Pensions - Articles - Current inflation levels finally start to stall

 • XPS’s DB:UK funding tracker estimates that £100bn of liabilities have been removed from UK defined benefit pension schemes over 2022 due to long-term inflation expectations falling despite short-term inflationary pressures.

  

 • However, inflation is not expected to fall quickly and could stay in double digits for a while yet meaning that the income of UK private sector defined benefit pensioners still lags being the cost of living.
 
 Charlotte Jones, Senior Consultant at XPS Pensions Group, said: “We’re seeing schemes working with companies to explore additional pension increases and support their pensioners through the cost-of-living crisis. Whilst the average scheme is much better funded over 2022 there is a wide disparity of experience. For some schemes loss of hedging following the spike in gilt yields and falling growth asset values could mean that long-term security is still a way off. As a result, some schemes are unlikely to be able to boost their pensioners income.”