Pensions - Articles - DB pension surpluses increase slightly over September

 Over September 2024, UK pension schemes’ funding positions remained stable (relative to long-term funding targets) according to new analysis from XPS Group. With assets totalling £1,471bn and liabilities of £1,285bn, the aggregate funding level of UK pension schemes on a long-term target basis remains extremely positive, at 115% of the long-term value of liabilities, as of 27 September 2024.

 The strong funding levels of many UK pension schemes held firm through September as the Monetary Policy Committee (MPC) voted to maintain the Bank of England base rate at 5%, with inflation within 0.5% of the Bank’s 2% target for the fifth consecutive month.

 Attention has now turned towards the Chancellor’s Autumn statement on the 30th of October and a widely anticipated base rate cut when the MPC next meets on the 7th of November.

 Henry Shore, Senior Consultant at XPS Group said: “With a highly anticipated budget and possible further rates cuts on the horizon, pension scheme funding levels have remained near record levels.

 With these surpluses – and with the new DB funding regulations now in force – many trustees and sponsors are now looking at their long-term strategies and strategy paths to assess whether insurance is the right route for them or if the scheme can be used to generate additional surplus for the benefit of both members and sponsors alike.”