.1 |
50.3 |
– |
371.3 |
Debt securities, money market funds and the credit exposed component of reinsurance contract assets were held by the Group’s Insurance
Liquidity risk is the risk that the Group, although solvent, either does not have available sufficient financial resources to enable it to meet its
obligations as they fall due, or can secure them only at excessive cost. The Group’s approach to managing liquidity risk is to evaluate current
and expected liquidity requirements to ensure that it maintains sufficient reserves of cash or availability on its RCF. The Group managed its
obligations to pay claims to policyholders as they fell due by matching the maturity of investments to the expected maturity of claims payments.
The table below analyses the maturity profile of the Group’s financial liabilities and insurance contract liabilities. The analysis of non-derivative
financial liabilities is based on the remaining period at the reporting date to the contractual maturity date. At 31 January 2025, the analysis of
insurance contract liabilities included only the component of this balance that related to liabilities for incurred claims arising from portfolios of
insurance contracts that were in a liability position and was based on the estimates of the present value of the future cash flows expected to be
paid out in the periods presented (this excludes the risk adjustment). The Group’s Insurance Underwriting business was disposed of in the year
ended 31 January 2026 (Note 38a), and therefore, no balances are reported at 31 January 2026.
31 January 2026 |
On |
Less than |
1 to 2 |
2 to 3 |
3 to 4 |
4 to 5 |
Over 5 |
|
£m |
demand |
1 year |
years |
years |
years |
years |
years |
Total |
Ocean Cruise ship loans and term loan |
– |
54.2 |
46.4 |
43.8 |
43.8 |
378.9 |
57.1 |
624.2 |
Interest on Ocean Cruise ship loans |
– |
41.8 |
40.1 |
38.4 |
36.0 |
40.1 |
1.7 |
198.1 |
and term loan |
||||||||
Bank overdrafts |
0.3 |
– |
– |
– |
– |
– |
– |
0.3 |
Foreign currency and fuel derivative |
– |
2.7 |
0.4 |
– |
– |
– |
– |
3.1 |
liabilities |
||||||||
Interest rate swap liabilities |
– |
0.7 |
0.9 |
0.1 |
– |
– |
– |
1.7 |
Lease liabilities |
– |
7.1 |
6.6 |
6.5 |
4.2 |
4.1 |
9.9 |
38.4 |
Interest on lease liabilities |
– |
2.7 |
2.2 |
1.7 |
1.4 |
1.1 |
2.2 |
11.3 |
0.3 |
109.2 |
96.6 |
90.5 |
85.4 |
424.2 |
70.9 |
877.1 |
31 January 2025 |
On |
Less than |
1 to 2 |
2 to 3 |
3 to 4 |
4 to 5 |
Over 5 |
|
£m |
demand |
1 year |
years |
years |
years |
years |
years |
Total |
Bonds, Ocean Cruise ship loans and the |
– |
55.7 |
379.2 |
46.4 |
43.8 |
43.8 |
100.9 |
669.8 |
loan facility provided by Roger De Haan |
||||||||
Interest on bonds, Ocean Cruise ship |
– |
31.6 |
18.9 |
6.6 |
5.2 |
3.9 |
4.3 |
70.5 |
loans, and the loan facility provided |
||||||||
by Roger De Haan |
||||||||
Bank overdrafts |
1.6 |
– |
– |
– |
– |
– |
– |
1.6 |
Insurance contract liabilities |
– |
69.1 |
43.1 |
25.3 |
14.6 |
7.5 |
76.3 |
235.9 |
Foreign currency and fuel derivative |
– |
1.6 |
– |
– |
– |
– |
– |
1.6 |
liabilities |
||||||||
Lease liabilities |
– |
5.1 |
4.9 |
4.4 |
4.7 |
3.0 |
4.0 |
26.1 |
Interest on lease liabilities |
– |
1.6 |
1.2 |
0.9 |
0.5 |
0.3 |
0.2 |
4.7 |
1.6 |
164.7 |
447.3 |
83.6 |
68.8 |
58.5 |
185.7 |
1,010.2 |
Insurance contract liabilities were held by the Group’s Insurance Underwriting business (included within liabilities directly associated with assets
held for sale at 31 January 2025).
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
163
The table below sets out the remaining contractual maturities of the financial assets supporting the Group’s insurance contract liabilities
(included within liabilities directly associated with assets held for sale at 31 January 2025). It is presented on an undiscounted basis. The Group’s
Insurance Underwriting business was disposed of in the year ended 31 January 2026 (Note 38a) and, therefore, no balances are reported at
31 January 2026.
31 January 2025 |
Less than 1 |
1 to 2 |
2 to 3 |
3 to 4 |
4 to 5 |
Over 5 |
No |
|
£m |
year |
years |
years |
years |
years |
years |
maturity |
Total |
Debt securities |
77.2 |
50.9 |
35.4 |
9.0 |
7.4 |
13.3 |
– |
193.2 |
Money market funds held within |
– |
– |
– |
– |
– |
– |
62.9 |
62.9 |
Insurance Underwriting |
||||||||
77.2 |
50.9 |
35.4 |
9.0 |
7.4 |
13.3 |
62.9 |
256.1 |
d) Insurance risk (discontinued operations)
Insurance risk applied to the Group’s Insurance Underwriting business which was disposed of on 1 July 2025 (Note 38a) and included within
discontinued operations.
Insurance risk arose from the inherent uncertainties as to the occurrence, cost and timing of insured events that could lead to significant
individual or aggregated claims in terms of quantity or value. This could have been for a number of reasons, including weather-related events,
large individual claims, changes in claimant behaviour patterns, such as increased levels of fraudulent activities, the use of PPOs, prospective or
retrospective legislative changes, unresponsive and inaccurate pricing or reserving methodologies, and the deterioration in the Group’s ability
to effectively and efficiently handle claims while delivering excellent customer service.
The Group managed insurance risk within its risk management framework as set by the Board. The key policies and processes mitigating these
risks had been implemented, which included underwriting partnership arrangements, reinsurance excess of loss contracts, pricing policies and
claims management, and administration policies.
i) Underwriting and pricing risk
The Group primarily underwrote motor insurance for private cars in the UK. The book consisted of a large number of individual risks which were
widely spread geographically, which helped to minimise concentration risk. The Group had controls in place to restrict access to its products to
only those risks that it wished to underwrite.
The Group had management information to allow it to monitor underwriting performance on a continuous basis and the ability to make pricing
and underwriting changes quickly. The Group undertook detailed statistical analysis of underwriting experience for each rating factor, and
combination of rating factors, to enable it to adjust pricing for emerging trends.
ii) Reserving risk
Reserving risk was the risk that insufficient funds have been set aside to settle claims as they fall due. The Group undertook regular internal
actuarial reviews and commissioned external actuarial reviews at least once a year. These reviews estimated the future liabilities to consider the
adequacy of the provisions.
Claims which were subject to PPOs were a significant source of uncertainty within the Group’s liability for incurred claims. Cash flow projections
were undertaken for PPO claims to estimate the gross and net of reinsurance provisions required.
The Group purchased reinsurance to reduce the impact of individual large losses or accumulations from a single catastrophic event. During 2018,
the Group entered into a funds-withheld quota share reinsurance contract that reinsured 80% of the Group’s motor claims risks limited by a
loss ratio cap of 130%, effective from 1 February 2019. Prior to this, the Group had a funds-withheld quota share reinsurance contract in place
that reinsured 75% of the Group’s motor claims risks limited by a loss ratio cap of 120%. The Group also purchased individual excess of loss
protections for the motor portfolio to limit the impact of a single large claim. Similar protections were in place for all years for which the Group
had underwritten motor business.
Reinsurance recoveries on individual excess of loss protections would have taken many years to collect, particularly if a claim was subject to a PPO.
This meant that the Group had exposure to reinsurance credit risk for many years. Reinsurers were, therefore, required to have strong credit
ratings and their financial health was regularly monitored.
Consolidated financial statements
Notes to the consolidated financial statements
continued
20 Financial and insurance risk management objectives and policies continued
d) Insurance risk (discontinued operations) continued
Saga plc
Annual Report and Accounts 2026
164
iv) Sensitivities
The following table demonstrates the impact on profit or loss before tax, and equity, of reasonably possible changes in insurance risk variables
at 31 January 2025. These impacts are shown both gross and net of reinsurance. It was assumed that all other variables remain constant.
The Group’s Insurance Underwriting business was disposed of in the year ended 31 January 2026 (Note 38a), and therefore, no balances are
reported at 31 January 2026.
2025 |
||
Impact on profit after tax |
||
and on equity |
||
Gross of |
Net of |
|
£m |
reinsurance |
reinsurance |
Change in the confidence level of liabilities for incurred claims |
||
5pp increase to 90% net confidence level |
(8.8) |
(0.9) |
5pp decrease to 80% net confidence level |
6.6 |
0.7 |
Change in the confidence level of the onerous contract provision |
||
5pp increase to 90% net confidence level |
(1.9) |
(1.9) |
5pp decrease to 80% net confidence level |
1.0 |
1.0 |
Change in non-PPO claim inflation assumption within liabilities for incurred claims |
||
100bps increase |
(3.1) |
(0.9) |
100bps decrease |
3.0 |
0.8 |
The impact of any change in the PPO claim inflation (specifically the carer wage inflation assumption) was not shown in the table above as
e) Operational risk
Effective operational risk management requires the Group to identify, assess, manage, monitor, report and mitigate all areas of exposure.
The Group operates across a range of segments, and operational risk is inherent in all the Group’s products and services, arising from the
operation of assets, from external events and dependencies, and from internal processes and systems.
The Group manages its operational risk through the risk management framework agreed by the Board, and through the use of risk management
tools which, together, ensure that operational risks are identified, managed and mitigated to the level accepted, and that contingency processes
and disaster recovery plans are in place. Regular reporting is undertaken to segment boards and includes details of new and emerging risks, as
well as monitoring of existing risks. Testing of contingency processes and disaster recovery plans is undertaken to ensure the effectiveness of
these processes.
All the Group’s operations are dependent on: the proper functioning of its IT and communication systems; its properties and other
infrastructure assets; the need to adequately maintain and protect customer and employee data and other information; and the ability of the
Group to attract and retain colleagues. Specific areas of operational risk by segment include:
i) Travel
The Travel segment operates two Ocean Cruise ships, which are the Group’s largest trading assets. Risk to the operation of these cruise ships
arises from the impact of mechanical or other malfunction, from non-compliance with regulatory requirements, and from global weather and
socioeconomic events. The tour holidays operated by the segment are also affected by global weather and socioeconomic events, which impact
either the Group directly or its suppliers. The Travel segment transacts with multiple suppliers, which minimises the impact of any
socioeconomic events affecting its suppliers.
ii) Insurance
The Insurance Broking business is required to comply with various operational regulatory requirements, primarily in the UK. Up to the date of its
disposal on 1 July 2025 (Note 38a), the Group’s Insurance Underwriting business was required to comply with various operational regulatory
requirements within Gibraltar. To the extent that significant external events could have increased the incidence of claims, these would have
placed additional strain on the claims handling function, but any financial impact of such an event was considered to be an insurance risk.
iii) Other Businesses and Central Costs
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
165
A structured entity is defined as an entity that has been designed so that voting, or similar, rights are not the dominant factor in deciding who
controls the entity, such as when any voting rights relate to the administrative tasks only and the relevant activities are directed by means of
contractual agreements. The Group had interests in unconsolidated structured entities in the form of investment funds comprising money
market funds. These money market funds were held by the Group’s Insurance Underwriting business (included within assets held for sale at
31 January 2025).
The nature and purpose of the money market funds is to provide maximum security and liquidity for the funds invested, while also providing an
adequate return. The money market funds used by the Group were all members of the Institutional Money Market Funds Association. They were
thus required to maintain specified liquidity and diversification characteristics of their underlying portfolios, which comprised investment grade
investments in financial institutions.
The Group invested in unconsolidated structured entities as part of its investment activities. The Group did not sponsor any of the
unconsolidated structured entities.
At 31 January 2025, the Group’s total interest in unconsolidated structured entities is analysed as follows:
Carrying |
Interest |
Fair value |
|
value |
income |
losses |
|
At 31 January 2025 |
£m |
£m |
£m |
Money market funds |
62.9 |
2.0 |
– |
The Group’s Insurance Underwriting business was disposed of in the year ended 31 January 2026 (Note 38a) and, therefore, no balances are
reported at 31 January 2026.
These investments were typically managed under credit risk management as described in Note 20. The Group’s maximum exposure to loss
on the interests presented above was the carrying amount of the Group’s investments. No further loss could have been made by the Group in
relation to these investments. For this reason, the total assets of the entities were not considered meaningful for the purposes of understanding
2025 |
||
2026 |
(re-presented 11 ) |
|
£m |
£m |
|
Raw materials |
3.4 |
3.7 |
Technical stocks |
5.0 |
4.5 |
Finished goods |
– |
0.1 |
8.4 |
8.3 |
Raw materials primarily relate to Ocean Cruise ship fuel, food, bar and sundry stocks. Technical stocks are spare parts for the Group’s Ocean
2026 |
2025 |
|
£m |
£m |
|
Trade receivables (Note 20b) |
99.9 |
101.2 |
Loss allowance (Note 20b) |
(1.5) |
(1.5) |
98.4 |
99.7 |
|
Amounts due from discontinued operations |
– |
2.7 |
Other receivables |
8.1 |
7.0 |
Prepayments |
22.5 |
24.6 |
Contract cost assets (Note 3b) |
8.1 |
4.9 |
Other taxes and social security costs |
6.2 |
4.8 |
143.3 |
143.7 |
An explanation of how the Group manages and measures the credit risk of trade receivables can be found in Note 20b. The Group expects trade
and other receivables to be settled within 12 months and, therefore, they are classified as current in nature. Due to the short-term nature of the
current receivables, their carrying amount is considered to be the same as their fair value.
11
Following a review by management of the classification of inventories, finished goods of £3.5m relating to the Ocean Cruise business have been reclassified to raw materials in the
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
166
The CAA regulated the Group’s River Cruise and Holidays businesses during the year; these businesses are required to hold cash in a
ring-fenced arrangement. In respect of the non-flight components of the Travel business, to comply with its regulatory obligations, the Group
is required to arrange financial security to protect customer monies and this is currently provided through ABTA. In addition, the Group is
required to make ATOL Protection Contributions, which the Group pays into a ring-fenced account.
Prior to 1 October 2024, 70% of customer monies received in advance in relation to ATOL licensable bookings were held in an escrow
arrangement (
Escrow Accounting
) until after the customer had travelled, when the Group had fulfilled all of its performance obligations with
the customer. From 1 October 2024, in respect of the Holidays business, the Group moved from Escrow Accounting to simply holding cash
within the business, in respect of the 70% element of customer monies. The remaining 30% is used to support the required prepayments
in advance of operating the customer’s holiday, namely flight costs. Interest arising from the funds held in escrow belongs to the Group.
The escrow arrangement is governed by a deed between the Group, the CAA Air Travel Trustees and an independent Trustee, PT Trustees
Limited, which determines the inflows and outflows from the accounts.
2026 |
2025 |
|
£m |
£m |
|
Cash at bank and in hand |
70.2 |
93.0 |
Short-term deposits and money market funds held outside of the Insurance Underwriting business |
186.8 |
36.2 |
Cash and short-term deposits |
257.0 |
129.2 |
Bank overdraft |
(0.3) |
(0.2) |
Cash and cash equivalents held by disposal group (including money market funds) |
– |
74.1 |
Cash and cash equivalents in the consolidated statement of cash flows |
256.7 |
203.1 |
businesses, which are subject to contractual or regulatory restrictions (Note 35); and additional amounts paid into an escrow account relating to
the Saga Pension Scheme (Note 27). Included within cash and cash equivalents at 31 January 2025 were amounts held by the Group’s Insurance
Underwriting business (included within assets held for sale), River Cruise and Holidays and Insurance Broking businesses, which were subject to
contractual or regulatory restrictions (Note 35); and additional amounts paid into an escrow account relating to the Saga Pension Scheme
(Note 27). The amounts held are not readily available to be used for other purposes within the Group and total £67.0m (2025: £123.8m).
Available Cash
12
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are typically made for varying periods
of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective
short-term deposit rates.
2026 |
2025 |
|
£m |
£m |
|
Trade payables |
168.5 |
145.5 |
Amounts due to discontinued operations |
– |
54.4 |
Other payables |
16.8 |
9.0 |
Other taxes and social security costs |
5.6 |
2.1 |
Assets in the course of construction |
0.4 |
0.4 |
Accruals |
62.0 |
43.9 |
253.3 |
255.3 |
All trade and other payables are current in nature. The carrying amounts of trade and other payables are considered to be the same as their fair
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
167
The Group operates retirement benefit schemes for the employees of the Group, consisting of a defined contribution plan and a legacy defined
benefit plan.
In July 2021, following the completion of a review of the Group’s pension arrangements, a consultation process with active members was launched.
The consultation process concluded during October 2021 and, with effect from 31 October 2021, the Group closed both its schemes to future
accrual: the Saga Pension Scheme (its defined benefit plan) and the Saga Workplace Pension Plan (its defined contribution plan). In their place,
the Group launched a new defined contribution pension scheme arrangement, operated as a master trust. This move served to reduce the risk
of further deficits developing in the future on the defined benefit scheme, while moving to a fairer scheme for all colleagues.
There was one defined contribution scheme in the Group at 31 January 2026 (2025: one). The total charge for the year in respect of the defined
contribution scheme was £4.8m (2025: £5.2m). The assets of this scheme are held separately from those of the Group in funds under the
The Group operated a funded defined benefit scheme, the Saga Pension Scheme, which was closed to future accrual on 31 October 2021. From
1 November 2021, members moved from active to deferred status, with future indexation of deferred pensions before retirement measured by
reference to the Consumer Price Index (
CPI
). There will be no further service charges relating to the scheme and no future monthly employer
contributions for current service.
The scheme is governed by the employment laws of the UK. The level of benefits provided depends on the member’s length of service and
average salary while a member of the scheme. The scheme requires contributions to be made to a separately administered fund which is
governed by a Board of Trustees and consists of an equal number of employer and employee representatives. The Board of Trustees is
responsible for the administration of the plan assets and for the definition of the investment strategy.
The long-term investment objectives of the Trustees and the Group are to limit the risk of the assets failing to meet the liabilities of the scheme
over the long term, and to maximise returns consistent with an acceptable level of risk so as to control the long-term costs of the scheme.
To meet those objectives, the scheme’s assets are invested in different categories of assets, with different maturities designed to match
liabilities as they fall due. The investment strategy will continue to evolve over time and is expected to match the liability profile increasingly
closely. The pension liability is exposed to inflation rate risks and changes in the life expectancy of members. As the plan assets include
investments in quoted equities, the Group is exposed to equity market risk. The Group provided super security to the Trustees of the scheme,
which ranks before any liabilities under the senior facilities agreement (as detailed in Note 30). The value of the security was increased from
being capped at £47.5m, to being capped at £51.4m, under the latest triennial valuation of the scheme at 31 January 2023, which was completed
in January 2025.
The fair value of the assets and present value of the obligations of the Saga defined benefit scheme are as follows:
2026 |
2025 |
|
£m |
£m |
|
Fair value of scheme assets |
204.1 |
200.1 |
Present value of defined benefit obligation |
(229.5) |
(239.9) |
Defined benefit scheme liability |
(25.4) |
(39.8) |
The present values of the defined benefit obligation were measured using the projected unit credit valuation method.
During the year ended 31 January 2026, the net liability position of the Saga scheme reduced by £14.4m, resulting in an overall scheme deficit
of £25.4m, mainly as a result of recovery plan contributions of £5.8m being paid by the Group; a Section 75 debt settlement of £3.2m in relation
to the completion of the disposal of the Group’s Insurance Underwriting business, AICL; the adoption of the latest cash commutation factors
(effective from July 2025), which led to a decrease in the value placed on the deferred liabilities; and a reduction in the value placed on the
liabilities as a result of increases in bond yields over the year. The latter was partially offset by the movement in matching assets held by the
scheme, which also decreased. The £5.8m deficit funding contributions were paid by the Group under a recovery plan agreed under the triennial
valuation of the scheme at 31 January 2023.
The movements observed in the scheme’s assets and obligations were impacted by macroeconomic factors during the year, when actual
inflation levels reduced compared to recent years, high-quality long-term corporate bond yields remained volatile and there continues to be
rising cost of living pressures. The present value of defined benefit obligations decreased by £10.4m to £229.5m, primarily as a result of
increases in bond yields over the year. The fair value of scheme assets increased by £4.0m, to £204.1m, largely driven by the recovery plan and
Section 75 contributions.
Consolidated financial statements
Notes to the consolidated financial statements
continued
27 Retirement benefit schemes continued
b) Defined benefit plan continued
Saga plc
Annual Report and Accounts 2026
168
The following table summarises the components of the net benefit expense recognised in the income statement, OCI and amounts recognised
in the statement of financial position for the scheme for the year ended 31 January 2026:
Defined | |||
Fair value | Defined | benefit | |
of scheme | benefit | scheme | |
assets | obligation | liability | |
£m | £m | £m | |
1 February 2025 | 200.1 | (239.9) | (39.8) |
Pension cost charge to income statement | |||
Net interest | 10.9 | (13.0) | (2.1) |
Included in income statement | 10.9 | (13.0) | (2.1) |
Return on plan assets (excluding amounts included in net interest expense) | (8.4) | – | (8.4) |
Actuarial changes arising from changes in financial assumptions | – | 10.7 | 10.7 |
Actuarial changes arising from changes in demographic assumptions | – | (0.5) | (0.5) |
Experience adjustments | – | 5.7 | 5.7 |
Subtotal included in OCI | (8.4) | 15.9 | 7.5 |
Benefits paid | (7.5) | 7.5 | – |
Section 75 contribution from AICL (see Note 38a) | 3.2 | – | 3.2 |
Total contributions by employer | 5.8 | – | 5.8 |
At 31 January 2026 | 204.1 | (229.5) | (25.4) |
The following table summarises the components of the net benefit expense recognised in the income statement, OCI and amounts recognised
in the statement of financial position for the scheme for the year ended 31 January 2025:
Defined | |||
Fair value | Defined | benefit | |
of scheme | benefit | scheme | |
assets | obligation | liability | |
£m | £m | £m | |
1 February 2024 | 204.5 | (252.4) | (47.9) |
Pension cost charge to income statement | |||
Net interest | 10.2 | (12.5) | (2.3) |
Included in income statement | 10.2 | (12.5) | (2.3) |
Return on plan assets (excluding amounts included in net interest expense) | (13.0) | – | (13.0) |
Actuarial changes arising from changes in financial assumptions | – | 18.1 | 18.1 |
Actuarial changes arising from changes in demographic assumptions | – | 0.4 | 0.4 |
Experience adjustments | – | (0.9) | (0.9) |
Subtotal included in OCI | (13.0) | 17.6 | 4.6 |
Benefits paid | (7.4) | 7.4 | – |
Total contributions by employer | 5.8 | – | 5.8 |
At 31 January 2025 | 200.1 | (239.9) | (39.8) |
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
169
The major categories of assets in the scheme are as follows:
2026 | 2025 | |
£m | £m | |
Equities | 59.2 | 49.9 |
Bonds | 81.6 | 83.6 |
Property and alternatives | 33.6 | 55.5 |
Hedge funds | 21.1 | 6.1 |
Insured annuities | 2.9 | 3.0 |
Cash and other | 5.7 | 2.0 |
Total | 204.1 | 200.1 |
Equities, bonds, property and hedge funds are not quoted in active markets. Unit prices of approximately 17% of the assets were not available
at 31 January 2026 and were based on unit prices prior to the statement of financial position date (2025: approximately 28%). The impacts of
COVID-19 over the past six years, and the Russia-Ukraine conflict, increased the level of uncertainty and volatility in global financial markets.
While the ultimate extent of the effect of this on the asset portfolio is not possible to quantify, management used the latest available fund pricing
data to derive the valuations of assets which are not quoted in active markets. Where assets do not have an observable market price,
approximate techniques were used by the valuer to arrive at a valuation.
The scheme’s investment strategy is to invest broadly 60% in return-seeking assets and 40% in matching assets (mainly government bonds).
This strategy reflects the scheme’s liability profile and the Trustees’ and Group’s attitude to risk. The scheme’s investments include interest rate
and inflation hedging. The Trustees’ investment strategy also includes investing in liability-driven investment, the value of which will increase with
decreases in interest rates and will move with inflation expectations. During the year, the scheme hedged around 85% of interest rate risk and
inflation risk of the liabilities.
Included within bonds is a hedging component totalling £81.6m (2025: £83.6m). The property and alternatives category includes illiquid credit
funds totalling £33.6m (2025: £47.0m) held as part of the return-seeking asset portfolio.
The pension scheme has not invested in any of the Group’s own financial instruments.
The principal assumptions used in determining pension benefit obligations for the scheme are shown below:
2026 | 2025 | |
Real rate of increase of pensions in payment | 2.90% | 3.10% |
Real rate of increase of pensions in deferment | 3.00% | 3.00% |
Discount rate – pensioner | 5.60% | 5.45% |
Discount rate – non-pensioner | 5.80% | 5.50% |
RPI inflation – pensioner | 3.00% | 3.30% |
RPI inflation – non-pensioner | 3.15% | 3.15% |
CPI inflation – pensioner | 2.75% | 3.00% |
CPI inflation – non-pensioner | 3.00% | 2.95% |
Life expectancy of a member retiring in 20 years’ time at age 60 – Male | 26.7 yrs | 26.4 yrs |
Life expectancy of a member retiring in 20 years’ time at age 60 – Female | 28.7 yrs | 28.6 yrs |
Mortality base tables | ||
Continuous Mortality Investigation ( CMI ) Standard tables – Male (all amounts) | S3PA | S3PA |
CMI standard tables – Female (middle amounts) | S3PA | S3PA |
Scheme specific adjustment – Active male | n/a | n/a |
Scheme specific adjustment – Active female | n/a | n/a |
Scheme specific adjustment – Deferred male | 116% | 116% |
Scheme specific adjustment – Deferred female | 116% | 116% |
Scheme specific adjustment – Pensioner male | 106% | 106% |
Scheme specific adjustment – Pensioner female | 111% | 111% |
The discount rate assumption is used to calculate the defined benefit obligation. The rate is derived from high-quality corporate bonds, generally
regarded as those with an AA rating. As in the prior year, management opted to use the XPS Single Agency curve for deriving the discount rate
assumptions at January 2026.
In recent years, management made an allowance for inflation risk premium of 0.2% due to the scheme losing some of its inflation hedge.
The inflation risk premium of 0.2% was retained for the valuation at 31 January 2026.
Consolidated financial statements
Notes to the consolidated financial statements
continued
27 Retirement benefit schemes continued
b) Defined benefit plan continued
Saga plc
Annual Report and Accounts 2026
170
Mortality assumptions are set using standard tables based on specific experience, where available, and allow for future mortality improvements.
The scheme assumption is that a member currently aged 60 will live, on average, for a further 25.1 years if they are male and, on average, for a
further 27.1 years if they are female. For the valuation at 31 January 2026, mortality assumptions were based on the latest data released by the
CMI, being their CMI_2024 data model. The CMI 2024 model introduces an overlay function that models the rise and subsequent fall in mortality
rates due to the COVID-19 pandemic, with no weighting parameter. This has acted to marginally increase the value of the liabilities in the scheme.
A quantitative sensitivity analysis for significant assumptions at 31 January 2026 and their impact on the scheme liabilities is as follows:
Assumptions |
Discount rate |
Future inflation |
Life expectancy at age 65 |
|||
Sensitivity |
+/– 0.25% |
+/– 0.25% |
+/– 1 year |
|||
Increase |
Decrease |
Increase |
Decrease |
Increase |
Decrease |
|
Impact £m |
(8.9) |
9.4 |
4.8 |
(5.1) |
5.6 |
(5.7) |
Note: a positive impact represents an increase in the net defined benefit liability.
The sensitivity analyses are based on a change in an assumption, while holding all other assumptions constant. When calculating the sensitivity
of the defined benefit obligation to significant actuarial assumptions, the same method was applied as when calculating the pension liability
recognised within the statement of financial position. The methods and types of assumption used in preparing the sensitivity analysis did not
change compared with the prior period.
The expected contribution in respect of the accrual of benefits payable to the scheme for the next financial year is £nil and the average duration
of the defined benefit plan obligation at the end of the reporting period reduced slightly from 17 years, down to 16-17 years. Formal actuarial
valuations take place every three years for the scheme. The assumptions adopted for actuarial valuations are determined by the Trustees,
agreed with the Group, and are normally more prudent than the assumptions adopted for IAS 19 purposes, which are a best estimate. Where a
funding deficit is identified, the Group and the Trustees may agree a deficit recovery plan to pay additional contributions above those needed to
fund the scheme.
The Group’s latest approved triennial valuation of the Saga Scheme defined benefit plan at 31 January 2023 was completed in January 2025.
Saga, and certain guarantor subsidiaries in the Group, provided super security to the Trustees of the scheme, which ranks before any liabilities
under the Group’s bank facilities. The value of the security was increased from being capped at £47.5m, to being capped at £51.4m under the
latest triennial valuation. Further to this valuation, a recovery plan is in place for the scheme. Under an agreed deficit recovery plan totalling
£62.0m, the Group made additional payments of £5.8m during the years ended 31 January 2026 and 31 January 2025 and will make annualised
payments of £5.8m rising to £7.2m over the next seven financial years, with the last payment being made on 30 November 2032. In addition,
the current annual recovery plan payments changed to equal quarterly payments with effect from the 28 February 2025 payment.
The total expected contribution in the year ending 31 January 2027 is £5.8m and relates entirely to the recovery payment.
The Group also agreed to pay additional amounts into an escrow account, should asset returns fall below an agreed level over set periods of time.
Dependent upon the level of return on the scheme’s assets between 31 January 2023 and 31 January 2033, any amount in the escrow account
will be released to either the Group, or the scheme, by 30 June 2033.
In October 2024, the Group agreed certain amendments with the Trustees in order to permit, among other things, the guarantees to be
granted in relation to the disposal of the Group’s Insurance Underwriting business and the establishment of the Affinity Partnership with Ageas
(Note 38a). On completion of the disposal of the Group’s Insurance Underwriting business, AICL, a Section 75 contribution in relation to its share
of the scheme’s liabilities of £3.2m was triggered.
In January 2025, the Group agreed certain amendments with the Trustees in order to permit, among other things, the completion of refinancing
of the Group’s corporate debt (Note 30). One of the amendments agreed was an increase in the super security from being capped at £47.5m,
to being capped at £51.4m (see above).
A High Court legal ruling in June 2023 (Virgin Media Limited v NTL Pension Trustees II Limited) decided that certain rule amendments were
invalid if they were not accompanied by the correct actuarial Section 37 certificate confirmation. While the ruling only applied to the specific
pension scheme in question, it could be expected to apply across other pension schemes that were contracted out on a salary-related basis and
made amendments between 6 April 1997 and 6 April 2016. The ruling was appealed but, in July 2024, the Court of Appeal dismissed the appeal.
On 5 June 2025, the Government announced that they will introduce legislation to give affected pension schemes the ability to retrospectively
obtain written actuarial confirmation that historic benefit changes met the necessary standards.
On 2 September 2025, the Government published draft amendments to the Pensions Scheme Bill, which would give affected pension schemes
the ability to retrospectively obtain written actuarial confirmation that historical benefit changes met the necessary standards. The draft
legislation will need to be agreed by both Houses of Parliament before it passes into law; however, no additional liabilities are now expected to
arise as a result of the Virgin Media court ruling.
The Group is considering the implications of the case on its defined benefit scheme. At 31 January 2026, the defined benefit obligation for the
Group’s scheme was calculated on the basis of the pension benefits currently being administered. The Group has not, as yet, assessed any
potential impact due to the court ruling. However, the Group received initial legal advice, which suggests that there is no reason, based on
the checks carried out, to assume that any historical scheme changes were not validly made, and that it is reasonable for the Trustees to take
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
171
a) Reconciliation of opening and closing balances
The following tables reconcile the opening and closing balances held in relation to insurance and reinsurance contracts (Note 38a):
Liabilities for |
Liabilities for |
||||
remaining coverage |
incurred claims |
||||
Estimate of |
|||||
Excluding |
the present |
||||
loss |
Loss |
value of future |
Risk |
||
component |
component |
cash flows |
adjustment |
Total |
|
£m |
£m |
£m |
£m |
£m |
|
At 1 February 2025 |
|||||
Insurance contract liabilities |
(46.3) |
(1.8) |
(235.9) |
(33.7) |
(317.7) |
Insurance revenue (Note 38a) |
66.6 |
– |
– |
– |
66.6 |
Incurred claims and related expenses |
– |
2.3 |
(54.2) |
(3.8) |
(55.7) |
Changes to liabilities for incurred claims |
– |
– |
11.6 |
6.2 |
17.8 |
Insurance acquisition cash flows expensed |
(13.5) |
– |
– |
– |
(13.5) |
Losses on onerous contracts and changes in such losses |
– |
(6.5) |
– |
– |
(6.5) |
Other incurred insurance service expenses |
– |
– |
(4.6) |
– |
(4.6) |
Insurance service (expenses)/income (Note 38a) |
(13.5) |
(4.2) |
(47.2) |
2.4 |
(62.5) |
Insurance finance expense (Note 38a) |
– |
– |
(4.6) |
(0.7) |
(5.3) |
Total changes in the consolidated income statement |
53.1 |
(4.2) |
(51.8) |
1.7 |
(1.2) |
Cash flows |
|||||
Premiums received |
(78.4) |
– |
– |
– |
(78.4) |
Insurance acquisition cash flows incurred |
13.5 |
– |
– |
– |
13.5 |
Claims and other expenses paid |
– |
– |
64.8 |
– |
64.8 |
Total cash flows |
(64.9) |
– |
64.8 |
– |
(0.1) |
Disposed of with subsidiary undertaking |
58.1 |
6.0 |
222.9 |
32.0 |
319.0 |
At 31 January 2026 |
|||||
Insurance contract liabilities (Note 38a) |
– |
– |
– |
– |
– |
Assets for |
Amounts recoverable |
||||
remaining coverage |
on incurred claims |
||||
Estimate of |
|||||
Excluding |
the present |
||||
loss-recovery |
Loss-recovery |
value of future |
Risk |
||
component |
component |
cash flows |
adjustment |
Total |
|
£m |
£m |
£m |
£m |
£m |
|
At 1 February 2025 |
|||||
Reinsurance contract (liabilities)/assets |
(9.3) |
– |
88.9 |
28.2 |
107.8 |
Allocation of reinsurance premiums |
(4.7) |
– |
– |
– |
(4.7) |
Amounts recoverable for incurred claims and |
|||||
other expenses |
– |
– |
2.6 |
0.1 |
2.7 |
Changes to amounts recoverable for incurred claims |
– |
– |
(0.6) |
(2.8) |
(3.4) |
Effect of changes in the risk of non-performance of |
|||||
reinsurance contracts |
– |
– |
(0.2) |
– |
(0.2) |
Net (expense)/income from reinsurance contracts |
|||||
(Note 38a) |
(4.7) |
– |
1.8 |
(2.7) |
(5.6) |
Reinsurance finance income (Note 38a) |
– |
– |
1.6 |
0.6 |
2.2 |
Total changes in the consolidated income statement |
(4.7) |
– |
3.4 |
(2.1) |
(3.4) |
Cash flows |
|||||
Premiums paid |
2.5 |
– |
– |
– |
2.5 |
Amounts received |
– |
– |
(3.3) |
– |
(3.3) |
Total cash flows |
2.5 |
– |
(3.3) |
– |
(0.8) |
Disposed of with subsidiary undertaking |
11.5 |
– |
(89.0) |
(26.1) |
(103.6) |
At 31 January 2026 |
|||||
Reinsurance contract (liabilities)/assets (Note 38a) |
– |
– |
– |
– |
– |
In the year to 31 January 2025, the Insurance Underwriting business was classified as a discontinued operation. As a result, insurance and
reinsurance contract liabilities and assets at 31 January 2025 were reclassified as liabilities directly associated with assets held for sale and
assets held for sale respectively
Consolidated financial statements
Notes to the consolidated financial statements
continued
28 Insurance and reinsurance contract liabilities and assets continued
a) Reconciliation of opening and closing balances continued
Saga plc
Annual Report and Accounts 2026
172
Liabilities for | Liabilities for | ||||
remaining coverage | incurred claims | ||||
Estimate of | |||||
Excluding | the present | ||||
loss | Loss | value of future | Risk | ||
component | component | cash flows | adjustment | Total | |
£m | £m | £m | £m | £m | |
At 1 February 2024 | |||||
Insurance contract liabilities | (56.6) | (16.1) | (286.4) | (40.2) | (399.3) |
Insurance revenue (Note 38a) | 197.1 | – | – | – | 197.1 |
Incurred claims and related expenses | – | 20.7 | (148.1) | (7.1) | (134.5) |
Changes to liabilities for incurred claims | – | – | 37.0 | 15.5 | 52.5 |
Insurance acquisition cash flows expensed | (22.7) | – | – | – | (22.7) |
Losses on onerous contracts and changes in such losses | – | (6.4) | – | – | (6.4) |
Other incurred insurance service expenses | – | – | (13.2) | – | (13.2) |
Insurance service (expenses)/income (Note 38a) | (22.7) | 14.3 | (124.3) | 8.4 | (124.3) |
Insurance finance expense (Note 38a) | – | – | (13.6) | (1.9) | (15.5) |
Total changes in the consolidated income statement | 174.4 | 14.3 | (137.9) | 6.5 | 57.3 |
Cash flows | |||||
Premiums received | (186.8) | – | – | – | (186.8) |
Insurance acquisition cash flows incurred | 22.7 | – | – | – | 22.7 |
Claims and other expenses paid | – | – | 188.4 | – | 188.4 |
Total cash flows | (164.1) | – | 188.4 | – | 24.3 |
At 31 January 2025 | |||||
Insurance contract liabilities | (46.3) | (1.8) | (235.9) | (33.7) | (317.7) |
Assets for | Amounts recoverable | ||||
remaining coverage | on incurred claims | ||||
Estimate of | |||||
Excluding | the present | ||||
loss-recovery | Loss-recovery | value of future | Risk | ||
component | component | cash flows | adjustment | Total | |
£m | £m | £m | £m | £m | |
At 1 February 2024 | |||||
Reinsurance contract (liabilities)/assets | (3.1) | 1.3 | 141.3 | 33.7 | 173.2 |
Allocation of reinsurance premiums | (17.1) | – | – | – | (17.1) |
Amounts recoverable for incurred claims and other expenses | – | (1.5) | (11.3) | 3.7 | (9.1) |
Changes to amounts recoverable for incurred claims | – | – | (32.5) | (10.8) | (43.3) |
Loss-recovery on onerous underlying contracts and | |||||
adjustments | – | 0.2 | – | – | 0.2 |
Effect of changes in the risk of non-performance of | |||||
reinsurance contracts | – | – | 2.1 | – | 2.1 |
Net expense from reinsurance contracts (Note 38a) | (17.1) | (1.3) | (41.7) | (7.1) | (67.2) |
Reinsurance finance income (Note 38a) | – | – | 5.7 | 1.6 | 7.3 |
Total changes in the consolidated income statement | (17.1) | (1.3) | (36.0) | (5.5) | (59.9) |
Cash flows | |||||
Premiums paid | 10.9 | – | – | – | 10.9 |
Amounts received | – | – | (16.4) | – | (16.4) |
Total cash flows | 10.9 | – | (16.4) | – | (5.5) |
At 31 January 2025 | |||||
Reinsurance contract (liabilities)/assets | (9.3) | – | 88.9 | 28.2 | 107.8 |
In the year to 31 January 2025, the Insurance Underwriting business was classified as a discontinued operation. As a result, insurance and
reinsurance contract liabilities and assets at 31 January 2025 were reclassified as liabilities directly associated with assets held for sale and
assets held for sale respectively.
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
173
b) Insurance finance income or expense
The following table provides further detail on insurance finance income or expenses arising from insurance and reinsurance contracts:
| 2026 |
2025 |
|||||
Insurance |
Insurance |
|||||
contracts |
Reinsurance |
contracts |
Reinsurance |
|||
(gross) |
contracts |
Net |
(gross) |
contracts |
Net |
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Unwind of discounting of liabilities for incurred claims |
(4.9) |
2.1 |
(2.8) |
(15.5) |
7.9 |
(7.6) |
Impact of change in the discount rate on liabilities for |
||||||
incurred claims: Non-PPOs |
(0.4) |
0.3 |
(0.1) |
1.3 |
(0.7) |
0.6 |
Impact of change in the discount rate on liabilities for |
||||||
incurred claims: PPOs |
6.7 |
(4.7) |
2.0 |
8.7 |
(5.8) |
2.9 |
Impact of change in carer wage inflation assumption for |
||||||
PPO liabilities for incurred claims |
(6.7) |
4.5 |
(2.2) |
(10.0) |
5.9 |
(4.1) |
Net finance (expense)/income from insurance and |
||||||
reinsurance contracts |
(5.3) |
2.2 |
(3.1) |
(15.5) |
7.3 |
(8.2) |
Insurance finance income or expenses are conceptually comparable to investment income or expenses arising from financial assets held within
the Insurance Underwriting business:
•
The expense created by the unwind of discounting of liabilities for incurred claims is conceptually similar to interest income derived from
financial assets.
•
The impact of the change in the discount rate on liabilities for incurred claims is conceptually similar to fair value gains or losses arising on
financial assets, with both significantly impacted by changes in market interest rates.
However, the relevant amounts may differ for the following reasons:
•
Insurance finance income or expenses arose solely from liabilities for incurred claims and corresponding reinsurance assets, whereas the
financial assets held within the Insurance Underwriting business supported the Group’s wider insurance liabilities (including liabilities for
remaining coverage) and capital requirements. This led to differences between the value and duration characteristics of those financial
assets and those of the liabilities for incurred claims which, in turn, led to differences between the investment income or expenses arising
from those financial assets and insurance finance income or expense.
•
Investment income or expenses included compensation for credit risk associated with the financial assets, with any change in credit risk
being reflected in fair value gains or losses on those securities. Credit risk was explicitly excluded from the IFRS 17 discount rate and,
2026 |
2025 |
|
£m |
£m |
|
Deferred revenue (Note 3b) |
252.2 |
176.8 |
252.2 |
176.8 |
|
Current |
183.2 |
171.7 |
Non-current |
69.0 |
5.1 |
252.2 |
176.8 |
Deferred revenue primarily comprises advance amounts received from customers within the Travel segment for cruises and holidays booked,
but not travelled, with departure dates after the reporting date; insurance premium street pricing adjustments and revenues received in
advance in the Insurance segment in respect of insurance policies with a cover start date after the reporting date (where the policy was not
underwritten by the Group); and motor and home insurance Affinity Partnership consideration received from Ageas (Note 38a). All represent
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
174
2026 |
2025 |
|
£m |
£m |
|
Bond |
– |
250.0 |
Term loan |
335.0 |
– |
DDTL |
– |
– |
Ocean Cruise ship loans |
289.2 |
344.8 |
Loan facility provided by Roger De Haan |
– |
75.0 |
RCF |
– |
– |
Accrued interest and fees payable |
7.5 |
5.1 |
631.7 |
674.9 |
|
Less: deferred issue costs |
(23.8) |
(12.7) |
607.9 |
662.2 |
Bonds, RCF, term loan, DDTL and the loan facility provided by Roger De Haan
On 30 January 2025, the Group announced that it had secured new credit facilities to refinance its corporate debt in full. The new facilities,
agreed by Saga Mid Co Limited, and provided by HPS Funds, comprised: a £335.0m term loan, a £100.0m DDTL and a £50.0m RCF.
Closing of the new credit facilities was subject to customary conditions and took place on 27 February 2025, together with the repurchase,
repayment and cancellation of the £250.0m senior unsecured notes, the £85.0m loan facility provided by Roger De Haan and the existing
£50.0m RCF.
On 15 May 2025, as a continuation of the refinancing, the Group syndicated the new £50.0m RCF, originally provided by HPS Funds, to NatWest
and Barclays. Under the revised structure, NatWest and Barclays committed a combined £33.4m to the RCF, while the remaining £16.6m was
reallocated to HPS Funds DDTL, increasing its total commitment from £100.0m to £116.6m.
At 31 January 2026, the Group’s financing facilities consisted of a £335.0m term loan, a £116.6m DDTL and a £33.4m RCF. The term loan and
DDTL both mature on 29 January 2031 and the RCF matures on 29 January 2029. The RCF and DDTL were undrawn at 31 January 2026.
i) Bonds
In May 2024, the Group repaid in full its £150.0m 2024 senior unsecured bond.
As a result of the Group securing new credit facilities on 30 January 2025 (see below), and drawing down on these on 27 February 2025,
the 2026 senior unsecured bond was repaid in full, cancelled and de-listed.
The 2026 and 2024 bonds were both listed on the Irish Stock Exchange (Euronext Dublin). The 2026 and 2024 bonds were both guaranteed
by Saga Services Limited and Saga Mid Co Limited.
Interest on the 2026 corporate bond was incurred at an annual interest rate of 5.5%. Interest on the 2024 corporate bond was incurred at an
annual interest rate of 3.375%.
Accrued interest payable on the Group’s bond at 31 January 2025 was £0.6m.
ii) Former RCF
Interest payable on the Group’s former RCF, if drawn down, was incurred at a variable rate of Sterling Overnight Index Average (
SONIA
) plus
a bank margin that was linked to the Group’s former leverage ratio calculation
13
.
In March 2024, the Group concluded discussions with the lenders associated with the former RCF to increase the Group’s financial flexibility.
As a result, the following amendments were agreed, in addition to smaller, immaterial changes:
•
Increase to the former leverage ratio calculation
13
for all remaining testing periods to 6.25x.
•
Quarterly covenant testing, irrespective of whether the loan is drawn.
•
The introduction of a restriction whereby, post repayment of the 2024 bond, no utilisation of the facility is permitted if free liquidity is
below £40.0m.
•
Consent requirement for any early repayment of corporate debt or payment of shareholder dividends.
In September 2024, the Group concluded further discussions with the lenders associated with the former RCF to further increase the Group’s
financial flexibility. As a result, the following amendments were agreed, in addition to other smaller changes:
•
Extension of the expiry date of the facility from 31 May 2025 to 31 March 2026.
•
Former leverage ratio calculation
13
test for all remaining testing periods reduced to 6.0x, based on a revised definition of the calculation,
which was to be performed on a Group basis inclusive of amounts relating to the Ocean Cruise business.
13
The Group’s former leverage ratio test was calculated as the ratio of the sum of the carrying values of the Group’s debt facilities less the amount of Available Cash it held, to an
adjusted Trading EBITDA that excluded the impact of IFRS 9 ‘Financial Instruments’, IFRS 15 ‘Revenue Recognition’, IFRS 16 ‘Leases’ and IFRS 17 ‘Insurance Contracts’ and acted
as the denominator in the leverage ratio covenant calculation applicable to the RCF that was in place at 31 January 2025. Refer to the Alternative Performance Measures Glossary
on pages 194-196 for the full definition and explanation of Available Cash and Trading EBITDA
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
175
In November 2024, certain amendments were agreed in order to permit, among other things, the guarantees to be granted in relation to the
disposal of the Group’s Insurance Underwriting business and the establishment of the Affinity Partnership with Ageas (Note 38a).
In December 2024, the Group drew down £20.0m of its RCF. This amount was repaid in January 2025.
At 31 January 2025, the Group’s £50.0m RCF was undrawn. Accrued fees payable on the Group’s RCF at 31 January 2025 were £0.3m.
At 31 January 2025, the RCF was subject to covenants that are measured quarterly in April, July, October and January, being Net Debt
14
to
Adjusted Trading EBITDA
14
of a maximum of 6.0x and interest cover of a minimum of 3.0x, based on measures as defined in the facility
agreement, which are adjusted from the equivalent IFRS amounts. The ratio of Net Debt
14
to Adjusted Trading EBITDA
14
at 31 January 2025 was
4.7x and interest cover was 4.3x. The Group complied with the financial covenants of its borrowing facilities during the prior year.
As a result of the Group securing new credit facilities on 30 January 2025 (see below), and drawing down on these on 27 February 2025,
the former RCF was cancelled at that date.
iii) Loan facility provided by Roger De Haan
In April 2023, the Group entered into a forward starting loan facility provided by Roger De Haan, commencing on 1 January 2024, under which
the Group could draw down up to £50.0m with 30 days’ notice to support liquidity needs and specifically the repayment of £150.0m bonds
maturing in May 2024. The facility was provided on an arm’s-length basis and was guaranteed by Saga plc, Saga Mid Co Limited and Saga
Services Limited. Per the original terms of agreement, interest accrued on the drawn total of the facility at a rate of 10% and was payable on the
last day of the period of the loan. The facility was originally due to mature on 30 June 2025, at which point any outstanding amounts, including
interest, were due to be repaid. The facility was subject to a 2% arrangement fee, payable on entering the arrangement. A drawdown fee of 2%
on any amount drawn down under the facility was payable on the drawing date; and milestone fees of 2% on any uncancelled amount of the facility
became payable on 31 March 2024 and 31 December 2024 respectively.
In September 2023, the Group agreed an increase and extension to the existing loan facility provided by Roger De Haan. The increase was for
the value of £35.0m, taking the total facility to £85.0m, and the facility was extended to expire on 31 December 2025, previously 30 June 2025.
The interest rate paid on funds on the drawn total under this facility to finance the repayment of notes issued by Saga, or to provide cash
collateral demanded by providers of bonding facilities to the Group, remained at 10%, but increased to 18% for any amounts drawn to support
general corporate purposes. In addition, the previous arrangement and milestone fees of 2% remained payable; however, the drawdown fee
of 2% increased to 5% for drawdowns for general corporate purposes. The amended facility was provided on the basis of certain conditions
being met, including that:
•
no professional advisers were to be appointed to or retained by Saga without prior approval of the Board; and
•
no incremental financial indebtedness, over and above the facilities already in place, was to be incurred by Group companies, including
contracts classed as finance lease arrangements under previous IFRS.
In April 2024, a reduction of the notice period required for drawdown of the loan, to 10 business days, was agreed, in addition to a further
extension to the termination date of the facility, from 31 December 2025 to 30 April 2026.
In May 2024, the Group drew down £75.0m of the loan facility provided by Roger De Haan.
In September 2024, an increase to the maximum number of permitted facility utilisation requests was also agreed, from three to 10.
In November 2024, certain amendments were agreed in order to permit, among other things, the guarantees to be granted in relation to the
disposal of the Group’s Insurance Underwriting business and the establishment of the Affinity Partnership with Ageas (Note 38a).
At 31 January 2025, the Group had drawn £75.0m of its £85.0m loan facility provided by Roger De Haan. Accrued interest payable on the loan
facility provided by Roger De Haan at 31 January 2025 was £1.8m.
As a result of the Group securing new credit facilities on 30 January 2025 (see below), and drawing down on these on 27 February 2025, the loan
facility provided by Roger De Haan was repaid and cancelled at that date.
iv) Refinancing of corporate debt
On 30 January 2025, the Group announced that it had secured new credit facilities to refinance its corporate debt in full. The new facilities,
agreed by Saga Mid Co Limited, with HPS Funds comprised:
•
a £335.0m term loan facility that was to be drawn to:
–
repay the £250.0m senior unsecured bond, maturing July 2026;
–
repay the £75.0m drawings under the £85.0m loan facility provided by Roger De Haan, maturing April 2026; and
–
partially fund transaction costs;
•
a £100.0m DDTL facility that is available for three years and may be drawn for certain purposes, including the repayment of amortisation
within the Ocean Cruise ship debt facilities, mergers and acquisitions, and capital investment; and
•
a £50.0m RCF.
On 15 May 2025, as a continuation of the refinancing, the Group syndicated the new £50.0m RCF, originally provided by HPS Funds, to NatWest
and Barclays. Under the revised structure, NatWest and Barclays committed a combined £33.4m to the RCF, while the remaining £16.6m was
reallocated to HPS Funds DDTL, increasing its total commitment from £100.0m to £116.6m.
14
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Consolidated financial statements
Notes to the consolidated financial statements
continued
30 Loans and borrowings continued
Bonds, RCF, term loan, DDTL and the loan facility provided by Roger De Haan continued
iv) Refinancing of corporate debt continued
Saga plc
Annual Report and Accounts 2026
176
The term loan and DDTL loan facilities mature in January 2031 and are subject to a margin ratchet based on the Group net Leverage Ratio
15
(ranging from 625bps to 700bps), priced with an initial margin of 675bps over SONIA, which will reduce as the Group de-levers. The initial
blended pro forma interest rate was around 7.6% in combination with the Ocean Cruise ship debt facilities, which were retained on existing
terms. Interest payable under the RCF is at SONIA plus an initial margin of 3.5%, with the margin reducing as the Group de-levers.
Under the new credit facilities:
•
the term loan and DDTL are subject to a covenant test that is measured quarterly in April, July, October and January, being Net Debt
15
to
Consolidated Pro Forma EBITDA
15
of a maximum of 8.0x, based on measures as defined in the facilities agreements, adjusted from the
equivalent IFRS amounts; and
•
the RCF is also subject to a covenant, tested quarterly in April, July, October and January, being Net Debt
15
to Consolidated Pro Forma
EBITDA
15
of a maximum of 8.8x, based on measures as defined in the facility agreement, adjusted from the equivalent IFRS amounts.
Closing of the new credit facilities was subject to customary conditions and took place on 27 February 2025, together with the repurchase,
repayment and cancellation of the £250.0m senior unsecured notes, the £85.0m loan facility provided by Roger De Haan and the existing
£50.0m RCF (see above).
The ratio of Net Debt
15
to Consolidated Pro Forma EBITDA
15
at 31 January 2026 was 3.7x, within the 8.0x covenant test. The Group complied with
the financial covenants of its borrowing facilities during the current and prior periods.
Accrued interest payable on the Group’s new credit facilities at 31 January 2026 was £5.5m.
Ocean Cruise ship loans
In June 2019, the Group drew down £245.0m of financing for its Ocean Cruise ship, Spirit of Discovery. The financing represents a 12-year
fixed-rate sterling loan, secured against the Spirit of Discovery cruise ship asset, and backed by an export credit guarantee. The initial loan was
repayable in 24 broadly equal instalments, with the first payment of £10.2m paid in December 2019.
The Board announced on 22 June 2020 that it had secured a debt holiday and covenant waiver for the Group’s Ocean Cruise ship facilities.
The Group’s lenders agreed to a deferral of £32.1m in principal payments under the ship facilities that were due up to 31 March 2021.
These deferred amounts were to be paid between June 2021 and December 2024 for Spirit of Discovery and between September 2021 and
March 2025 for Spirit of Adventure, and interest remained payable.
On 29 September 2020, the Group drew down £280.8m of financing for its Ocean Cruise ship, Spirit of Adventure. The financing, secured
against the Spirit of Adventure cruise ship asset, represents a 12-year fixed-rate sterling loan, backed by an export credit guarantee. The loan is
repayable in 24 broadly equal instalments, with the first payment originally due six months after delivery in March 2021, but initially deferred to
September 2021 as a result of the debt holiday described above.
In March 2021, the Group reached agreement for a one-year extension to the debt deferral on its Ocean Cruise ship facilities. As part of an
industry-wide package of measures to support the cruise industry, an extension of the existing debt deferral was agreed to 31 March 2022.
The key terms of this deferral were:
•
all principal payments to 31 March 2022 (£51.8m) deferred and repaid over five years;
•
all financial covenants until 31 March 2022 waived; and
•
dividends remain restricted while the deferred principal is outstanding.
During the year to 31 January 2024, the Group concluded discussions with its Cruise lenders in respect of the covenant restrictions attaching
to its two ship debt facilities. Lenders agreed to waive the EBITDA to debt repayment covenant ratio for the 31 July 2023 testing date. In addition,
lenders agreed to amend the covenants on the two ship debt facilities to reduce the EBITDA to debt repayment ratio from 1.2x to 1.0x for the
additional periods up to, and including, 31 January 2025.
Interest on the Spirit of Discovery ship loan is incurred at an effective annual interest rate of 4.31% (including arrangement and commitment
fees). Interest on the Spirit of Adventure ship loan is incurred at an effective annual interest rate of 3.30% (including arrangement and
commitment fees). Interest payable on the Group’s Ocean Cruise ship debt deferrals is incurred at a variable rate of SONIA plus a bank margin.
During the year to 31 January 2026, Ocean Cruise ship loan repayments of £55.6m (2025: £62.2m) were made by the Group. Accrued interest
payable on the Group’s Ocean Cruise ship loans at 31 January 2026 was £2.0m (2025: £2.4m).
At 31 January 2026, the Ocean Cruise ship debt facilities were subject to covenants that are measured six-monthly in July and January, being a
debt service cover ratio and an interest cover ratio, based on measures as defined in the debt facility agreements, which are adjusted from the
equivalent IFRS amounts. The debt service ratio, at 31 January 2026, was 1.9x (2025: 1.4x), in excess of the 1.2x covenant (2025: 1.0x) under the
Ocean Cruise ship debt facilities at the same date. The interest cover ratio, at 31 January 2026, was 12.2x (2025: 7.9x), in excess of the 2.0x
covenant under the Ocean Cruise the ship debt facilities at the same date.
Total debt and finance costs
At 31 January 2026, deferred debt issue costs were £23.8m (2025: £12.7m). The movement in the year of £11.1m represents an increase of
£17.6m following the drawdown of the new credit facilities, being offset by £6.5m amortisation expense for the year.
During the year, the Group charged £63.3m (2025: £45.8m) to the income statement in respect of interest, fees and charges associated with
the bonds, RCF, the loan facility provided by Roger De Haan, term loan, DDTL and Ocean Cruise ship loans. In addition, finance costs recognised
net finance expense on pension schemes, and net fair value losses on derivatives of £0.7m (2025: £0.3m). The Group complied with the financial
15
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
177
Onerous |
||||
Restructuring |
contract |
Other |
Total |
|
£m |
£m |
£m |
£m |
|
At 1 February 2024 |
– |
3.1 |
4.9 |
8.0 |
Charge for the year |
16.5 |
1.3 |
17.3 |
35.1 |
Utilised during the year |
– |
(3.1) |
(18.3) |
(21.4) |
At 31 January 2025 |
16.5 |
1.3 |
3.9 |
21.7 |
Charge for the year |
4.0 |
– |
9.1 |
13.1 |
Utilised during the year |
(8.7) |
(1.3) |
(1.2) |
(11.2) |
At 31 January 2026 |
11.8 |
– |
11.8 |
23.6 |
Onerous |
||||
Restructuring |
contract |
Other |
Total |
|
£m |
£m |
£m |
£m |
|
Current |
11.8 |
– |
8.7 |
20.5 |
Non-current |
– |
– |
3.1 |
3.1 |
At 31 January 2026 |
11.8 |
– |
11.8 |
23.6 |
Onerous |
||||
Restructuring |
contract |
Other |
Total |
|
£m |
£m |
£m |
£m |
|
Current |
10.9 |
1.3 |
3.6 |
15.8 |
Non-current |
5.6 |
– |
0.3 |
5.9 |
At 31 January 2025 |
16.5 |
1.3 |
3.9 |
21.7 |
As detailed in Note 38a, in December 2024 the Group announced it had entered into a binding agreement with Ageas to establish a 20-year
Affinity Partnership for motor and home insurance. As a result of this announcement, at 31 January 2025, a provision of £16.5m was made to
cover the expected direct costs associated with the restructuring programme of the Group’s Insurance Broking operations, in readiness for the
Affinity Partnership becoming operational. Estimated restructuring expenditure primarily included staff-related, legal, consultancy and other
change costs directly associated with the cessation of the existing operating model for Insurance Broking and was based on a detailed
restructuring plan developed by management. The restructuring is expected to be completed by January 2027.
The onerous contract provision related to the Group’s three-year fixed-price product guarantee in respect of motor insurance policies.
Other provisions primarily comprise:
•
provisions for the return of insurance commission in respect of policies cancelled mid-term after the reporting date or as a result of being
cancelled during the statutory cooling-off period after the reporting date;
•
potential payments to underwriters in relation to policies cancelled as a result of a fault claim;
•
customer remediation relating to areas, or incidents, where there is likely to be a requirement to remedy various errors that have had an
adverse impact on customer outcomes;
•
an employer liability provision relating to various Group-related, self-funded insurance arrangements; and
•
an Emissions Trading Scheme (
ETS
) provision as the Group participates in the scheme. Allowances granted by government are initially
recognised at nominal value (nil) and allowances purchased are recognised at cost. A provision is recognised for the obligation to deliver
allowances equivalent to emissions produced. The provision is measured at the carrying amount of allowances held, plus the fair value of
any additional allowances needed at the reporting date.
Other provisions are expected to be fully utilised within the next 12 months, with the exception of the employer liability and ETS provisions.
The settlement cash outflows from the employer liability provision depend on the timing of the settlement of claims.
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
178
The following tables analyse the cash and non-cash movements for liabilities arising from financing activities:
Non-cash changes |
|||||
Financing |
New leases |
||||
2025 |
cash flows |
(Note 18) |
Other |
2026 |
|
£m |
£m |
£m |
£m |
£m |
|
Lease liabilities (Note 37) |
26.1 |
(6.3) |
17.9 |
0.7 |
38.4 |
Term loan (Note 30) |
– |
335.0 |
– |
– |
335.0 |
DDTL (Note 30) |
– |
– |
– |
– |
– |
Ocean Cruise ship loans (Note 30) |
344.8 |
(55.6) |
– |
– |
289.2 |
Loan facility provided by Roger De Haan (Note 30) |
75.0 |
(75.0) |
– |
– |
– |
Bonds (Note 30) |
250.0 |
(250.0) |
– |
– |
– |
RCF (Note 30) |
– |
– |
– |
– |
– |
Deferred issue costs (Note 30) |
(12.7) |
(17.6) |
– |
6.5 |
(23.8) |
Non-cash changes |
|||||
Financing |
New leases |
||||
2024 |
cash flows |
(Note 18) |
Other |
2025 |
|
£m |
£m |
£m |
£m |
£m |
|
Lease liabilities (Note 37) |
26.3 |
(7.3) |
8.0 |
(0.9) |
26.1 |
Ocean Cruise ship loans (Note 30) |
407.0 |
(62.2) |
– |
– |
344.8 |
Loan facility provided by Roger De Haan (Note 30) |
– |
75.0 |
– |
– |
75.0 |
Bonds (Note 30) |
400.0 |
(150.0) |
– |
– |
250.0 |
RCF (Note 30) |
– |
– |
– |
– |
– |
Deferred issue costs (Note 30) |
(15.6) |
– |
– |
2.9 |
(12.7) |
Included within ‘Other’ for lease liabilities are amounts relating to foreign exchange movements of £0.8m credit (2025: £0.6m debit) and lease
re-assessments of £0.1m debit (2025: £0.3m debit) (Note 18).
Included within ‘Other’ for deferred issue costs is the amortisation of costs of £6.5m (2025: £4.4m), offset by an increase of £nil (2025: £1.5m)
following the drawdown of the new credit facilities (2025: drawdown of the loan facility provided by Roger De Haan) (Note 30).
Accrued interest payable on the Ocean Cruise ship loans, the term loan, the loan facility provided by Roger De Haan and bonds listed above is
disclosed in Note 30. Interest and debt issue costs paid during the year are included within operating activities in the consolidated statement
| Ordinary shares |
|||
Nominal |
|||
value |
Value |
||
Number |
£ |
£m |
|
Allotted, called up and fully paid |
|||
At 1 February 2024 |
141,795,822 |
0.15 |
21.3 |
Issue of shares – 3 May 2024 |
1,565,919 |
0.15 |
0.2 |
At 31 January 2025 |
143,361,741 |
0.15 |
21.5 |
Issue of shares – 14 July 2025 |
1,493,744 |
0.15 |
0.2 |
At 31 January 2026 |
144,855,485 |
0.15 |
21.7 |
On 3 May 2024, Saga plc issued 1,565,919 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
incentive arrangements. The newly issued shares rank pari passu with existing Saga shares.
On 14 July 2025, Saga plc issued 1,493,744 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
Strategic Report
Governance
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
179
Share-based payment reserve
Prior to vesting, the share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration. More detail is provided in Note 36.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow
hedges pending subsequent recognition in profit or loss as the hedged cash flows or items affect profit or loss.
Cost of hedging reserve
The cost of hedging reserve reflects the gain or loss on the portion excluded from the designated hedging instrument that relates to the forward
element of forward contracts. It is initially recognised in the OCI and accounted for similarly to gains or losses in the hedging reserve.
Own shares held reserve
The own shares reserve represents the cost of shares in the Company held by the Group’s EBT to satisfy options under the Group’s share option
The Group’s objectives, when managing capital, are to safeguard the Group’s ability to continue as a going concern to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
For the purposes of the Group’s capital management, capital comprises total equity of £72.3m (2025: £57.7m) as shown on the consolidated
statement of financial position. The Group operates in a number of regulated markets and includes subsidiaries which are required to comply
with specific requirements in respect of capital or other resources.
The Group’s Insurance Broking business is regulated primarily by the FCA in the UK, and the cash requirements of its River Cruise and Holidays
businesses are regulated by the CAA in the UK. The Group’s Insurance Underwriting business was regulated primarily by the Financial Services
Commission (
FSC
) in Gibraltar. It is the Group’s policy to comply with the requirements of these regulators in respect of capital adequacy,
or other similar tests, at all times.
The Group’s regulated Insurance Underwriting business was based in Gibraltar, and regulated by the FSC, and was required to ensure that it had
a sufficient level of capitalisation in accordance with Solvency 2 Technical Standards (effective 31 December 2024). Prior to 31 December 2024,
the Group’s Insurance Underwriting business was required to have a sufficient level of capitalisation in accordance with Solvency II.
The Group, and its subsidiaries, have complied with externally imposed capital requirements during the year. The amounts set out in the following
three paragraphs are provisional and unaudited.
The Group monitored its ability to comply with the requirements of Solvency II and Solvency 2 throughout the year to 31 January 2025 and up to
the date of disposal of its underwriting business on 1 July 2025, having previously received approval from the FSC for the Undertaking of Specific
Parameters when applying the standard formula to measure capital requirements for this business under Solvency II and Solvency 2 rules.
Under Solvency 2, AICL remained well capitalised and, at 31 January 2025, available capital was £95.4m (unaudited) against a Solvency Capital
Requirement of £44.7m (unaudited), giving 213% (unaudited) coverage.
The Group’s regulated Insurance Broking business is based in the UK and regulated by the FCA. Due to the nature of the business, the capital
requirements are significantly less than for the Insurance Underwriting business, but the Group is required to comply with the Adequate
Resources requirements of Threshold Condition 2.4 of the FCA Handbook. The Group undertakes a rigorous assessment against the
requirements of this Condition on an annual basis and, as a consequence, calculates and holds an appropriate amount of capital in respect of the
Insurance Broking business. The Minimum Regulatory Capital requirement of this business at 31 January 2026 was £3.6m (2025: £3.0m).
The regulated River Cruise and Holidays businesses are required to comply with a main test based on liquidity. The CAA liquidity test is a
requirement to hold at least 70% of advanced customer receipts in cash on the last day of each month. The Group monitors its compliance
with this test on a monthly basis, including forward-looking compliance using budgets and forecasts. At 31 January 2026 and 31 January 2025,
the businesses had sufficient coverage against this covenant.
From time to time, the Group purchases its own shares on the market; the timing of these purchases depends on market prices. The shares are
primarily intended to be used for issuing shares under the Group’s share option programmes. Buy and sell decisions are made on a specific
The Group has granted a number of different equity-based awards to employees and customers that it has determined to be share-based
payments:
a) Share options and Free Shares offer granted at the time of the Initial Public Offering (
IPO
)
•
On 29 May 2014, nil cost options over 13,132,410 shares were granted to certain Directors and employees with no exercise price and no
service or performance vesting conditions. There were no cash settlement alternatives.
•
Eligible customers and employees who acquired their shares under the Customer or Employee Offers in the Prospectus received one
bonus share for every 20 shares they acquired and held continuously for one year to 29 May 2015. As these were bonus shares, there was
no exercise price and no cash settlement alternative.
b) STP
•
In July 2022, the Board and shareholders approved the issue of an additional new award called the STP. The STP has a five-year vesting
period and participants receive a 12.5% share in shareholder value (share price plus dividends) created above a £6 per share hurdle over
a five-year performance period commencing from the grant date, subject to continuing employment. For Directors and senior leaders,
the STP will be equity-settled. For other employees, the STP will be settled in cash. There is a cap of £88.0m on the value of awards that
may vest, and the awards have a range of grant dates based on the tranche that each participant falls into.
•
On 5 July 2022, nil cost options were issued under the STP to certain Directors and other senior employees which vest and become
exercisable on the fifth anniversary of the grant date, subject to continuing employment.
Consolidated financial statements
Notes to the consolidated financial statements
continued
36 Share-based payments continued
b) STP continued
Saga plc
Annual Report and Accounts 2026
180
•
During the 2025 remuneration policy cycle, it was deemed that the STP award was no longer aligned to the current updated business
strategy. In June 2025, the decision was made to revert to the previous Executive reward programme that was in place prior to the STP,
removing the STP award and attached reduced RSP condition for Executives only. STP awards for senior leaders and colleagues remain
in place.
c) RSP
•
The RSP is a discretionary executive share plan under which the Board may grant options over shares in Saga plc.
•
On 25 June 2025, nil cost options over 1,533,377 shares were issued under the RSP to certain Directors and other senior employees
that vest and become exercisable on the third anniversary of the grant date, subject to continuing employment. There were no cash
settlement alternatives.
d) Long-term Incentive Plan (
LTIP
)
•
The LTIP is a legacy discretionary executive share plan, under which the Board may, within certain limits and subject to applicable
performance conditions, grant options over shares in Saga plc. There are no cash settlement alternatives.
•
Up to 31 January 2017, these options were 50% linked to a non-market vesting condition, earnings per share, and 50% linked to a market
vesting condition, total shareholder return (
TSR
).
•
From 1 February 2017 to 31 January 2018, these options were 60% linked to non-market vesting conditions (30% linked to basic earnings
per share and 30% linked to organic earnings per share) and 40% linked to a market vesting condition, TSR.
•
From 1 February 2018, these options were 60% linked to non-market vesting conditions (30% linked to organic earnings per share and
30% linked to return on capital employed (
ROCE
) and 40% linked to a market vesting condition, TSR.
•
From 1 February 2019, these options were 75% linked to non-market vesting conditions (50% linked to operational and strategic measures
and 25% linked to ROCE) and 25% linked to a market vesting condition, TSR.
e) DBP
•
On 28 May 2025, nil cost options over 655,094 shares were issued under the DBP to Executive Directors, reflecting their deferred bonus
in respect of 2024/25, which vest and become exercisable on the third anniversary of the grant date. Under the DBP, executives receive a
maximum of two-thirds of the bonus award in cash and a minimum of one-third in the form of rights to shares of the Company. There were
no cash settlement alternatives.
f) Employee Free Shares
•
Employee Free Shares is a discretionary share plan under which shares were awarded to eligible employees on the annual anniversary of the
IPO and allocated at nil cost; these shares become beneficially owned over a three-year period from allocation, subject to continuing service.
There were no cash settlement alternatives.
Each employee share option converts into one ordinary share of the Company on exercise. No amounts are paid, or payable, by the recipient
on receipt of the option. The options carry neither rights to dividends, nor voting rights. Options may be exercised at any time from the date of
vesting to the date of their expiry. With the exception of share options granted at the time of the IPO, if an employee ceases to be employed by
the Group, the option rights will be forfeited, except in limited circumstances that are approved by the Board on a case-by-case basis.
The table below summarises the movements in the number of share options outstanding for the Group and their weighted average exercise price:
Employee | |||||||
IPO options | RSP | LTIP | DBP | STP | Free Shares | Total | |
At 1 February 2025 | – | 5,643,017 | 9,503 | 1,344,966 | – | 1,231,790 | 8,229,276 |
Granted | – | 1,533,377 | – | 655,094 | – | – | 2,188,471 |
Forfeited | – | (1,123,430) | – | – | – | (49,121) | (1,172,551) |
Exercised | – | (1,210,693) | (5,118) | (304,983) | – | (379,647) | (1,900,441) |
At 31 January 2026 | – | 4,842,271 | 4,385 | 1,695,077 | – | 803,022 | 7,344,755 |
Exercise price | £nil | £nil | £nil | £nil | £nil | £nil | £nil |
Exercisable at 31 January 2026 | – | 357,958 | 4,385 | – | – | 175,600 | 537,943 |
Average remaining contractual life | – | 1.4 years | – | 1.5 years | 1.4 years | 0.8 years | 1.3 years |
Average fair value at grant | n/a | £1.56 | £6.60 | £1.31 | n/a | £2.31 | £1.59 |
The average fair values at grant date were restated to reflect the impact of the share consolidation on 13 October 2020.
The weighted average share price at the date of exercise for share options exercised during the year ended 31 January 2026 was £2.42
(2025: £1.11).
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Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
181
The following information is relevant in the determination of the fair value of options granted during the year under the equity-settled
share-based remuneration schemes operated by the Group.
RSP |
DBP |
|
Expected life of share option |
3 years |
3 years |
Weighted average share price |
£1.76 |
£1.44 |
As only limited historical data for the Group’s share price is available, the Group estimated the Company’s share price volatility as an average
of the volatilities of its TSR comparator group over a historical period commensurate with the expected life of the award immediately prior
to the date of the grant for awards under the RSP, DBP and Employee Free Share scheme.
For awards under the STP scheme, approved in July 2022, a volatility assumption of 31% was employed, calculated based on volatility in
Saga plc’s historical share price in the five years to 31 December 2019. This time period was selected to exclude the impact of the COVID-19
pandemic, which had a significant impact on Saga since the beginning of 2020. The impacts on the share price of profit warnings in
December 2019 and April 2019 were also excluded from the calculation. The Group charged £3.9m (2025: £4.2m) during the year to the income
statement in respect of equity-settled share-based payment transactions, including £0.2m relating to the acceleration of remaining STP vesting
charges following the cancellation of the award for Executives. This was charged to administrative and selling expenses.
The Group leases various River Cruise ships, offices, warehouses, equipment and vehicles. The contract lengths of the leases vary considerably
and may include extension or termination options. Where it is reasonably certain that an extension option will be triggered in a contract, lease
payments to be made in respect of the option are included in the measurement of the lease liability. Future minimum lease payments under lease
contracts, together with the present values of the net minimum lease payments, are as follows:
2026 |
2025 |
|
£m |
£m |
|
Within one year |
9.9 |
6.7 |
Between one and five years |
27.8 |
19.9 |
After five years |
12.0 |
4.2 |
Total minimum lease payments |
49.7 |
30.8 |
Less amounts representing finance charges |
(11.3) |
(4.7) |
Present value of minimum lease payments |
38.4 |
26.1 |
At 31 January 2026, the value of lease liabilities contracted for, but not provided for, in the financial statements in respect of right-of-use assets
amounted to £13.5m (2025: £22.5m). For the current year, these commitments relate to Spirit of the Lorelei. The lease commitments in the
b) Commitments
At 31 January 2026, the capital amount contracted for, but not provided for, in the financial statements in respect of property, plant and
The Travel businesses are each members of ABTA, a trade body which provides customers with financial protection when booking their holiday,
if there is no flight component. Under this membership, the Group is required to provide bonds for this purpose, and at 31 January 2026,
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
182
a) Discontinued operations
Further to the announcement made on 16 December 2024, the Group completed the disposal of its Insurance Underwriting business, AICL,
to Ageas on 1 July 2025. This followed receipt of regulatory approval and all other conditions associated with the sale being satisfied.
In addition, on 16 December 2024, the Group announced it had entered into a binding agreement with Ageas to establish a 20-year Affinity
Partnership for motor and home insurance.
Pursuant to a share purchase agreement (
SPA
), Ageas UK acquired AICL for a base consideration of £65.0m (subject to adjustments) and an
additional consideration of £2.5m which was paid following the commencement of the Affinity Partnership and, therefore, the sale of new policies
and the renewal of existing ones, in December 2025.
The profit before tax in the income statement in respect of discontinued operations comprises:
2026 |
2025 |
|
£m |
£m |
|
Profit before tax |
12.6 |
22.7 |
Costs of disposal incurred to date |
– |
(3.6) |
Loss on disposal of discontinued operations |
(10.2) |
– |
2.4 |
19.1 |
The (loss)/profit after tax in the income statement in respect of discontinued operations comprises:
2026 |
2025 |
|
£m |
£m |
|
Profit after tax |
9.7 |
16.5 |
Costs of disposal incurred to date, net of tax |
– |
(2.7) |
Loss on disposal of discontinued operations, net of tax |
(10.2) |
– |
(0.5) |
13.8 |
The impact of the discontinued operations on the reported earnings/(loss) per share is as follows:
2026 |
2025 |
|
£m |
£m |
|
Basic (loss)/earnings per share from discontinued operations |
(0.4p) |
9.8p |
Diluted (loss)/earnings per share from discontinued operations |
(0.4p) |
9.8p |
The loss on disposal of AICL is as follows:
2026 |
|
£m |
|
Initial cash consideration received at completion (after adjustments to base consideration) |
57.9 |
Additional cash consideration received (after adjustments to base consideration) |
10.9 |
Additional consideration received following the commencement of the Affinity Partnership |
2.5 |
Costs of disposal not previously provided for |
(2.5) |
Amounts recognised as a liability of the Group in respect of properties |
(15.7) |
Receipt of a Section 75 contribution in relation to AICL’s share of pension scheme liabilities |
3.2 |
Cash and cash equivalents deposits disposed of as part of the transaction |
(84.4) |
Carrying value of net liabilities disposed |
17.9 |
(10.2) |
The adjustments made to the base consideration included receipt of a Section 75 contribution of £3.2m in relation to AICL’s share of the pension
scheme’s liabilities, a property asset value adjustment in respect of its Solvency II value, and a net asset value adjustment reflecting the excess
of AICL’s Solvency II net asset valuation at completion.
Control over property assets, previously owned by AICL, transferred to a subsidiary of Saga plc at the point of sale, through the contractual
arrangements contained within the SPA. These property assets are not, therefore, reflected in the carrying value of the net assets disposed
reported above. A liability in respect of these property assets of £15.7m is recorded within the trade and other payables balance on the Group’s
consolidated statement of financial position, representing amounts payable to Ageas UK upon the earlier of a future sale of these properties to
a third-party purchaser and the repurchase of the freehold by a subsidiary of Saga plc. All amounts payable are expected to be settled within
two years of the end of the year.
For the year ended 31 January 2026, all cash flows relating to the disposal of AICL have been included under investing activities within the
consolidated statement of cash flow.
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Additional information
Saga plc
Annual Report and Accounts 2026
183
‘Disposal group eliminations and adjustments’ referred to in the tables below comprise the following:
•
The Group adopted IFRS 17 for the first time in the year ended 31 January 2024. IFRS 17 applies to all insurance and reinsurance contracts,
covering the principles of recognition, measurement, presentation and disclosure. IFRS 17 only applies to insurance contracts that are
underwritten by the Group and related reinsurance contracts held. It does not affect the accounting for the Group’s Insurance Broking
activities. As AICL, the Group’s Insurance Underwriting business, has been classified as part of the disposal group held for sale in the
statement of financial position and as discontinued operations in the income statement, all IFRS 17 related consolidation entries have also
been classified as such accordingly.
•
Intra-disposal group revenue and cost of sales were eliminated on consolidation.
•
Inter-group transactions with the disposal group were eliminated on consolidation.
i) Results of the disposal group for the year
Disposal | ||||
group | ||||
eliminations | ||||
Disposal | and | |||
group | adjustments | 2026 | ||
Notes | £m | £m | £m | |
Revenue from Insurance Broking services | 8.5 | (11.7) | (3.2) | |
Other revenue (non-Insurance Underwriting) | 1.7 | – | 1.7 | |
Non-insurance revenue | 10.2 | (11.7) | (1.5) | |
Insurance revenue | 28 | 62.4 | 4.2 | 66.6 |
Total revenue | 72.6 | (7.5) | 65.1 | |
Cost of sales (non-Insurance Underwriting) | (7.4) | 8.9 | 1.5 | |
Gross profit/(loss) (non-Insurance Underwriting) | 2.8 | (2.8) | – | |
Insurance service expenses | 28 | (45.3) | (17.2) | (62.5) |
Net (expense)/income from reinsurance contracts | 28 | (6.3) | 0.7 | (5.6) |
Insurance service result | 10.8 | (12.3) | (1.5) | |
Administrative and selling expenses | (1.4) | 14.0 | 12.6 | |
Net finance expense from insurance contracts | 28 | (5.3) | – | (5.3) |
Net finance income from reinsurance contracts | 28 | 2.2 | – | 2.2 |
Investment income/(expense) | 6.0 | (1.4) | 4.6 | |
Profit/(loss) before tax | 15.1 | (2.5) | 12.6 | |
Income tax expense | (0.9) | (2.0) | (2.9) | |
Profit/(loss) from discontinued operations attributable to equity holders | ||||
of the parent | 14.2 | (4.5) | 9.7 |
Disposal | |||
group | |||
eliminations | |||
Disposal | and | ||
group | adjustments | 2026 | |
£m | £m | £m | |
Reconciliation to Underlying Profit/(Loss) Before Tax 16 | |||
Profit/(loss) before tax | 15.1 | (2.5) | 12.6 |
Fair value gains on debt securities | (2.2) | – | (2.2) |
Changes in underwriting discount rates on non-PPO liabilities | 0.1 | – | 0.1 |
Onerous contract provision | 2.2 | 2.1 | 4.3 |
Restructuring costs | 0.4 | – | 0.4 |
Underlying Profit/(Loss) Before Tax 16 | 15.6 | (0.4) | 15.2 |
16
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
Consolidated financial statements
Notes to the consolidated financial statements
continued
38 Discontinued operations and assets held for sale continued
Saga plc
Annual Report and Accounts 2026
184
Disposal | ||||
group | ||||
eliminations | ||||
Disposal | and | |||
group | adjustments | 2025 | ||
Notes | £m | £m | £m | |
Revenue from Insurance Broking services | 21.1 | (29.5) | (8.4) | |
Other revenue (non-Insurance Underwriting) | 8.1 | (0.1) | 8.0 | |
Non-insurance revenue | 29.2 | (29.6) | (0.4) | |
Insurance revenue | 28 | 186.4 | 10.7 | 197.1 |
Total revenue | 215.6 | (18.9) | 196.7 | |
Cost of sales (non-Insurance Underwriting) | (19.5) | 17.1 | (2.4) | |
Gross profit/(loss) (non-Insurance Underwriting) | 9.7 | (12.5) | (2.8) | |
Insurance service expenses | 28 | (101.5) | (22.8) | (124.3) |
Net expense from reinsurance contracts | 28 | (66.5) | (0.7) | (67.2) |
Insurance service result | 18.4 | (12.8) | 5.6 | |
Administrative and selling expenses | (2.1) | 23.1 | 21.0 | |
Impairment of non-financial assets | (4.1) | – | (4.1) | |
Net finance expense from insurance contracts | 28 | (15.5) | – | (15.5) |
Net finance income from reinsurance contracts | 28 | 7.3 | – | 7.3 |
Investment income/(expense) | 14.5 | (3.3) | 11.2 | |
Profit/(loss) before tax | 28.2 | (5.5) | 22.7 | |
Income tax (expense)/credit | (7.1) | 0.9 | (6.2) | |
Profit/(loss) from discontinued operations attributable to equity holders | ||||
of the parent | 21.1 | (4.6) | 16.5 |
Disposal | |||
group | |||
eliminations | |||
Disposal | and | ||
group | adjustments | 2025 | |
£m | £m | £m | |
Reconciliation to Underlying Profit/(Loss) Before Tax 17 | |||
Profit/(loss) before tax | 28.2 | (5.5) | 22.7 |
Fair value gains on debt securities | (5.1) | – | (5.1) |
Changes in underwriting discount rates on non-PPO liabilities | (0.6) | – | (0.6) |
Onerous contract provision | (17.1) | 4.1 | (13.0) |
Impairment of non-financial assets | 6.3 | – | 6.3 |
Restructuring costs | 0.3 | – | 0.3 |
Underlying Profit/(Loss) Before Tax 17 | 12.0 | (1.4) | 10.6 |
ii) Net cash flows of the disposal group
The net cash flows of the disposal group during the year were as follows:
2026 | 2025 | |
£m | £m | |
Operating | (11.1) | 14.9 |
Investing | 31.3 | 45.0 |
Financing | (10.0) | (19.1) |
Net cash inflow | 10.2 | 40.8 |
17
Refer to the Alternative Performance Measures Glossary on pages 194-196 for definition and explanation
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Saga plc
Annual Report and Accounts 2026
185
b) Property assets held for sale
At the end of the year ended 31 January 2021, the Group made the decision to initiate an active programme to locate buyers for a number of its
freehold properties and one of its long leasehold properties. At the point of reclassification to held for sale, the carrying values were considered
to be equal to, or below, fair value less costs to sell, and hence no revaluation at the point of reclassification was required.
At the end of the year ended 31 January 2023, the Group made the decision to initiate an active programme to locate buyers for a further
two of its freehold properties. The Group also reclassified, to held for sale, the related fixtures and fittings associated with one of these
freehold properties.
At 31 January 2023, the carrying values of the properties classified as held for sale, totalling £31.2m, were representative of either each
property’s fair value or historic cost less accumulated depreciation and any impairment charges to date, whichever was lower.
During the year ended 31 January 2024, the Group declassified one of the properties held for sale at 31 January 2023, to property, plant and
equipment, since it was no longer being actively marketed for disposal. The carrying value of this property at 31 January 2023 was £3.4m.
Other than this one property, there were no changes in relation to the Group’s intention to sell any of the properties classified as held for sale
at 31 January 2023.
At 31 January 2024, the Group obtained updated market valuations of its freehold properties held for sale, to determine the fair value of
each building. As a consequence of the remeasurement of the properties to the lower of fair value less cost to sell and the carrying value,
management concluded that net impairment charges totalling £10.4m should be recognised against the Group’s property assets held for sale.
At 31 January 2024, the carrying values of the properties classified as held for sale, totalling £17.4m, were representative of either each
property’s fair value or historic cost less accumulated depreciation and any impairment charges to date, whichever was lower.
During the year ended 31 January 2025, the Group declassified one of the properties to property, plant and equipment, since it was no longer
being actively marketed for disposal. The carrying value of this property at 31 January 2025 was £6.0m.
At 31 January 2025, the Group obtained updated market valuations of its freehold properties held for sale, to determine the fair value of
each building. As a consequence of the remeasurement of the properties to the lower of fair value less cost to sell and the carrying value,
management concluded that net impairment charges totalling £0.4m should be recognised against the Group’s property assets held for sale.
At 31 January 2026, the Group again obtained updated market valuations of its freehold properties held for sale. The carrying values of the
properties, totalling £11.0m, were representative of either each property’s fair value, or historic cost less accumulated depreciation and any
impairment charges to date, whichever is lower. No gains or losses were recognised with respect to the properties during the year. The
properties continue to be actively marketed, with completion expected within 12 months of the end of the financial period, although the Directors
note that a successful completion within this timeframe cannot be assured. All properties classified as held for sale at 31 January 2026 are held
Consolidated financial statements
Notes to the consolidated financial statements
continued
Saga plc
Annual Report and Accounts 2026
186
The entities listed below are subsidiaries of the Company or Group at 31 January 2026. The ordinary equity shares of all subsidiary undertakings
are 100% owned. All subsidiary undertakings are included within the consolidated financial statements. The registered office address for all
entities registered in England is 3 Pancras Square, London N1C 4AG, United Kingdom.
Company name |
Country of registration |
Nature of business |
Saga Personal Finance Limited |
England |
Delivery of regulated investment products |
Saga Services Limited |
England |
Regulated insurance broking |
CHMC Limited 18 |
England |
Motor accident management |
PEC Services Limited 18 |
England |
Repairer of automotive vehicles |
ST&H Limited |
England |
Tour operating |
Saga Travel Group (UK) Limited |
England |
Tour operating |
Titan Transport Limited 18 |
England |
Tour operating |
Saga Cruises Limited |
England |
Cruising |
Saga Cruises V Limited |
England |
Cruising |
Saga Cruises VI Limited |
England |
Cruising |
Saga Crewing Services Limited 18 |
England |
Cruising |
CustomerKNECT Limited 18 |
England |
Mailing house |
Saga Mid Co Limited |
England |
Debt service provider |
Saga Publishing Limited 18 |
England |
Publishing |
CHMC Holdings Limited |
England |
Dormant holding company |
ST&H Group Limited |
England |
Holding company |
Saga Leisure Limited 18 |
England |
Holding company |
Saga Group Limited |
England |
Provision of administrative function for central costs |
Confident Services Limited |
England |
Dormant company |
Saga Membership Limited |
England |
Dormant company |
Saga Travel Group Limited |
England |
Dormant company |
Saga Radio (North West) Limited |
England |
Dormant company |
In addition to the above, the Directors consider that, under the terms of the contractual arrangements in place, Saga plc has control over the
Saga EBT. The results and net assets of the EBT have, therefore, been included in the Group consolidation. The registered office of the EBT is
26 New Street, St Helier, Jersey JE2 3RA.
18
These subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies Act 2006 for the year ended 31 January 2026. As required, Saga plc,
the ultimate parent undertaking and controlling party of the Group, guarantees all outstanding liabilities to which these subsidiary companies are subject at the end of the financial
year, until they are satisfied in full. This is in accordance with Section 479C of the Companies Act 2006. The guarantee is enforceable against Saga plc as the ultimate parent
Strategic Report
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Financial statements
Additional information
Saga plc
Annual Report and Accounts 2026
187
As set out in Note 30, in April 2023, the Group entered into a forward starting loan facility provided by Roger De Haan, commencing on
1 January 2024, under which the Group could draw down up to £50.0m with 30 days’ notice to support liquidity needs and specifically the
repayment of £150.0m bonds maturing in May 2024. The facility was provided on an arm’s-length basis and was guaranteed by Saga plc,
Saga Mid Co Limited and Saga Services Limited. Per the original terms of agreement, interest accrued on the drawn total of the facility at a
rate of 10% and was payable on the last day of the period of the loan. The facility was originally due to mature on 30 June 2025, at which point
any outstanding amounts, including interest, were due to be repaid. The facility was subject to a 2% arrangement fee, payable on entering
the arrangement.
A drawdown fee of 2% on any amount drawn down under the facility was payable on the drawing date; and milestone fees of 2% on any
uncancelled amount of the facility became payable on 31 March 2024 and 31 December 2024 respectively.
In September 2023, the Group agreed an increase and extension to the existing loan facility provided by Roger De Haan. The increase was for
the value of £35.0m, taking the total facility to £85.0m, and the facility was extended to expire on 31 December 2025, previously 30 June 2025.
The interest rate paid on funds on the drawn total under this facility to finance the repayment of notes issued by Saga, or to provide cash
collateral demanded by providers of bonding facilities to the Group, remained at 10%, but increased to 18% for any amounts drawn to support
general corporate purposes. In addition, the previous arrangement and milestone fees of 2% remained payable; however, the drawdown fee
of 2% increased to 5% for drawdowns for general corporate purposes. The amended facility was provided on the basis of certain conditions
being met, including:
•
no professional advisers were to be appointed to or retained by Saga without prior approval of the Board; and
•
no incremental financial indebtedness, over and above the facilities already in place, was to be incurred by Group companies, including
contracts classed as finance lease arrangements under previous IFRS.
In April 2024, a reduction of the notice period required for drawdown of the loan to 10 business days was agreed, in addition to a further extension
to the termination date of the facility, from 31 December 2025 to 30 April 2026.
In May 2024, the Group drew down £75.0m of the loan facility provided by Roger De Haan.
In September 2024, an increase to the maximum number of permitted facility utilisation requests was also agreed, from three to 10.
In November 2024, certain amendments were agreed in order to permit, among other things, the guarantees to be granted in relation to the
disposal of the Group’s Insurance Underwriting business and the establishment of the Affinity Partnership with Ageas (Note 38a).
At 31 January 2025, the Group had drawn £75.0m of its £85.0m loan facility provided by Roger De Haan. Accrued interest payable on the loan
facility provided by Roger De Haan at 31 January 2025 was £1.8m.
As a result of the Group securing new credit facilities on 30 January 2025 (please refer to Note 30), and drawing down on these on
Saga plc
Annual Report and Accounts 2026
188
Company financial statements of Saga plc
Balance sheet
2026 | 2025 | ||
Notes | £m | £m | |
Fixed assets | |||
Investment in subsidiaries | 2 | 840.4 | 659.3 |
Current assets | |||
Debtors – amounts falling due after more than one year | 3 | 80.0 | 337.2 |
Debtors – amounts falling due within one year | 3 | – | 0.1 |
80.0 | 337.3 | ||
Creditors – amounts falling due within one year | 4 | (3.0) | (2.1) |
Net current assets | 77.0 | 335.2 | |
Creditors – amounts falling due after more than one year | 5 | – | (249.0) |
Net assets | 917.4 | 745.5 | |
Capital and reserves | |||
Called up share capital | 6 | 21.7 | 21.5 |
Share premium account | 648.3 | 648.3 | |
Own shares held reserve | (1.6) | (1.4) | |
Retained earnings | 239.9 | 67.5 | |
Share-based payment reserve | 9.1 | 9.6 | |
Total shareholders’ funds | 917.4 | 745.5 |
The Company has not presented its own profit and loss account as permitted by Section 408(3) of the Companies Act 2006 (the
Act
). The profit
included in the financial statements of the Company, determined in accordance with the Act, was £168.0m (2025: £470.5m profit).
Company number: 08804263
The Notes on pages 190-193 form an integral part of these financial statements.
Signed for and on behalf of the Board on 20 April 2026 by
Mike Hazell
Mark Watkins
Group Chief Executive Officer
Group Chief Financial Officer
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Saga plc
Annual Report and Accounts 2026
189
Company financial statements of Saga plc
Statement of changes in equity
Share | Share-based | |||||
Called up | premium | Own shares | Retained | payment | Total | |
share capital | account | held reserve | earnings | reserve | equity | |
£m | £m | £m | £m | £m | £m | |
At 1 February 2024 | 21.3 | 648.3 | (1.2) | (407.6) | 10.1 | 270.9 |
Profit for the financial year | – | – | – | 470.5 | – | 470.5 |
Issue of share capital (Note 6) | 0.2 | – | (0.2) | – | – | – |
Share-based payment charge | – | – | – | – | 4.2 | 4.2 |
Transfer upon vesting of share options | – | – | – | 4.6 | (4.7) | (0.1) |
At 31 January 2025 | 21.5 | 648.3 | (1.4) | 67.5 | 9.6 | 745.5 |
Profit for the financial year | – | – | – | 168.0 | – | 168.0 |
Issue of share capital (Note 6) | 0.2 | – | (0.2) | – | – | – |
Share-based payment charge | – | – | – | – | 3.9 | 3.9 |
Transfer upon vesting of share options | – | – | – | 4.4 | (4.4) | – |
At 31 January 2026 | 21.7 | 648.3 | (1.6) | 239.9 | 9.1 | 917.4 |
The Notes on pages 190-193 form an integral part of these financial statements.
Saga plc
Annual Report and Accounts 2026
190
Company financial statements of Saga plc
1.1 Accounting policies
a) Accounting convention
These financial statements were prepared in accordance
with Financial Reporting Standard (
FRS
) 101 ‘Reduced
Disclosure Framework’.
In preparing these financial statements, the Company applies
the recognition, measurement and disclosure requirements
of UK-adopted international accounting standards, but makes
amendments, where necessary, in order to comply with the
Companies Act 2006 (the
Act
) and has set out below where
advantage of the FRS 101 disclosure exemptions has been taken.
The financial statements are prepared under the historical cost
convention, as modified by derivative financial assets and financial
liabilities measured at fair value through profit or loss and, in
accordance with the Act, are prepared on a going concern basis
(please refer to Note 2.1 of the Saga plc consolidated accounts on
page 111 for an assessment of the going concern basis for the Group
and the Company).
The Company’s financial statements are presented in sterling and
all values are rounded to the nearest hundred thousand (£m),
except when otherwise indicated.
The accounting policies which follow set out those policies which
apply in preparing the financial statements for the year ended
31 January 2026.
The Company has taken advantage of the following disclosure
exemptions under FRS 101:
•
The requirements of International Financial Reporting Standard
(
IFRS
) 7 ‘Financial Instruments: Disclosures’.
•
The requirements of paragraphs 10(d), 10(f), 16, 38A, 38B-D,
40A-D, 111 and 134-136 of International Accounting Standard (
IAS
) 1
‘Presentation of Financial Statements’.
•
The requirements of IAS 7 ‘Statement of Cash Flows’.
•
The requirements of paragraphs 30 and 31 of IAS 8 ‘Accounting
Policies, Changes in Accounting Estimates and Errors’.
•
The requirements of paragraphs 17 and 18A of IAS 24 ‘Related
Party Disclosures’.
•
The requirements in IAS 24 to disclose related party transactions
entered into between two or more members of a group, provided
that any subsidiary which is a party to the transaction is wholly
owned by such a member.
•
The requirements of paragraphs 45(b) and 46-52 of IFRS 2
‘Share-based Payment’.
b) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost, less a provision
for impairment, and are reviewed for impairment when events or
changes in circumstances indicate the carrying value may not be
recoverable. If there is an indication that the recoverable value of
a previously impaired investment in a subsidiary has increased,
previously recognised impairments are reversed up to the lower
of historical cost and the recoverable value of the investment.
c) Debtors
Trade and other debtors are initially recognised at fair value and,
where the time value of money is material, subsequently measured
at amortised cost using the effective interest rate (
EIR
) method.
Provision for impairment is made using the simplified approach set out
in IFRS 9 ‘Financial Instruments’, whereby no credit loss allowance
is recognised on initial recognition and then, at each subsequent
reporting date, the loss allowance will be the present value of the
expected cash flow shortfalls over the remaining life of the debtors
(i.e. lifetime expected credit losses (
ECLs
)). Balances are written off
when the probability of recovery is assessed as being remote.
Amounts due from Group undertakings are classified as debtors.
They have no fixed date of payment and are payable on demand.
The amounts due from Group undertakings are disclosed at
amortised cost.
Notes to the Company financial statements
d) Deferred tax
Deferred tax is provided on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available, against which the
deductible temporary differences, and the carry forward of unused
tax credits and unused tax losses, can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting date and is 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. Unrecognised deferred
tax assets are reassessed at each reporting date and are recognised
to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply in 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 reporting date. Deferred
tax is charged, or credited, in the income statement, except when
it relates to items charged or credited in other comprehensive
income (
OCI
), in which case the deferred tax is dealt with in OCI.
Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.
e) Share-based payments
The Company provides benefits to employees (including Directors)
of Saga plc and its subsidiary undertakings, in the form of share-based
payment transactions, whereby employees render services as
consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is measured by reference to
the fair value on the grant date and is recognised as an expense over
the relevant vesting period, ending on the date on which the employee
becomes fully entitled to the award.
Fair values of share-based payment transactions are calculated using
market price valuation modelling techniques.
In valuing equity-settled transactions, assessment is made of any
vesting conditions to categorise these into market performance
conditions, non-market performance conditions and service conditions.
Where the equity-settled transactions have market performance
conditions (that is, performance that is directly or indirectly linked
to the share price), the fair value of the award is assessed at the time
of grant and is not changed, regardless of the actual level of vesting
achieved, except where the employee ceases to be employed prior
to the vesting date.
For service conditions and non-market performance conditions,
the fair value of the award is assessed at the time of grant and is
reassessed at each reporting date to reflect updated expectations
for the level of vesting. No expense is recognised for awards that
ultimately do not vest.
At each reporting date prior to vesting, the cumulative expense is
calculated, representing the extent to which the vesting period has
expired and, in the case of non-market conditions, the best estimate
of the number of equity instruments that will ultimately vest or, in the
case of instruments subject to market conditions, the fair value on
grant adjusted only for leavers. The movement in the cumulative
expense since the previous reporting date is recognised in the income
statement, with the corresponding increase in the share-based
payments reserve.
Upon vesting of an equity instrument, the cumulative cost in the
share-based payments reserve is reclassified to reserves.
Strategic Report
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Additional information
Saga plc
Annual Report and Accounts 2026
191
f) Equity
The Group has ordinary shares that are classified as equity.
Incremental external costs that are directly attributable to the issue
of these shares are recognised in equity, net of tax.
g) Own shares
Own shares represent the shares of the Company that are held by an
Employee Benefit Trust (
EBT
). Own shares are recorded at cost and
deducted from equity. The Directors consider that, under the terms
of the contractual arrangements in place, the Company has control
over the EBT. The results and net assets of the EBT have, therefore,
been included in the Group consolidation.
h) Financial instruments
i) Financial assets
On initial recognition, a financial asset is classified as either amortised
cost, fair value through other comprehensive income (
FVOCI
) or fair
value through profit and loss (
FVTPL
). The classification of financial
assets is based on the business model in which a financial asset is
managed, and its contractual cash flow characteristics.
The Company measures all financial assets at fair value at each
reporting date, other than those instruments measured at
amortised cost.
The Company’s financial assets at amortised cost include amounts
due from Group undertakings. The Company does not hold any
financial assets classified as FVOCI or FVTPL.
(a) Financial assets at amortised cost
Initial recognition and measurement
A financial asset is classified at amortised cost if it meets both of the
following conditions and is not elected to be designated as FVTPL:
•
It is held within a business model whose objective is to hold assets
to collect contractual cash flows.
•
Its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal
amount outstanding.
Subsequent measurement
These assets are subsequently measured at amortised cost using
the EIR method. The amortised cost is reduced by impairment losses
(see (b) to the right). Impairment losses are recognised in profit or loss
as they are incurred. Any gain or loss on derecognition is recognised
in profit or loss immediately.
Derecognition
A financial asset is derecognised when the rights to receive cash flows
from the asset have expired or when the Company has transferred
substantially all the risks and rewards relating to the asset to a
third party.
(b) Impairment of financial assets
The ECL impairment model applies to financial assets measured
at amortised cost and debt investments at FVOCI.
The Company measures loss allowances at an amount equal to
12-month ECLs, except for trade receivables and contract assets
that result from transactions within the scope of IFRS 15.
When determining whether the credit risk of a financial asset has
increased significantly since initial recognition and when estimating
ECLs, the Company considers reasonable and supportable
information that is relevant and available without undue cost or effort.
This includes both quantitative and qualitative information and
analysis, based on the Company’s historical experience and informed
credit assessment and including forward-looking information.
Measurement of ECLs
ECLs are measured as a probability-weighted estimate of credit
losses. Credit losses are measured as the probability of default in
conjunction with the present value of the Group’s exposure. Loss
allowances for ECLs on financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets, with a
corresponding charge to the income statement.
ii) Financial liabilities
Initial recognition and measurement
All financial liabilities are classified as financial liabilities at amortised
cost on initial recognition.
All financial liabilities are recognised initially at fair value and, in the case
of loans and borrowings, net of directly attributable transaction costs.
The Company’s financial liabilities comprise loans and borrowings.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings and
other payables are subsequently measured at amortised cost using
the EIR method. Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance
costs in the income statement.
Derecognition
A financial liability is derecognised when the obligation under the
liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and
the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the income statement.
i) Audit remuneration
Amounts receivable by the Company’s auditor and its associates
in respect of services to the Company and its associates, other
than the audit of the Company’s financial statements, have not been
disclosed as the information is required instead to be disclosed on
a consolidated basis in the consolidated financial statements.
Company financial statements of Saga plc
Notes to the Company financial statements
continued
Saga plc
Annual Report and Accounts 2026
192
1.2 Significant accounting judgements, estimates and assumptions
The preparation of financial statements requires the Company to select accounting policies and make estimates and assumptions that affect
items reported in the primary Company financial statements and Notes to the Company financial statements.
Significant estimates
All estimates are based on management’s knowledge of current facts and circumstances, assumptions based on that knowledge and predictions
of future events and actions. Actual results may, therefore, differ from those estimates.
The table below sets out those items the Company considers susceptible to changes in critical estimates and assumptions, together with the
relevant accounting policy.
Acc. policy | Items involving estimation | Sources of estimation uncertainty |
1.1b) | Investment in subsidiaries impairment testing | The Company determines whether the investment in subsidiaries needs |
to be impaired when indicators of impairment exist, or historic | ||
impairments reversed if there are indicators of improvement in the | ||
circumstances that triggered the original impairment. This requires an | ||
estimation of the value-in-use of the subsidiaries owned by the Company. | ||
The value-in-use calculation requires the Company to estimate the future | ||
cash flows expected to arise from the subsidiaries, discounted at a | ||
suitably risk-adjusted rate to calculate present value. | ||
Sensitivity analysis was undertaken to determine the effect of changing | ||
the discount rate, the terminal value and earnings before interest, tax, | ||
depreciation and amortisation ( EBITDA ) multiple on the present value | ||
calculation, which is shown in Note 2 below. |
2 Investment in subsidiaries
£m | |
Cost | |
At 1 February 2024 | 4,132.7 |
At 31 January 2025 and 31 January 2026 | 4,132.7 |
Impairment | |
At 1 February 2024 | 3,965.4 |
Amounts reversed in the year | (492.0) |
At 31 January 2025 | 3,473.4 |
Amounts reversed in the year | (181.1) |
At 31 January 2026 | 3,292.3 |
Net book value | |
At 31 January 2026 | 840.4 |
At 31 January 2025 | 659.3 |
See Note 39 to the consolidated financial statements for a list of the Company’s investments.
The market capitalisation of the Company increased from £177.5m at 31 January 2025 to £759.6m at 31 January 2026. The Directors considered
this an indicator that the recoverable value of the previously impaired investment in its subsidiaries could have increased. An assessment was,
therefore, performed in which the recoverable amount of the investment was compared with its carrying value.
A value-in-use of the Company’s subsidiaries was determined based on a sum-of-the-parts valuation for each of the Group’s businesses, using
discounted cash flow projections from the Group’s Board-approved five-year plan to 2030/31 for certain parts of the business, and EBITDA
multiples to estimate the present value of future dividend streams for other subsidiaries.
For the discounted cash flow projections, a terminal value was calculated using the Gordon Growth Model based on the fifth year of those
projections and an annual growth rate of 2.0% (2025: 2.0%) as the expected long-term average nominal growth rate of the UK economy.
Cash flows for a base case scenario and a stressed case scenario were then discounted to present value using a suitably risk-adjusted nominal
discount rate relevant to each of the segments.
At 31 January 2026, the range of pre-tax discount rates used was 12.2% to 14.8% (2025: 12.6% to 15.2%). EBITDA multiples of 6.4x to 11.1x
(2025: 6.6x to 12.0x) were used for the Travel businesses. As per IAS 36.44, incremental cash flows directly attributable to growth initiatives not
yet enacted at the balance sheet date were removed for the purpose of the value-in-use calculation. In the year ended 31 January 2026, the
recoverable amount calculated using this methodology when compared against the carrying value of the investment in subsidiaries resulted in
headroom of £181.1m in a probability weighted scenario of base case to stressed case cash flows. The headroom was identified as being reflective
of strong trading forecasts for the Travel businesses. No further impairment was, therefore, assessed as necessary and management have
reversed impairments recorded in previous years of £181.1m at 31 January 2026.
In the prior year, an impairment assessment was also performed in which the recoverable amount of the investment was compared with its
carrying value. The recoverable amount, when compared with the carrying value of the investment in subsidiaries, resulted in £492.0m
headroom in a probability weighted scenario of base case to stressed case cash flows. The headroom was identified as being reflective of strong
trading forecasts for the Travel businesses and reduced financing risk resulting from the successful refinancing of the Group’s corporate debt.
Management, therefore, concluded no further impairment was necessary and reversed impairments recorded in previous years of £492.0m
at 31 January 2025.
Strategic Report
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Saga plc
Annual Report and Accounts 2026
193
The carrying value calculated is most sensitive to the EBITDA multiple, the discount rate and the terminal growth rate assumed. A quantitative
sensitivity analysis for each of these at 31 January 2026, and its impact on the carrying value of investment in subsidiaries, is as follows:
EBITDA multiple | Pre-tax discount rate | Terminal growth rate | ||||
+1x | –1x | +1.0ppt | –1.0ppt | +1.0ppt | –1.0ppt | |
£m | £m | £m | £m | £m | £m | |
Impact | 137.4 | (137.4) | (16.4) | 13.5 | 15.1 | (11.5) |
The sensitivity movement for the market multiple equates to a 9.4% movement in the underlying EBITDA assumption.
3 Debtors
2026 | 2025 | |
£m | £m | |
Amounts falling due after more than one year | ||
Amounts due from Group undertakings | 80.0 | 337.2 |
80.0 | 337.2 |
2026 | 2025 | |
£m | £m | |
Amounts falling due within one year | ||
Other debtors | – | 0.1 |
– | 0.1 |
For amounts due from Group undertakings, the ECLs are considered to be immaterial.
4 Creditors – amounts falling due in less than one year
2026 | 2025 | |
£m | £m | |
Other creditors | 0.1 | 0.1 |
Accruals | 2.9 | 1.4 |
Accrued interest and fees payable | – | 0.6 |
3.0 | 2.1 |
5 Creditors – amounts falling due in more than one year
2026 | 2025 | |
£m | £m | |
Bonds | – | 250 |
Unamortised issue costs | – | (1.0) |
– | 249.0 |
Please refer to Note 30 of the Saga plc consolidated accounts on pages 174-176 for further details relating to the bonds.
6 Called up share capital
| Ordinary shares | |||
Nominal | |||
value | Value | ||
Number | £ | £m | |
Allotted, called up and fully paid | |||
At 1 February 2024 | 141,795,822 | 0.15 | 21.3 |
Issue of shares – 3 May 2024 | 1,565,919 | 0.15 | 0.2 |
At 31 January 2025 | 143,361,741 | 0.15 | 21.5 |
Issue of shares – 14 July 2025 | 1,493,744 | 0.15 | 0.2 |
At 31 January 2026 | 144,855,485 | 0.15 | 21.7 |
On 3 May 2024, Saga plc issued 1,565,919 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
incentive arrangements. The newly issued shares rank pari passu with existing Saga shares.
On 14 July 2025, Saga plc issued 1,493,744 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
incentive arrangements. The newly issued shares rank pari passu with existing Saga shares.
7 Commitments
During the year, the Company provided guarantees for the Group’s bond, Ocean Cruise ship debt, £50.0m former Revolving Credit Facility and
bank overdraft (please refer to Notes 25 and 30 of the Saga plc consolidated accounts on pages 166, and 174-176). At 31 January 2026, as a result
of the Group’s refinancing of its debt facilities, the Company provided guarantees for the Ocean Cruise ship debt only.
The Group uses a number of Alternative Performance Measures (
APMs
),
which are not required or commonly reported under International
Financial Reporting Standards (
IFRS
), the Generally Accepted
Accounting Principles (
GAAP
) under which the Group prepares its
financial statements, but which are used by the Group to help the user
of the accounts better understand the financial performance and
position of the business.
Definitions for the primary APMs used in this report are set out below.
APMs are usually derived from financial statement line items and are
calculated using consistent accounting policies to those applied in
the financial statements, unless otherwise stated. APMs may not
necessarily be defined in a consistent manner to similar APMs used by
the Group’s competitors. They should be considered as a supplement
to, rather than a substitute for, GAAP measures.
Underlying Revenue
Underlying Revenue represents revenue excluding ceded reinsurance
premiums earned on business underwritten by the Group, the
Insurance Broking onerous contract provision, the prior year AXA
profit share payable on cessation of the private medical insurance (
PMI
)
contract, the release of deferred revenue associated with motor and
home three-year fixed-price policies, modification of Travel breakage
policy and revenue associated with the exit from some of our smaller,
loss-making activities.
This measure is useful for presenting the Group’s underlying trading
performance as it excludes non-cash technical accounting
adjustments and one-off financial impacts that are not expected to
recur. In the case of the Insurance Broking onerous contract provision,
this is excluded due to it being a fair value type adjustment to revenue
that will reverse over time.
Underlying Revenue reconciles to the statutory measure of revenue
as follows:
£m
12m to Jan
2026
Change
12m to Jan
2025
Underlying Revenue
715.0
(6.9%)
768.2
Ceded reinsurance premiums
earned on business
underwritten by the Group
4.7
(72.5%)
17.1
Included within discontinued
operations
(65.1)
66.9%
(196.7)
Underlying Revenue from
continuing operations
654.6
11.2%
588.6
Insurance Broking onerous
contract provision
1.3
(27.8%)
1.8
AXA profit share payable on
cessation of PMI contract
–
100.0%
(2.6)
Release of deferred revenue on
three-year fixed-price policies
7.0
100.0%
–
Modification of Travel
breakage policy
(3.0)
(100.0%)
–
Exit from smaller, loss-making
activities
0.1
(80.0%)
0.5
Revenue per statutory
financial statements
660.0
12.2%
588.3
Underlying Profit Before Tax
Underlying Profit Before Tax represents the profit/(loss) before tax
excluding the impairment of Insurance Broking goodwill and the
following other exceptional items:
•
release of deferred revenue associated with motor and home
three-year fixed-price policies;
•
Affinity Partnership transition;
•
loss on disposal of subsidiaries, including the write-off of the
written to earned adjustment;
•
costs and fees associated with the Group’s previous corporate
debt, including accelerated amortisation of fees relating to the
loan facility provided by Roger De Haan;
•
net unrealised fair value losses on derivatives;
•
Ocean Cruise dry dock costs and customer compensation;
•
impairment of the carrying value of non-financial assets;
•
impact of change in the discount rate on non-periodical payment
order (
PPO
) liabilities
1
;
•
fair value gains on debt securities;
•
foreign exchange gains/(losses) on River Cruise ship leases;
•
movements in insurance onerous contract provisions (net of
reinsurance recoveries)
2
;
•
profit share payable to AXA on cessation of the PMI contract;
•
the IFRS 16 lease accounting adjustment on River Cruise vessels;
•
restructuring costs; and
•
modification of Travel breakage policy.
It is reconciled to statutory loss before tax within the Group Chief
Financial Officer’s Review on page 27.
This measure is the Group’s key performance indicator and is useful
for presenting the Group’s underlying trading performance, as it
excludes non-cash technical accounting adjustments due to their
volatility and one-off financial impacts that are not expected to recur.
As Underlying Profit Before Tax includes the benefits of restructuring
programmes, but excludes significant costs, such as the impairment
of non-financial assets and restructuring items, it should not be
regarded as a complete picture of the Group’s financial performance,
which is presented in its financial statements. The exclusion of other
underlying items may result in Underlying Profit Before Tax being
materially higher or lower than reported loss before tax. In particular,
when significant non-financial asset impairments and restructuring
charges are excluded, Underlying Profit Before Tax will be higher than
earnings reported in the financial statements.
Alternative Performance Measures Glossary
1
This adjustment reduces the risk of residual volatility from changes in market interest rates adversely affecting Underlying Profit Before Tax
2
The IFRS 17 onerous contract requirements create a timing mismatch between when claims are incurred and when they are recognised in profit before tax. Underlying Profit
Before Tax adjusts for this timing mismatch by reversing the impact of these requirements
Saga plc
Annual Report and Accounts 2026
194
Trading EBITDA
Trading EBITDA is defined as earnings before interest payable, tax,
depreciation and amortisation, and excludes exceptional items
and impairments.
Trading EBITDA, on a rolling 12-month basis, is a key component of
Consolidated Pro Forma EBITDA (see overleaf), which acts as the
denominator in the Group’s Leverage Ratio covenant calculations
applicable to the term loan, delayed-draw term loan (
DDTL
) and
Revolving Credit Facility (
RCF
) that were in place at 31 January 2026.
It reconciles to Total Underlying Profit Before Tax as follows:
£m
12m to Jan
2026
Change
12m to Jan
2025
Ocean Cruise Trading EBITDA
105.3
18.0%
89.2
River Cruise Trading EBITDA
5.9
47.5%
4.0
Holidays Trading EBITDA
15.2
40.7%
10.8
Insurance Broking Trading
EBITDA
20.2
(9.8%)
22.4
Insurance Underwriting
Trading EBITDA
18.6
(5.1%)
19.6
Other Businesses and Central
Costs Trading EBITDA
(12.1)
(36.0%)
(8.9)
Trading EBITDA
153.1
11.7%
137.1
Depreciation and amortisation
(32.5)
8.2%
(35.4)
Net finance costs (including
Cruise, Holidays and Insurance
Underwriting)
(61.2)
(13.5%)
(53.9)
Total Underlying Profit
Before Tax
59.4
24.3%
47.8
£m
12m to Jan
2026
Change
12m to Jan
2025
Trading EBITDA
153.1
11.7%
137.1
Insurance Broking Trading
EBITDA from discontinued
operations
0.4
126.7%
(1.5)
Insurance Underwriting
Trading EBITDA from
discontinued operations
(18.6)
5.1%
(19.6)
Trading EBITDA from
continuing operations
134.9
16.3%
116.0
£m
12m to Jan
2026
Change
12m to Jan
2025
Depreciation and
amortisation per above table
32.5
8.2%
35.4
Depreciation included within
other exceptional items
4.5
4.3%
4.7
Depreciation and
amortisation per statutory
financial statements
37.0
7.7%
40.1
£m
12m to Jan
2026
Change
12m to Jan
2025
Net finance costs
(including Ocean Cruise and
Insurance Underwriting)
per left table
61.2
(13.5%)
53.9
Included within other
exceptional items
10.4
(92.6%)
5.4
Included within discontinued
operations
(3.0)
(65.9%)
(8.8)
Net finance costs per
consolidated income
statement
68.6
(35.8%)
50.5
Consolidated Pro Forma EBITDA
Consolidated Pro Forma EBITDA represents Trading EBITDA,
excluding the impact of IFRS 16 ‘Leases’ and the Trading EBITDA
associated with the disposed Insurance Underwriting business and
acts as the denominator in the Group’s Leverage Ratio covenant
calculation applicable to the term loan, DDTL and RCF.
Consolidated Pro Forma EBITDA is calculated as follows:
£m
12m to Jan
2026
Change
12m to Jan
2025
Trading EBITDA
153.1
11.7%
137.1
Impact of IFRS 16
(1.6)
36.0%
(2.5)
Impact of disposal of
Insurance Underwriting
(18.2)
(100.0%)
–
Consolidated
Pro Forma EBITDA
133.3
(1.0%)
134.6
Gross Written Premiums
Gross Written Premiums represent the total premium that the
Group charges to customers for a core insurance product, excluding
insurance premium tax but before the deduction of any outward
reinsurance premiums, measured with reference to the cover start
date of the policy. This measure is widely used by insurers so provides a
meaningful comparison of performance with our peers. It is analysed
further within the Group Chief Financial Officer’s Review on page 31.
Written Gross Profit After Marketing Expenses
Written Gross Profit After Marketing Expenses is calculated
as written revenue, less cost of sales and marketing expenses.
This measure provides a meaningful view of the contribution of
each Insurance Broking product, before accounting for operating
expenses, and is analysed further within the Group Chief Financial
Officer’s Review on page 31.
Financial statements
Governance
Saga plc
Annual Report and Accounts 2026
195
Additional information
Strategic Report
Underlying Basic Earnings Per Share
Underlying Basic Earnings Per Share represents the basic
earnings/(loss) per share excluding the post-tax effect of:
•
release of deferred revenue associated with motor and home
three-year fixed-price policies;
•
Affinity Partnership transition;
•
loss on disposal of subsidiaries, including the write-off of the
written to earned adjustment;
•
costs and fees associated with the Group’s previous corporate
debt, including accelerated amortisation of fees relating to the
loan facility provided by Roger De Haan;
•
net unrealised fair value losses on derivatives;
•
Ocean Cruise dry dock costs and customer compensation;
•
impairment of the carrying value of non-financial assets;
•
impact of change in the discount rate on non-PPO liabilities
3
;
•
fair value gains on debt securities;
•
foreign exchange gains/(losses) on River Cruise ship leases;
•
movements in the insurance onerous contract provisions
(net of reinsurance recoveries)
4
;
•
profit share payable to AXA on cessation of PMI contract;
•
the IFRS 16 lease accounting adjustment on River Cruise vessels;
•
restructuring costs; and
•
modification of Travel breakage policy.
This measure is reconciled to the statutory basic earnings/(loss)
per share in Note 12 to the accounts on page 147.
This measure is linked to the Group’s key performance indicator,
Underlying Profit Before Tax, and represents what management
considers to be the underlying shareholder value generated in
the period.
Available Cash
Available Cash represents cash held by subsidiaries within the Group
that is not subject to regulatory restrictions, net of any overdrafts held
by those subsidiaries, and excludes additional amounts paid into an
escrow account relating to the Saga Pension Scheme. This measure
is reconciled to the statutory measure of cash in Note 25 to the
accounts on page 166.
Available Operating Cash Flow
Available Operating Cash Flow is net cash flow from operating
activities after capital expenditure but before income tax received,
interest paid, restructuring costs and other one-off payments, which
is available to be used by the Group as it chooses and is not subject to
regulatory restriction.
Available Operating Cash Flow reconciles to net cash flows from
operating activities as follows:
£m
12m to Jan
2026
Change
12m to Jan
2025
Net cash flows from operating
activities (reported)
117.0
3.4%
113.2
Exclude cash impact of:
Trading of restricted
divisions
(25.9)
58.2%
(61.9)
Restructuring costs and
other one-off payments
48.2
77.9%
27.1
Interest paid
49.9
19.7%
41.7
Income tax received
(0.4)
88.9%
(3.6)
71.8
>500%
3.3
Cash released from restricted
divisions
26.2
13.9%
23.0
Capital expenditure funded
from Available Cash
(20.6)
(12.0%)
(18.4)
Cash collateralised
Association of British Travel
Agents bonding
11.5
200.0%
(11.5)
Available Operating
Cash Flow
205.9
87.9%
109.6
Net Debt
Net Debt is the sum of the carrying values of the Group’s debt facilities
and pre-IFRS 16 lease liabilities less the amount of Available Cash it
holds and acts as the numerator in the Group’s Leverage Ratio
covenant calculation applicable to the term loan, DDTL and RCF. It is
analysed further within the Group Chief Financial Officer’s Review on
page 38.
Leverage Ratio
Leverage Ratio is the ratio of Net Debt to Consolidated Pro Forma
EBITDA as of the last day of a relevant period. It is a key metric used
to report the Group’s capacity to service its debt.
Alternative Performance Measures Glossary
continued
3
This adjustment reduces the risk of residual volatility from changes in market interest rates adversely affecting Underlying Profit Before Tax
4
The IFRS 17 onerous contract requirements create a timing mismatch between when claims are incurred and when they are recognised in profit before tax. Underlying Profit
Before Tax adjusts for this timing mismatch by reversing the impact of these requirements
Saga plc
Annual Report and Accounts 2026
196
ABTA (Association of British Travel Agents)
the trade association
for tour operators and travel agents in the UK, of which the Group’s
Cruise and Holidays businesses are members
Act
the UK Companies Act 2006, applicable to Saga, as amended
from time to time
Add-on
an ancillary insurance product that is actively marketed and
sold in addition to a core policy
Affinity Partnership
the binding agreement with wholly-owned
subsidiaries in the UK of Ageas SA/NV, under which a 20-year
partnership for motor and home insurance has been established
Ageas (wholly owned UK subsidiaries of Ageas SA/NV)
provider of
personal insurance in the UK with whom Saga have entered a 20-year
Affinity Partnership for motor and home insurance, alongside the sale
of the Insurance Underwriting business, Acromas Insurance Company
Limited
AGM (Annual General Meeting)
to be held at 11.00am on
30 June 2026 at Herbert Smith Freehills Kramer LLP, Exchange
House, Primrose Street, London, EC2A 2EG
AI (artificial intelligence)
a computer or a computer-controlled
system used to perform tasks that typically require human
intelligence
AICL (Acromas Insurance Company Limited)
the Group’s
discontinued Insurance Underwriting business
Annual Bonus Plan
an incentive provided to the Executive Directors,
linked to achievement in delivering goals that are closely aligned with
the Group’s strategy
Annual policies
12-month insurance policies, sold by the Group’s
Insurance Broking business, with no option for the customer to fix the
premium at renewal
APMs (Alternative Performance Measures)
a series of measures
which are not required, or commonly reported, under accounting
standards but are used by the Group to help users better understand
the financial performance and position of the business
ATOL (Air Travel Organisers’ Licensing)
government-run financial
protection scheme operated by the Civil Aviation Authority, the
regulators of the Group’s River Cruise and Holidays businesses
Board
Saga plc Board of Directors
BU (business unit)
term used to refer to an area of the business,
such as Insurance, Cruise, Holidays, Money or Publishing
CAA (Civil Aviation Authority)
one of the bodies that regulates
the Group’s River Cruise and Holidays businesses
CEO (Chief Executive Officer)
Mike Hazell for the 2025/26
financial year
CFO (Chief Financial Officer)
Mark Watkins for the 2025/26
financial year
CGR (Corporate Governance Reforms)
a range of legislative and
business-led measures, designed by the UK Government to improve
corporate governance
CGU (cash generating unit)
smallest identifiable group of assets
that generates cash inflows that are largely independent of the
cash inflows from other assets or groups of assets
CII (Carbon Intensity Indicator)
regulations, applicable to the
Group’s Ocean Cruise business, introduced during 2023/24,
enabling the cruise industry to meet its emission targets
Clawback
a requirement, within the Group’s Remuneration Policy,
for Executive Directors to return remuneration or benefits to a
company in special circumstances
Code
the UK Corporate Governance Code published by the
UK Financial Reporting Council, setting out guidance in the form
of principles and provisions to address the principal aspects of
corporate governance
Company
Saga plc
Competition and Markets Authority
regulator responsible for
promoting fair competition, preventing anti-competitive behaviour,
and protecting consumers
Contract boundary
the measurement of the Group’s insurance
contracts issued, and reinsurance contracts, which reflects all future
cash flows arising from insurance coverage within the boundary of
each contract
COR (combined operating ratio)
the ratio of the claims costs and
expenses incurred to underwrite insurance (numerator), to the
revenue earned by the Group’s discontinued Insurance Underwriting
business (denominator) in a given period. Can otherwise be calculated
as the sum of the loss ratio and expense ratio
CPI (Consumer Price Index)
a measure of inflation that tracks
changes over time in the prices of a representative basket of goods
and services purchased by households
CPO (Chief People Officer)
Roisin Mackenzie for the 2025/26
financial year
CustomerKNECT
the Group’s in-house mailing and printing business
DBP (Deferred Bonus Plan)
reward scheme, within the Group’s
Remuneration Policy, used to incentivise colleagues over the longer
term, ensuring alignment with Company goals
DDTL (delayed-draw term loan)
the facility that the Group has in
place with its lender, allowing draw-down of funds up to £116.6m
DEI&B (diversity, equity, inclusion and belonging)
the agenda under
which the Group is committed to creating an inclusive culture where
all colleagues can bring their full and authentic selves to work
DPA (Data Protection Act)
a UK law, applicable to the Group, that
regulates the use and protection of personal data
DTR (Disclosure and Transparency Rules)
rules published by the
UK Financial Conduct Authority relating to the disclosure of
information by a company, such as Saga plc, listed in the UK
Earnings per share
represents underlying shareholder value
generated in a given period
EBITDA (earnings before interest, tax, depreciation and
amortisation)
of acquired intangibles, non-trading costs and
impairments
EBT (earnings before tax)
profit or loss for the period before the
deduction of taxation
ECL (expected credit loss)
probability-weighted estimate of credit
losses over the life of a financial instrument
Economic Crime and Corporate Transparency Act
legislation
designed to improve transparency over UK companies and other legal
entities to strengthen the business environment, support national
security and disrupt economic crime
EEXI (Energy Efficiency Existing Ship Index)
benchmark used to
indicate a ship’s energy efficiency, in which the Group’s Ocean Cruise
ships achieve an ‘A’ rating
EIR (effective interest rate)
the rate that exactly discounts the
Group’s estimated future cash flows to the gross carrying amount
of a financial asset or amortised cost of a financial liability
EQ (Equiniti)
the Group’s share registrar and first point of contact
for shareholding enquiries
Equity-settled transactions
instances where services received
from colleagues are settled in the form of shares, or share options,
in the Group
Escrow Accounting
an arrangement with the Civil Aviation Authority
whereby the Group holds 70% of customer monies received in
advance, in relation to Air Travel Organisers’ Licensing bookings, until
they return from their holiday. From 1 October 2024, in respect of the
Holidays business, the Group moved from Escrow Accounting to
simply holding cash within the business
ESEF (European Single Electronic Format)
the electronic reporting
format that the Group must use to prepare annual financial reports
ESG (Environmental, Social and Governance)
central factors in
measuring the sustainability and societal impact of the Group
ESG Champion
Gemma Godfrey for the 2025/26 financial year
ETS (Emissions Trading Scheme)
a cap-and-trade scheme that limits
total greenhouse gas emissions across certain sectors and
establishes a market price for carbon allowances
Executive Director
of Saga plc (unless otherwise stated)
Expense ratio
the ratio of expenses incurred to underwrite insurance
(numerator) to the revenue earned by the Group’s discontinued
Insurance Underwriting business (denominator) in a given period
Experienced Voices
a panel of our customers who participate in
research for the Group
Glossary
Financial statements
Governance
Saga plc
Annual Report and Accounts 2026
197
Additional information
Strategic Report
FAME (fatty acid methyl ester)
a biofuel which has been trialled on
board our Ocean Cruise ships
FCA (Financial Conduct Authority)
the independent UK body that
regulates the financial services industry, including the Group’s
Insurance Broking and Money businesses
FRC (Finance Reporting Council)
independent regulator in the UK and
Ireland responsible for regulating auditors, accountants and actuaries
Free Shares
the gift of shares to colleagues to recognise their
contributions towards the Group’s performance
FRS (Financial Reporting Standard)
accounting standards issued
by the International Financial Reporting Standards Foundation
FSC (Financial Services Commission)
regulator for the non-bank
financial services sector and global business
FTSE 250
the Financial Times Stock Exchange 250 Index is a mid-cap
stock index that consists of the 101
st
to the 350
th
largest companies
listed on the London Stock Exchange
FTSE Women Leaders Review
an independent framework, which
the Group reports against, that sets recommendations to improve
the representation of women in leadership roles across the UK’s
largest companies
FuelEU Maritime
regulation that came into force in January 2025,
applying to our Cruise business, encouraging the adoption of low or
zero carbon fuels
Fulfilment cash flows
in relation to the measurement of liabilities for
incurred claims under International Financial Reporting Standard 17
‘Insurance Contracts’, the sum of the expected future discounted
cash flows; and a risk adjustment margin above the expected future
cash flows that represents the compensation required for bearing
non-financial uncertainty
FVOCI (fair value through other comprehensive income)
one of
three classification categories for the Group’s financial assets under
International Financial Reporting Standard 9 ‘Financial Instruments’
FVTPL (fair value through profit and loss)
one of three classification
categories for the Group’s financial assets under International
Financial Reporting Standard 9 ‘Financial Instruments’
GAAP (Generally Accepted Accounting Principles)
a common set
of accounting principles, standards and procedures issued by the
Financial Accounting Standards Board
GDPR (General Data Protection Regulation)
data protection
regulation introduced in 2018 that applies to most UK businesses,
including the Group
GHG (greenhouse gas)
a type of gas for which Saga provides annual
reporting on its emissions
GIPP (General Insurance Pricing Practices)
a review into pricing
practices within the UK insurance market conducted by the Financial
Conduct Authority
Going concern
an accounting term for a business that is assumed
to be able to meet its financial obligations when they fall due
Gross premium
the premium that the Group charges to a customer
in respect of insurance cover
Group
the Saga plc group
Host insurance contract
the total cash flows arising from all
insurance contracts of the Group, considered as a whole
HPS Funds
Certain funds, entities (or affiliates or subsidiaries of such
funds or entities) and/or accounts managed, advised or controlled by
HPS Investment Partners, LLC or its subsidiaries
IAA (Internal Audit and Assurance)
the Group’s Internal Audit and
Assurance function
IAS (International Accounting Standards)
accounting standards
issued by the International Accounting Standards Committee
IBNR (incurred but not reported)
a claims reserve provided to meet
the estimated cost of claims that have occurred, but have not yet been
reported to the insurer
IEA (International Energy Agency)
global organisation which provides
policy recommendations, analysis and data on the energy sector
IFRS (International Financial Reporting Standards)
accounting
standards issued by the International Accounting Standards Board
IMO (International Maritime Organization)
a specialised agency
of the United Nations responsible for regulating shipping
Insurance acquisition cash flows
acquisition costs arising from the
selling or renewing of insurance policies underwritten by the Group
Insurance service result
insurance revenue less insurance service
expenses
Interest cover
the ratio applicable to the Ocean Cruise ship debt
facilities in place at 31 January 2026, calculated by dividing Trading
EBITDA (numerator as described in the Alternative Performance
Measures Glossary) by net cash interest (denominator)
IPCC (Intergovernmental Panel on Climate Change)
the United
Nations body for assessing the science related to climate change
IPO (Initial Public Offering)
the first sale of shares by a previously
unlisted company to investors on a securities exchange
IPT (insurance premium tax)
tax payable on general insurance
premiums in the UK
IR (Investor Relations)
the team responsible for facilitating
communication between the Group and its investors
KPI (key performance indicator)
quantifiable measures that the
Group uses to evaluate performance
KPMG (KPMG LLP)
the Group’s external auditor
Load factor
the booked proportion of the total capacity across the
Group’s Cruise ships, calculated by dividing the number of berths
booked by the total berths available
Loss ratio
the ratio of the claims costs (numerator) to the net earned
premium (denominator) in a given period
LSE (London Stock Exchange)
the stock exchange upon which
Saga plc is listed
LTIP (Long-Term Incentive Plan)
legacy reward scheme used to
incentivise colleagues over the longer term, ensuring alignment with
Company goals
Malus
an arrangement that permits the forfeiture of unvested
remuneration awards in circumstances the Company considers
appropriate
Management Report
the Directors’ Report, together with the
Strategic Report, within this document
Master Trust
the Group’s defined contribution pension scheme,
operated by Aviva
MMQ (middle market quotation)
the average of the best buying and
selling prices quoted by market makers taken at the close of the
market each day
Net premium
the component of gross premium that is charged by the
Group’s discontinued Insurance Underwriter for each insurance claim
New business
new insurance policies, sold by the Group, to customers
that do not have an existing policy
Notice
formal communication sent to shareholders to inform them
about the upcoming Annual General Meeting
OCI (other comprehensive income)
revenues, expenses, gains and
losses under International Financial Reporting Standards that are
excluded from the income statement
Operating Board
the first layer of the Group’s management below
Board level
Other Businesses
CustomerKNECT Limited and Saga Publishing
Limited and Saga Personal Finance Limited
PAA (premium allocation approach)
a simplified method for
measuring the Group’s insurance revenue and expenses over time
Parker Review
an independent framework of business professionals
who each bring, on a voluntary basis, a wide range of gender and
ethnically diverse perspectives
PCSR (post-cessation shareholding requirements)
the obligation
for an Executive Director to continue holding shares in the Company
for a defined period after leaving employment
People Champion
Julie Hopes for the 2025/26 financial year and
Gemma Godfrey with effect from 23 March 2026 (following Julie’s
resignation on 27 February 2025)
People Committee
a monthly forum, chaired by the Chief People
Officer and attended by Lead Colleague Ambassadors from across
the Group, allowing colleagues to share their thoughts and views
Glossary
continued
Saga plc
Annual Report and Accounts 2026
198
Per diem
the total amount of Cruise revenue earned per passenger
per day
PMI (private medical insurance)
one of the products offered within
the Group’s Insurance Broking business
Policies in force
the number of core insurance policies in force at any
given time
PPO (periodic payment order)
a court order prescribing settlement
of an insurance claim through regular payments
PRUs (principal risks and uncertainties)
the most significant risks
threatening the Group
PwC
PricewaterhouseCoopers, the Group’s remuneration advisers
until 1 December 2025
RCF (Revolving Credit Facility)
the facility that the Group has in place
with its lenders, allowing the draw-down of funds up to £33.4m
Real living wage
a pay rate that is independently calculated, based on
the cost of living and is typically higher than the national minimum wage
Reinsurance
contractual arrangements where an insurer transfers
part, or all, of the insurance risk written to another insurer, in exchange
for a share of the customer premium
Relationship Agreement
the agreement that regulates the
relationship between the Group and Roger De Haan
Restricted Shares
shares granted to colleagues under specific plans
with vesting conditions, typically linked to continued employment and
performance
Risk adjustment
one of the components for measuring the liability for
incurred claims under International Financial Reporting Standard 17
‘Insurance Contracts’, being an explicit margin above the expected
future cash flows that represents the compensation required for
bearing non-financial uncertainty
ROCE (return on capital employed)
a financial ratio used as a
performance condition under the Group’s legacy long-term
incentive plan
RSP (Restricted Share Plan)
share scheme, and corresponding
share awards used to incentivise colleagues over the longer term,
ensuring alignment with company goals
Saga Cruise
ST&H Limited, Saga Cruises Limited, Saga Cruises V
Limited, Saga Cruises VI Limited and Saga Crewing Services Limited
Saga Holidays
Saga Travel Group (UK) Limited, Saga Travel Group
Limited and Titan Transport Limited
Saga Hub
the Group’s internal communications platform that keeps
colleagues informed and connected
Saga Insurance
Saga Services Limited, CHMC Holdings Limited,
CHMC Limited and PEC Services Limited
Saga Money
Saga Personal Finance Limited
Saga Publishing
Saga Publishing Limited
Saga Travel
the Group’s Cruise and Holidays businesses
Scope 3 emissions
greenhouse gas emissions present in the value
chain which are not directly controlled by the Group
SECR (Streamlined Energy and Carbon Reporting)
a sustainability
reporting framework, which is mandatory for large organisations in
the United Kingdom
Senior Managers and Certification Regime
a financial services
regulation in the UK, designed to impose personal accountability on
senior managers in Finance and Insurance
Shareholder information
annual reports, notices of shareholder
meetings and other documentation that Saga is required to send
to shareholders
Shareholder Reference
a unique reference number issued to
shareholders of Saga plc
Shareview Portfolio
an online portal, accessed via
www.sagashareholder.co.uk, that allows shareholders to manage
all aspects of their shareholding in Saga plc
SID (Senior Independent Director)
Peter Bazalgette until
9 April 2025, followed by Gareth Hoskin for the remainder of the
2025/26 financial year
SIP (Share Incentive Plan)
a plan available to all colleagues,
allowing them to purchase shares in Saga plc through a monthly
payroll deduction
SLT (Senior Leadership Team)
the second layer of the Group’s
management below Board level
SMC (Small and medium cap)
an index containing the Financial
Times Stock Exchange largest 250 companies and those of small
market capitalisation
Solvency capital/Solvency II
insurance regulations designed to
harmonise European Union insurance regulation, primarily concerning
the amount of capital that European insurance companies must hold
under a measure of capital and risk
SONIA (Sterling Overnight Index Average)
a replacement for the
London inter-bank offered rate, introduced in the UK in 2021
SPA (Share Purchase Agreement)
binding agreement for Ageas (UK)
Limited to purchase the shares of the Group’s discontinued Insurance
Underwriting business, Acromas Insurance Company Limited
Speak Up Champion
Gareth Hoskin for the 2025/26 financial year
SPF (Saga Personal Finance)
the Group’s personal finance business,
known as Saga Money
SSL (Saga Services Limited)
the Group’s Insurance Broking business
SSP (Shared Socioeconomic Pathway)
climate change scenarios of
projected socioeconomic global changes up to 2100 as defined in the
Intergovernmental Panel on Climate Change Sixth Assessment
Report on climate change in 2021
STP (Saga Transformation Plan)
a long-term incentive plan, as part of
the Group’s Remuneration Policy, for participants to receive a portion
of the value created above a stretching hurdle over a five-year period
Street pricing adjustment
any adjustment to the net premium of
an insurance policy that is applied during the broking service
Swaps
fixed price contracts used by the Group to manage its
exposure to fuel prices
TCFD (Task Force on Climate-related Financial Disclosures)
part of
the regulatory framework introduced by the Financial Stability Board
to improve, and increase, reporting on climate-related
financial information
tCO
2
e
tonnes of carbon dioxide equivalent
Three-year fixed-price policy
an insurance policy, provided by the
Group, with the option for the customer to fix the premium for
three years
tNPS (transactional net promoter score)
represents the willingness
of customers to recommend the Group’s products and services to
others following a recent transaction
Trust (Employee Benefit Trust)
a discretionary trust set up by the
Group to hold shares on behalf of its colleagues
Trust Fund
property held, including inter-alia money, and ordinary
shares in the Company, in trust in favour, or for the benefit, of
colleagues of the Group
TSR (total shareholder return)
the theoretical growth in value of a
shareholding over a period, by reference to the beginning and ending
share price, assuming that dividends, including special dividends,
are reinvested to purchase additional units of the equity
UMAS
a university-based commercial energy and environmental
advisory service to the shipping sector
UK
United Kingdom
UKLR (UK Listing Rules)
a set of mandatory regulations of the UK
Financial Conduct Authority applicable to a company listed on the
London Stock Exchange
VaR (Value at Risk)
a probability-based estimate of the risk of loss
in relation to the Group’s portfolio of insurance contracts
Written to earned adjustment
the Insurance Broking accounting
adjustment, required under International Financial Reporting
Standard 15 ‘Revenue from Contracts with Customers’, that spreads
revenue and, historically, associated costs, which are underwritten
by the Group over the life of the insurance policy
WTW (Willis Towers Watson)
the Group’s remuneration advisers
from 1 December 2025
Financial statements
Governance
Saga plc
Annual Report and Accounts 2026
199
Additional information
Strategic Report
Financial calendar
2026 Annual General Meeting – 30 June 2026
Shareholder information online
The Company will publish annual reports, notices of shareholder
meetings and other documents, which we are required to send to
shareholders (
shareholder information
), on our website. Consenting
shareholders will be notified either by post or email, if preferred, each
time the Company publishes shareholder information. This allows us
to increase the speed of communication, reduce our impact on the
environment and keep costs to a minimum.
You can change your communication preference via your
Shareview Portfolio which can be accessed on our website
(www.sagashareholder.co.uk) or by contacting Equiniti (
EQ
).
To register, you will require your Shareholder Reference which
can be found on most communications from EQ.
Shareview Portfolio is free, secure, easy to use and allows you to
elect to receive certain shareholder communications electronically,
update your UK bank account details, send your general meeting
voting instructions in advance of meetings, keep your contact details
up to date and buy and sell shares easily.
Shareholder fraud
Shareholders are advised to be wary of any unsolicited advice or
offers, whether over the telephone, through the post or by email.
If any such unsolicited communication is received, please check that
the company or person contacting you is properly authorised by the
Financial Conduct Authority (
FCA
) before engaging. Fraudsters use
persuasive and high-pressure tactics to lure investors into scams.
They may offer to sell shares that turn out to be worthless or
non-existent, or to buy shares at an inflated price in return for an
upfront payment. While high profits are promised, if you buy or sell
shares in this way, you may lose your money. For more information,
or if you are approached by fraudsters, please visit the FCA website
(www.fca.org.uk/consumers/scams), where you can report and find
out more about investment scams. You can also call the FCA
Consumer Helpline on 0800 111 6768. If you have already paid
money to share fraudsters, you should contact Action Fraud
on 0300 123 2040.
Advisers
Corporate brokers
Deutsche Numis
21 Moorfields
London EC2Y 9DB
Singer Capital Markets
1 Bartholomew Lane
London EC2N 2AX
Media relations advisers
Headland Consultancy
3
rd
Floor
One New Change
London EC4M 9AF
Independent auditors
KPMG LLP
15 Canada Square
Canary Wharf
London E14 5GL
Legal advisers
Herbert Smith Freehills Kramer LLP
Exchange House
Primrose Street
London EC2A 2EG
Registrars
Equiniti Group
For shareholder enquiries, please contact:
Equiniti Group
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder helpline: +44 (0) 371 384 2640
Calls to freephone numbers will vary by provider. Calls from outside
the UK will be charged at the applicable international rate. Lines are
open 8.30am to 5.30pm, Monday to Friday, excluding public holidays
in England and Wales.
customer@equiniti.com
Information for shareholders
Information for investors is provided online via the Group’s corporate
website (www.corporate.saga.co.uk/investors).
Registered office
Saga plc
3 Pancras Square
London N1C 4AG
Registered in England and Wales. Company Number: 08804263
Corporate websites
Information made available on the Group’s websites does not, and
is not intended to, form part of this Annual Report and Accounts.
Shareholder information
Saga plc
Annual Report and Accounts 2026
200
This publication is produced by a
CarbonNeutral® company and the paper
is Carbon Balanced with World Land Trust.
Balancing is delivered by World Land Trust,
an international conservation charity,
who offset carbon emissions through the
purchase and preservation of high
conservation value land.
Through protecting standing forests,
under threat of clearance, carbon is
locked in that would otherwise be released.
These protected forests are then able to
continue absorbing carbon from the
atmosphere, referred to as REDD
(Reduced Emissions from Deforestation
and forest Degradation). This is now
recognised as one of the most cost-effective
and swiftest ways to arrest the rise in
atmospheric CO
2
and global warming
effects. Additional to the carbon benefits
is the flora and fauna this land preserves,
including a number of species identified
at risk of extinction on the IUCN Red List
of Threatened Species.
Designed and produced by
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www.friendstudio.com
This report has been printed on
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The mill and printer are both
certified to ISO 14001 environmental
management system. The report was
printed using vegetable-based inks
by a CarbonNeutral® printer.
Forward-looking statements
This Annual Report and Accounts contains certain forward-looking
statements with respect to Saga’s expectations, including strategy,
management objectives, future developments and financial position
and performance. These statements are subject to assumptions,
risks and uncertainties, many of which relate to factors that are
beyond Saga’s ability to control and which could cause actual results
and performance to differ materially from those expressed or
implied by these forward-looking statements. Any forward-looking
statements made are based upon the knowledge and information
available to Directors on the date of this Annual Report and Accounts
and are subject to change without notice. Shareholders are cautioned
not to place undue reliance on the forward-looking statements.
Nothing in this Annual Report and Accounts should be construed
as a profit estimate or forecast.
CBP029867
SAGA PLC
3 Pancras Square
London
N1C 4AG