Academy Trust Reserves: What the 2026 Benchmarking Report reveals

The 2026 Kreston Academies Benchmarking Report provides the clearest picture yet of how Academy Trusts are navigating persistent financial pressures – and reserves remain a crucial indicator of sector resilience.

While the latest figures show improvement, the underlying story is more complex, reflecting a sector benefitting from short‑term boosts yet facing long‑term uncertainty. 

Reserves recover, but caution remains high

Reserves have grown across all Trust types, supported by stronger-than-expected in-year surpluses and the late injection of the Core Schools Budget Grant (CSBG). These gains helped stabilise Trust finances following two difficult years. However, reserve levels have only risen modestly as a percentage of income. The sector-wide range has barely shifted year-on-year—from 7.9%–14.7% in 2024 to 7.7%–14.8% in 2025—suggesting that improved in‑year results have stabilised, rather than transformed, financial headroom. 

Crucially, 26% of Trusts are still holding reserves below 5% of income, the Department for Education’s threshold for heightened financial risk. This is an improvement on last year’s 31%, but still much higher than the 17% recorded in 2022. 

Actual reserves outperform forecasts – again

For every category of Trust, reserves significantly exceeded budget forecasts. This persistent gap between forecast and reality reflects conservative budgeting, significant in-year grant announcements, and strong cost controls across staffing and operations. It also raises an important question: Are Trusts making overly cautious decisions due to unreliable funding visibility? 

Fewer trusts in deficit, but pressures remain

In-year deficits have dropped sharply, improving to the best position since 2022. This improvement reflects stronger income streams and better cost control. Yet many remaining deficits are structural, driven by falling pupil numbers, rising SEND costs, estate pressures, and partially funded pay awards. 

Size matters: Larger MATs continue to outperform

The report reinforces a pattern seen in recent years: MAT size is one of the strongest predictors of reserves strength. Smaller Trusts and SATs continue to generate only marginal surpluses—often less than £50,000—leaving them vulnerable. Larger MATs, by contrast, benefit significantly from economies of scale and access to School Condition Allocation (SCA) capital funding. 

More trusts are designating funds strategically

An increasing number of Trusts are choosing to designate a portion of their reserves to specific strategic aims. Designations do not legally ring-fence money but offer transparency around planned use—a growing priority as scrutiny intensifies. 

Cash balances strengthen despite volatile conditions

Cash and investment balances per pupil remain strong, with Trusts becoming more confident in using multi-bank investment platforms to secure improved returns. Medium and large MATs show particularly high cash‑to‑reserve ratios owing to unspent SCA funds received near year‑end. 

Looking ahead: Confidence doesn’t match performance

Despite stronger results, forecast returns for 2026 and 2027 suggest reserve reductions across almost all Trust types. This mismatch underscores the sector’s greatest challenge: uncertainty. Without multi‑year funding clarity, Trusts remain cautious, particularly around recruitment and estates investment. 

Conclusion: A sector stabilising – not yet strengthened

The 2026 benchmarking results offer reasons for optimism: fewer Trusts in deficit, stronger reserves, and improved cash positions. But they also highlight lingering fragility, especially for smaller Trusts. The progress seen in 2024/25 provides essential breathing space—but lasting resilience will require sustained Government clarity on funding and long‑term investment. 

For further information on what the future holds for Academies and what can be done to create financial resilience please look out for our next article on Growing Multi academy trusts, or get in touch with your usual Kreston Reeves contact for further information.