The aggregate surplus of the 4,969 schemes in the Pension Protection Fund’s 7800 Index increased by £16.2bn through October 2025, rising to £271.3bn in surplus.
The funding ratio rose by 0.7 percentage points to 129.8% and the number of schemes in surplus rose to 3,844, representing more than three-quarters (77.4%) of all schemes in the universe.
“The estimated aggregate funding position of the eligible DB universe continued to improve in October, reaching a surplus of £271.3bn at the month end, as UK and overseas equities performed well. The improvement in the aggregate position of DB schemes came despite a 3.7 per cent growth in liability values, fuelled largely by a decrease in bond yields after the US Federal Reserve restarted policy rate cuts and the gilt market gained confidence that the Budget would see a fiscal tightening. These changes saw the funding ratio increase by 0.7 percentage points, hitting a 22-month high of 130.5 per cent,” said Shalin Bhagwan, PPF Chief Actuary.
“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,” said Jaime Norman, Senior Actuarial Director at Broadstone.
“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 the new funding code but could benefit from greater options for dealing with surpluses,” he added.