Calculation:

• Beginning net pension liability: £100 million
• Add: Pension expense: £12 million
• Add: Remeasurements: -£3 million (negative means reduction)
• Ending net pension liability = £100 + £12 - £3 = £109 million

Explanation: The net pension liability changes during the year due to:

1. Pension expense - increases the liability as it represents the cost of providing pension benefits
2. Remeasurements - represent actuarial gains/losses and changes in assumptions; a negative remeasurement (-£3 million) reduces the liability

Note: The discount rate (5%) is provided but not needed for this calculation, as it would be used to calculate the present value of obligations rather than the year-over-year change.