The surplus of UK pension schemes against long-term targets remained steady at £211bn in November 2024, up from £205bn in October, according to XPS Group.
Liabilities increased in value, and financing levels decreased due to a 0.1 per cent decline in long-term gilt yields. However, robust bond and equity returns in November countered this, keeping funding levels at a record high.
As of November 28, 2024, the funding of UK pension schemes was 117 per cent of liabilities, with £1,467 billion in assets and £1,256 billion in liabilities.
The record surpluses of DB pension schemes were in line with Chancellor Rachel Reeves’ recent Mansion House speech, which indicated a positive trend for public investment.
Meanwhile, according to October’s inflation figures, the CPI increased by 2 per cent, which was marginally more than anticipated.
XPS Group senior consultant Jill Fletcher says: “Gilt yields have stabilised following an increase during October, and immediately following the Budget, and funding levels have remained strong and relatively stable over November.
Following The Pensions Regulator’s new DB funding code coming into force in November 2024, schemes with a valuation date at the end of December are approaching their first valuation under the new DB funding regulations. Trustees and sponsors will therefore need to work together to evaluate their long-term strategy and determine whether insurance is the right route for them, or whether schemes can be run-on to generate additional surplus for the benefit of both members and sponsors.”
