UK defined benefit (DB) pension schemes’ aggregate surplus against long-term funding targets rose to around £211bn in July 2025, according to XPS Group.
That’s £5bn higher than in June and £41bn more than a year ago. On an asset–liability basis, schemes hold £1,163bn in assets against £952bn in liabilities, giving a funding level of 122 per cent, a 24 per cent surplus increase year-on-year.
New data from the Continuous Mortality Investigation (CMI) shows life expectancy, especially for pensioners, has risen slightly for the first time since Covid-19. This could increase liabilities by about 1 per cent and slightly reduce surpluses.
XPS urges schemes to adjust assumptions based on members’ age, gender, and socioeconomic background, as post-pandemic mortality trends vary. Insurers may already have accounted for these changes.
XPS Group senior consultant Hannah Traylen says: “While we are seeing some positive headline improvements in mortality rates, it’s important to note that these improvements are primarily driven by reductions in mortality at older ages. Trustees and Employers should remain cautious in applying these trends to their funding assumptions, as younger working-age adults continue to experience higher mortality rates than pre-pandemic levels.
“Schemes must carefully tailor their mortality assumptions to reflect the unique demographic profile of their membership, taking into account factors like age, socioeconomic status, and the ongoing impacts of the pandemic on different groups before they assess the level of their own surplus and make strategic decisions.”
