The PPF 7800 Index for August shows the aggregate funding surplus for the DB universe climbing £10.6bn to £241.1bn, a further boost to funding resilience.
Meanwhile, the funding ratio increased by 1.5 percentage points to 127.7 per cent and the number of schemes, 4,969, remains unchanged.
PPF head of actuarial financial management Aaron Pang says: “Long-dated government bond yields moved higher during July in response to global fiscal policy decisions, leading to a fall in estimated liability values across the PPF-eligible DB universe. Meanwhile, despite the accompanying slight reduction in bond values, estimated asset values rose overall, owing to large gains in equity markets.
“This followed a series of trade deal announcements contributing to all-time highs in global stock markets. As a result of these movements, the estimated aggregate funding position of the DB universe increased by £10.6 bn, reaching a surplus of £241.1 bn at the month end, while the funding ratio rose by 1.5 percentage points, to 127.7 per cent.”
Gallagher managing director, UK wealth consulting Vishal Makkar says: “This month’s PPF 7800 Index shows a further increase in aggregate funding, with the surplus now standing at £241.1bn. It’s a clear sign that scheme funding is still resilient, supported by strong gilt yields and solid equity performance. Many schemes have taken the opportunity to lock in these gains through derisking – a smart move that has fortified their long-term positions.
“But while funding positions have improved, the wider pensions landscape is changing. The Pension Schemes Bill and related regulatory initiatives – including reviews of value for money in DC schemes and commission-based advice models – are pushing trustees and sponsors to rethink long-term strategy. With the state pension age rising to 67 and concerns over retirement adequacy growing, particularly for those relying on auto-enrolment alone, private pensions are more important than ever.
“Trustees and sponsors should use the current funding strength not just to consider further de-risking, but to try and secure better member outcomes and address wider challenges in the retirement system.”
