DB pension surpluses continue to stand at record levels, up £48bn year-on-year in September

DB pension surpluses continue to stand at record levels, up £48bn year-on-year in September

07 Oct 2025

• XPS Group estimates UK DB pension schemes maintained a £222bn aggregate surplus against long-term funding targets, up £2bn in September 2025 and £48bn year-on-year.
• Aggregate scheme assets saw a small rise in September 2025, as matching assets rose in value as bond yields decreased. Growth assets such as global equities also displayed positive performance.
• Aggregate scheme liabilities also increased, driven by a slight reduction in gilt yields.

New analysis from XPS Group shows UK pension schemes continued to enjoy strong funding positions throughout September 2025 (relative to long-term funding targets). With aggregate assets totalling £1,157bn and liabilities of £934bn, schemes achieved a record funding level of 124% of the long-term target value of liabilities, as at 30 September 2025.

Jill Fletcher, Senior Consultant at XPS Group said: “The strong funding positions of UK DB schemes looks set to continue. Many schemes are now well hedged against changes in gilt yields, which should provide stability as markets evolve. For trustees and sponsors, these surplus levels create new strategic options but also demand careful planning.​​​​​​​

This news follows the announcement from the Pension Protection Fund (PPF) that no PPF levies will be charged for 2025/26. Along with DB pension schemes, the PPF has also seen improvements in its funding position, amassing a surplus of approximately £14.1bn (as reported in PPF’s annual report and accounts as at 31 March 2025). This was driven by the accumulation of PPF levies collected in previous years as well as positive investment performance. The announcement will be welcome news to many schemes and their sponsors, reducing ongoing running costs.”

Notes:

XPS DB:UK tracks the funding position of UK defined benefit (DB) pension schemes on long-term funding target and buyout bases, enabling trustees and corporate sponsors to see how their scheme’s funding compares to the wider pensions landscape. The model was refreshed and relaunched in July 2025 to take account of published information from the Pensions Regulator and Pensions Protection Fund and insight from XPS’s market leading Member Analytics and the XPS Data Pool.

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%) and XPS’s in-house buyout basis. It combines XPS’s market leading Member Analytics and the XPS Data Pool with 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/