03/06/2023 | Press release | Distributed by Public on 03/06/2023 05:18
Pensions funding improves as gilt yields hit highest point since October 2022 market turmoil
06 Mar 2023
Across February 2023, UK pension schemes' funding positions have risen by c.£30bn against long-term funding targets. Based on assets of £1,447bn and liabilities of £1,377bn, the aggregate funding level of UK pension schemes on a long-term target basis was 105% as of 27 February 2023.
Felix Currell, Senior Investment Consultant at XPS Pensions Group said: "It's been an encouraging start to the year for UK pension schemes which have benefited from the positive performance of global equity markets and rising gilt yields leading to an increase in funding levels. Despite the hope that central banks may be coming to the end of a period of aggressive rate hikes, there remains risks to the outlook of the global economy. Trustees will be hoping that if yields do continue to rise that growth markets do not splutter."
Notes:
XPS DB:UK Funding Watch monitors the combined deficit and funding level of UK defined benefit (DB) pension schemes (i.e. all registrable schemes - including hybrids) on a long-term target basis using a discount rate of Gilts + 0.5%. It combines XPS's market leading Member Analytics and the award-winning journey planning tool, Radar, enabling real time monitoring of changes and analysis of the reasons behind any movement.
An online version of XPS DB:UK is available here:https://www.xpsgroup.com/services/xps-pensions/xps-dbuk-funding-watch/