The aggregate funding level for the 87 funds in the Local Government Pension Scheme (LGPS) in England and Wales rose from 126 per cent at the end of March to a record 147 per cent by 30 September 2025, according to Isio.
According to Isio’s Low-Risk Funding Index, the improvement is due to higher UK gilt yields, easing inflation expectations and increases in asset values. Total LGPS assets exceeded £450bn for the first time, resulting in a low-risk surplus of £147bn.
Of the 87 participating funds, 86 are now fully funded, with levels ranging from 101 per cent to 226 per cent. At the previous actuarial valuation in March 2022, the aggregate low-risk funding position was 67 per cent, with none of the funds fully funded on that basis.
Isio says the 2025 actuarial valuation presents an opportunity for employers to revisit early funding decisions and consider reducing contribution levels, while maintaining security and value for money amid ongoing financial pressures.
Isio’s Low-Risk Funding Index attributes the improvement to higher UK gilt yields, easing inflation expectations, and increases in asset values. Total LGPS assets exceeded £450bn for the first time, resulting in a low-risk surplus of £147bn.
Of the 87 participating funds, 86 are now fully funded, with levels ranging from 101 per cent to 226 per cent. At the previous actuarial valuation in March 2022, the aggregate low-risk funding position was 67 per cent, with none of the funds fully funded on that basis.
Isio says the 2025 actuarial valuation presents an opportunity for employers to revisit early funding decisions and consider reducing contribution levels, while maintaining security and value for money amid ongoing financial pressures.
Isio’s Low-Risk Funding Index attributes the improvement to higher UK gilt yields, easing inflation expectations, and increases in asset values. Total LGPS assets exceeded £450bn for the first time, resulting in a low-risk surplus of £147bn.
Of the 87 participating funds, 86 are now fully funded, with levels ranging from 101 per cent to 226 per cent. At the previous actuarial valuation in March 2022, the aggregate low-risk funding position was 67 per cent, with none of the funds fully funded on that basis.
Isio says the 2025 actuarial valuation presents an opportunity for employers to revisit early funding decisions and consider reducing contribution levels, while maintaining security and value for money amid ongoing financial pressures.
Isio partner and public services leader Steve Simkins says: “At the valuation date of 31 March 2025, our Low-Risk Funding Index revealed a funding level of 126 per cent, demonstrating the strength and security of the LGPS in England and Wales and the need for root and branch reviews of funding strategies to enable employers to benefit from significant reductions to employer contribution rates and de-risking options.
“With six months to go until the valuation is finalised, the LGPS finds itself in an even stronger position, delivering another full house of record high results. Funding levels, assets and surpluses are all higher than they have ever been.
“As LGPS funds review Funding Strategy Statements (FSSs) and share proposed contribution rates with employers, the outlook should be extremely positive and could enable transformational change for employers in the public sector who are under significant financial pressure .
“It is normal practice to take into account post-valuation experience. We would encourage funds to take these improvements into account to support a positive approach to the 31 March 2025 valuation. Where decisions have been taken early on in the valuation process, these may need to be reconsidered in light of the 30 September 2025 position.”