UK defined benefit (DB) pension scheme funding levels have remained at a record high, with the aggregate surplus of the 4,838 schemes in the Pension Protection Fund’s (PPF) 7800 Index rising by £2.7bn in November 2025 to £357.6bn.

The PPF’s 7800 Index, which was updated to reflect the scheme valuation data supplied to The Pensions Regulator as part of the schemes’ annual scheme returns, revealed that total assets had fallen by 0.2 per cent to £1,118bn. However, this was offset by a 0.5 per cent fall in total scheme liabilities to £860.4bn.

PPF chief actuary, Shalin Bhagwan, suggested that the update in data ensures that the index is "more up-to-date and provides a clearer picture of the schemes we protect, helping us better understand the risks we face".

And this picture is positive, as Bhagwan stated: “This month's 7800, using the latest data, paints a picture of stability in the estimated funding of the eligible universe of DB schemes, with gilt yields largely unchanged at the month-end and equity markets fairly flat throughout November.

“The s179 funding ratio inched up by 0.4 percentage points, as estimated liability values fell slightly more than estimated scheme assets values, while the aggregate s179 funding position improved by £2.7bn to a £257.6bn surplus."

Separate analysis from XPS has painted a similar picture, as it estimated that UK DB schemes held £1,215bn in assets, against £963bn in liabilities, marking only a slight month-on-month dip in funding levels.

XPS senior consultant, Graham Robinson, said: “With the continued high funding levels within DB pension schemes, the enhanced flexibility around surplus distribution announced in the recent Budget is welcome news to trustees and members alike.

"However, careful consideration of all stakeholders will be required when considering any surplus distribution from well-funded schemes.”

These funding improvements are expected to continue into the new year, Broadstone actuarial director, Sarah Elwine, suggested that "looking forward to 2026, pension schemes remain extremely well-funded by historical comparisons and trustees will be in a strong position to consider their route to endgame".

"The de-risking market looks set for a highly active 2026 with an increasing number of options available to schemes to achieve their long-term strategic objectives," she added.

This was echoed by Gallagher UK wealth consulting managing director, Vishal Makkar, who stated: “This resilience will ensure confidence levels remain high into the New Year. The Pension Schemes Bill has now entered the report stage and will soon begin its third reading.

"Against an ever-changing backdrop, trustees must remain alert to the policy updates and ensure their strategies can flex to meet new regulatory demands while still seizing new growth opportunities.”

However, industry experts have pointed out that the PPF’s latest update does not yet account for the government’s announced changes to pre-1997 indexation in the Budget which it estimates could increase universe s179 liabilities by just under 12 per cent.

However, there is no direct impact on the funding measures for most schemes such as technical provisions (TPs) or buyout.

The PPF also pointed out that legislation is still subject to parliamentary scrutiny and some details will be set in regulations, with the actual impact dependent on the final legislation that is brought into force.

This article was first published on our sister title, Pensions Age.

---