Charlotte Fletcher, Business Development Manager, at Standard Life: “Defined benefit pension funding remained strong throughout October, with the aggregate Section 179 funding ratio for the 4,969 schemes in the PPF 7800 Index rising to 130.5%, up from 129.8% in September. With funding positions stabilised at elevated levels, trustees are increasingly focused on securing member benefits through insurance-based solutions. Nearly half of DB schemes now favour buy-in as their endgame strategy, and of those, 40% plan to approach an insurer within the next year—highlighting continued momentum in the bulk purchase annuity (BPA) market. As the Pension Schemes Bill and proposed surplus reforms reshape the regulatory landscape, trustees are weighing the potential benefits of surplus flexibility against the risks of uncertainty. With two-fifths expressing concern over whether reforms serve members’ best interests, many are prioritising the certainty of insurance-based solutions and avoid the risks of waiting for legislative clarity.”
Jaime Norman, Senior Actuarial Director at Broadstone, said: “October saw continued improvements in the funding levels of many defined benefit pension schemes thanks to strong gains in global equities through the month. It means many schemes will be in a strong position to consider their long-term strategic objectives especially as we approach what is typically the busiest period of the year for bulk purchase annuity transactions. Following last week's announcement from the Bank of England that base interest rates would remain on hold (albeit only marginally), investment markets are now looking ahead to the UK Government's Autumn Budget due at the end of the month with an expectation that taxes will rise to support any policy announcements rather than being funded by gilt markets. In addition, as we approach corporate year-ends it is generally expected that the pension cost accounting position in company accounts will be generally better than the previous year. This will provide a good opportunity for Corporates to review their pensions strategy; schemes will be grappling with the more onerous requirements of new funding code but could benefit from greater options for dealing with surpluses.”
Vishal Makkar, Managing Director, UK Wealth Consulting at Gallagher: “In a show of continued resilience, the UK’s DB schemes held their ground with the aggregate surplus now standing at £271.3bn. This position will be tested over the next few weeks as the Autumn Budget may influence the long-term landscape for pension schemes. Any change to tax relief and contribution rules will influence growth. Now is the time for trustees to reassess funding strategies and plan for the future. On a broader level, the Pension Schemes Bill is also in sharper focus, with trustees divided on how they want surpluses to be used. Against this backdrop, many schemes will be adopting a more defensive stance as they navigate economic headwinds. With changes in the pipeline, maintaining clear communication between sponsors and members will be essential until the Government’s proposals are formally set in stone.”
View the November update and see the supporting data on the 7800 Index for 31 October 2025 here
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