Charlotte Fletcher, Business Development Actuary, at Standard Life, part of Phoenix Group: "Funding levels for UK defined benefit (DB) pension schemes continued to rise during June 2025. The aggregate section 179 funding ratio for the 4,969 schemes in the PPF 7800 Index now stands at 126.2 per cent at the end of June 2025, up slightly from 125.6 per cent at the end of May. This modest improvement over the last month continues a broadly positive trend in 2025, with many schemes maintaining their strong funding position. However, geo-political developments continue to drive some market uncertainty, and trustees may be looking to take a more proactive stance. With bulk annuity pricing remaining at competitive levels, now may be an opportune moment to lock in gains, particularly for schemes that have achieved their long-term funding objectives.”
Sarah Elwine, Actuarial Director at leading independent consultancy Broadstone, said: “Rising asset values through June supported an improved funding position for many defined benefit pension schemes. Across the universe of schemes, the picture remains one of robust health with the majority of schemes now registering a surplus increasing their options and decreasing their cost to the sponsoring employer. As we look ahead to the second half of 2025, the only known appears to be more unknowns as uncertainty appear likely to persist amid ongoing tariff negotiations, volatile geopolitics and a challenging Autumn Budget for the UK Chancellor to deliver. This creates a difficult environment for Trustees as they look to navigate through the turbulence. Investment strategies must be closely managed to achieve longer-term objectives however opportunities continue to emerge in the insurance market, with new options on offer and reforms making run-on a more attractive route for many schemes."
Vishal Makkar, Managing Director, UK Wealth Consulting at Gallagher: “This month’s PPF 7800 Index shows an increase in the aggregate funding, with the surplus now standing at £230.5bn. The UK’s DB schemes owe their current position to a combination of strong market conditions and disciplined funding strategies, which have in turn led many trustees to pursue long-term goals such as buy-out or consolidation. This financial strength comes at a pivotal moment for the pensions sector. As the Pensions Schemes Bill moves through Parliament, the focus is shifting from stability to preparing for the upcoming changes. The Bill outlines a new set of rules that will give DB schemes more flexibility in when and how they return surplus funds to sponsors, though robust safeguards will still apply. This may create ripple effects across the market, unlocking new investment opportunities while also creating new liabilities in the event of mismanagement. The Pensions Regulator’s new guidance highlights four key priorities for trustees: saver outcomes, scale, innovation, and data quality. This new guidance expands the options available to well-funded schemes and provides much-needed clarity to trustees in this very dynamic moment. With further parliamentary scrutiny and potential amendments expected, trustees should take this moment to reassess their de-risking timelines and member communications. As surplus conversations evolve, trustees must balance opportunity with caution, ensuring all decisions remain grounded in member security, transparency, and their long-term fiduciary duties.”
PPF publish PPF7800 Index update for June 2025
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