Funding of DB schemes continued to improve in January, with surpluses now standing at £220bn, relative to long-term targets, according to the latest analysis from XPS.
It says this figures is an increase of £21bn when compared to the same point last year – and comes as both trustees and sponsoring companies await new regulations allowing them greater flexibility to use these surplus funds.
XPS says there is “intense focus” on these changes, with a consultation on regulations governing surplus release expected later this year, followed by regulatory guidance in late 2026 or early 2027.
Overall total scheme assets stood at £1,180bn compared with £960bn of liabilities on a long-term funding basis. XPS says this has resulted in a modest month-on-month improvement in overall funding levels.
Scheme assets remained broadly stable in January 2026. Small rises in gilt yields were largely offset by a slight increase in inflation expectations, leading to a marginal fall in the value of matching assets. Returns from growth assets contributed to a modest improvement in asset values overall.
Scheme liabilities edged down modestly over January 2026, as a small rise in gilt yields was largely offset by a slight increase in inflation expectations.
XPS senior consultant at XPS Group Jill Fletcher says: “Having the option to access surplus for well-funded schemes could be a positive step for trustees, members and sponsors.
“As strong funding positions persist, some trustees and sponsors will be keenly awaiting the regulations that will enable this, so that strategic plans to run-on their schemes whilst making use of these flexibilities can be put into action.”