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Sensitivities (Tables)
 12 Months Ended
Mar. 31, 2020
Disclosure of sensitivity analysis for actuarial assumptions [abstract]  
Schedule of sensitivity analysis for actuarial assumptions
Derivative financial instruments were used to manage foreign currency risk as follows:
 
2020
 
2019
 
Sterling
£m

Euro
£m

Dollar
£m

Other
£m

Total
£m

 
Sterling
£m

Euro
£m

Dollar
£m

Other
£m

Total
£m

Cash and cash equivalents
18

—

55

—

73

 
97

2

153

—

252

Financial investments
813

—

1,185

—

1,998

 
965

—

1,016

—

1,981

Borrowings
(12,407
)
(4,150
)
(13,217
)
(1,020
)
(30,794
)
 
(10,591
)
(4,787
)
(12,126
)
(1,226
)
(28,730
)
Pre-derivative position
(11,576
)
(4,150
)
(11,977
)
(1,020
)
(28,723
)
 
(9,529
)
(4,785
)
(10,957
)
(1,226
)
(26,497
)
Derivative effect
(1,169
)
4,341

(4,214
)
1,175

133

 
(1,055
)
4,803

(5,245
)
1,465

(32
)
Net debt position
(12,745
)
191

(16,191
)
155

(28,590
)
 
(10,584
)
18

(16,202
)
239

(26,529
)
The currency exposure on other financial instruments is as follows:
 
2020
 
2019
 
Sterling
£m

Euro
£m

Dollar
£m

Other
£m

Total
£m

 
Sterling
£m

Euro
£m

Dollar
£m

Other
£m

Total
£m

Trade and other receivables
306

—

1,403

—

1,709

 
398

—

1,635

—

2,033

Trade and other payables
(1,177
)
—

(2,002
)
—

(3,179
)
 
(1,221
)
—

(2,085
)
—

(3,306
)
Other non-current liabilities
(85
)
—

(277
)
—

(362
)
 
(93
)
—

(247
)
—

(340
)
 
2020
 
2019
 
Income
statement
£m

Other equity
reserves
£m

 
Income
statement
£m

Other equity
reserves
£m

Financial risk (post-tax):
 
 
 
 
 
UK RPI change of 0.5%¹
27

—

 
27

—

UK interest rates change of 0.5%
14

47

 
16

13

US interest rates change of 0.5%
5

27

 
11

44

US dollar exchange rate change of 10%²
49

216

 
53

246

1.
Excludes sensitivities to LPI curve. Further details on sensitivities are provided in note 32(g).
2.
The other equity reserves impact does not reflect the exchange translation in our US subsidiaries’ net assets. It is estimated this would change by £1,319 million (2019: £1,119 million) in the opposite direction if the dollar exchange rate changed by 10%.
Our commodity contract derivatives are sensitive to price risk. Additional sensitivities in respect to commodity price risk and to our derivative fair values are as follows:
 
2020
 
2019
 
Income
statement
£m

Net
assets
£m

 
Income
statement
£m

Net
assets
£m

Commodity price risk (post-tax):
 
 
 
 
 
10% increase in commodity prices
26

26

 
26

26

10% decrease in commodity prices
(27
)
(27
)
 
(27
)
(27
)
 
 
 
 
 
 
Assets and liabilities carried at fair value (post-tax):
 
 
 
 
 
10% fair value change in derivative financial instruments¹
12

12

 
(3
)
(3
)
10% fair value change in commodity contract derivative liabilities
9

9

 
—

—

1.
The effect of a 10% change in fair value assumes no hedge accounting.
The table below sets out the sensitivity analysis for certain areas of estimation uncertainty set out in note 1E. These estimates are those that have a significant risk of resulting in a material adjustment to the carrying values of assets and liabilities in the next year. Note that the sensitivity analysis for the useful economic lives of our gas network assets is included in note 13.
 
2020
 
2019
 
Income
statement
£m

Net
assets
£m

 
Income
statement
£m

Net
assets
£m

Pensions and other post-retirement benefit liabilities (pre-tax)¹:
 
 
 
 
 
UK discount rate change of 0.5%²
6

877

 
6

1,064

US discount rate change of 0.5%²
10

514

 
16

688

UK RPI rate change of 0.5%³
4

670

 
4

908

UK long-term rate of increase in salaries change of 0.5%
1

39

 
1

56

US long-term rate of increase in salaries change of 0.5%
2

47

 
2

46

UK change of one year to life expectancy at age 654
1

545

 
1

610

US change of one year to life expectancy at age 65
4

456

 
4

406

Assumed US healthcare cost trend rates change of 1%
31

507

 
32

503

 
 
 
 
 
 
Pension assets:
 
 
 
 
 
Change in value of unquoted equities by 10%
—

381

 
—

415

Change in value of unquoted properties by 10%
—

89

 
—

107

Change in value of unquoted diversified alternatives by 10%
—

152

 
—

142

 
 
 
 
 
 
Environmental provision:
 
 
 
 
 
10% change in estimated future cash flows
210

210

 
165

165

1.
The changes shown are a change in the annual pension or other post-retirement benefit service charge and change in the defined benefit obligations.
2.
A change in the discount rate is likely to occur as a result of changes in bond yields and as such would be expected to be offset to a significant degree by a change in the value of the bond assets held by the plans. In the UK, there would also be a £205 million net assets offset from the buy-in policies purchased in the year, where the accounting value of the buy-in asset is set equal to the associated liabilities.
3.
The projected impact resulting from a change in RPI reflects the underlying effect on pensions in payment, pensions in deferment and resultant increases in salary assumptions. The buy-in policies purchased during the year would have a £152 million net assets offset to the above.
4.
In the UK, the buy-in policies purchased during the year, and the longevity swap entered into previously, would have a £223 million net assets offset to the above.