Pensions - Articles - DB funding improves H1 2025 but clouds loom on the horizon

 The Broadstone Sirius Index – a monitor of how various pension scheme strategies are performing on their journeys to self-sufficiency – posts its latest update.

 The Broadstone Sirius Index reports its update for June 2025 with funding improvements across both the fully hedged and 50% hedged scheme amid calmer market conditions.

 The funding level of the fully hedged scheme rose from 69.3% at the end of May to 70.3% at the end of June, representing more or less the entire gain for the first half of the year as funding rose from the end of December 2024 (69.2%). For the 50% scheme, the gains in funding were smaller through the previous month, but markedly larger through the first half of the year, rising from 103.4% (December 2024) to 105.8% (May 2025) before increasing again to 106.2% at the end of June.

 Chris Rice, Head of Trustee Services at Broadstone, commented: "The key market event of H1 2025 was undoubtedly ‘Liberation Day’ which sent shockwaves through global economies and drove significant market volatility. Markets have since recovered and defined benefit pension schemes in the UK weathered that storm successfully to register overall funding level improvements through the first half of the year.

 “The half also saw notable reforms to the defined benefit pension scheme market with, for example, the government confirming plans to allow schemes to access surpluses. Looking ahead to the second half of the year, there is still uncertainty across the geo-political landscape and continued market volatility is likely ahead of further tariff announcements from and negotiations with the United States. This combines to give Trustees significant food for thought as they look to manage their investment strategy through this period. There are also opportunities in an insurance market that is offering new options while run-on also presents a more attractive pathway following reforms to the market.”