Jessica O'ConnorThe combined surplus of nearly 5,000 defined benefit (DB) pension schemes tracked by the Pension Protection Fund’s 7800 Index rose sharply in July, increasing by £10.6bn to reach £241.1bn.
The total surplus had stood at £230.5bn the previous month.
The funding ratio – a measure of assets compared to liabilities – improved by 1.5% to 127.7%, while the number of schemes in surplus rose to 3,684, representing 74.1% of all schemes in the index.
Sarah Elwine, actuarial director at independent consultancy Broadstone, said: “July saw large gains in equity markets driving some global stock markets to all-time highs, increasing asset values and further solidifying the strong funding positions held by many defined benefit pension schemes.
“As we head into what is typically the busier half of the year for pension scheme de-risking, we are already seeing growing evidence of accelerating momentum in the Bulk Purchase Annuity market with several jumbo deals announced recently.
“Despite the cloudy outlook surrounding the UK economy, it is clear that pension scheme trustees are likely to have good variety of options to secure their members’ benefits. Whether that is through the insurance market or exploring the possibility of run-on, trustees should continue monitor their funding position and investment strategies to ensure they can achieve their long-term objectives.”
