The aggregate surplus of UK defined benefit (DB) pension schemes fell by £22.1bn in March 2023, according to the latest Pension Protection Fund (PPF) 7800 Index.

As reported by our sister publication Pensions Age, the surplus was estimated to have fallen from £381.4bn at the end of February 2023 to £359.3bn at the end of March 2023.

DB schemes’ average funding ratio fell from 137 per cent to 133.2 per cent during the same period.

The decline in the PPF 7800 Index aggregate surplus follows a £7bn increase in February.

In March, assets increased from £1,413.2bn to £1,439.8bn, although this was more than offset by liabilities also rising, from £1,031.8bn to £1,080.5bn.

There were 776 schemes in deficit and 4,355 schemes in surplus at the end of March.

The deficit of the schemes in deficit at the end of March was £5.7bn, up from £4.2bn at the end of the previous month.

Commenting on the figures, PPF chief finance officer and chief actuary, Lisa McCrory, said: “The collapse of SVB Bank and the forced merger of CSFB and UBS created a flight-to-quality demand for government bonds and increased markets’ expectations regarding the likelihood of a recession later this year or in 2024 - that pushed government bond yields lower during March, increasing the discounted value of scheme liabilities.

“Asset values will have risen less quickly as market interest rates fell, meaning that funding ratios decreased overall.”

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