Indexes reveal UK DB scheme deficit increases

Indexes from both Mercer and PwC have revealed that the deficits of UK defined benefit pension schemes increased during May.

PwC’s Skyval Index found that the UK’s defined benefit deficit rose by £60bn to £240bn during May, while Mercer's monthly analysis revealed that the DB pension scheme deficit of companies in the FTSE350 increased by £5bn to £57bn during the same period.

In PwC's latest monthly update, the assets of the UK’s 5,450 DB pension schemes remained at £1.66bn, however liabilities were recorded at £1.9bn, a £60m increase on the £1.84bn total at the end of April.

The survey, which delivers monthly updates on the health of the UK’s defined benefit landscape, are based on publicly available data, including the Pension Protection Fund’s dataset.

PwC chief actuary, Steven Dicker, said that the deficit increase was “largely driven by a fall in the yields on government bonds while assets have stayed flat”.

He added: “This further illustrates how continuing economic uncertainty, particularly surrounding the future direction of long-term interest rates, leads to unhelpful volatility in pension funding levels on this measure.”

The rise follows a £80bn decrease in the deficit of UK DB schemes during April, when the deficit stood at £180bn.

Mercer's Pensions Risk Survey showed that liability values increased by £11bn £856bn due a 0.14 per cent fall in corporate bond yields. It said that This was partially offset by a 0.08 per cent decline in market implied inflation since April.

It also found that assets values increased by £6bn, from £793bn to £799bn.

Commenting, Mercer partner, Maria Johannessen, said: “The FTSE350 pension deficit continues to hover around the mid-£50bn range with no significant change over the past three months. We saw a more positive trend with regards to inflation which declined by 0.08 per cent in May, but the effect of this was mitigated by a 0.14 per cent fall in corporate bond yields.”

Mercer actuary, Charles Cowling, added: “Recent political developments in the UK and global economic uncertainty means that scheme trustees and sponsors must prioritise risk management. With Brexit uncertainty reaching a new high following Theresa May’s resignation, we expect volatility to persist for the foreseeable future.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


AI, finfluencers and the future of broking
The mortgage industry is evolving faster than ever. In this MoneyAge video, we examine the opportunities and challenges redefining the broker landscape, from AI-powered lending and changing customer expectations to housing affordability, property supply and the rise of financial influencers. Our guest from Chorley Building Society shares practical insights on what brokers need to do to stay relevant and thrive in a rapidly changing market.

Perenna and the long-term fixed mortgage market
Content editor, Dan McGrath, spoke to head of product, proposition and distribution at Perenna, John Davison, to explore the long-term fixed mortgage market, the role that Perenna plays in this sector and the impact of the recent Autumn Budget

NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.