DB pension surpluses remain at record highs, rising £31bn year-on-year, XPS analysis shows

DB pension surpluses remain at record highs, rising £31bn year-on-year, XPS analysis shows

19 Jan 2026

• UK DB pension schemes closed 2025 in a strong financial position, with XPS Group estimating aggregate surpluses of £214bn on long-term targets, up from £183bn the year prior.
• Scheme assets remained broadly stable in December 2025, with modest changes in gilt yields and inflation expectations preserving the value of matching assets. Returns from growth assets were softer than expected.
• Scheme liabilities edged down modestly over the month, as a small rise in gilt yields was largely offset by a slight increase in inflation expectations.

New analysis from XPS Group shows that UK DB pension schemes maintained strong funding positions throughout December 2025, relative to long-term targets. Total scheme assets stood at £1,176bn, compared with £962bn of liabilities, resulting in a modest month-on-month improvement in overall funding levels.

Through December, pension schemes continued to experience relatively stable funding positions. The analysis comes as Parliament continues to progress the Pension Schemes Bill, which proposes to give trustees and employers new powers to use scheme surpluses.

Jill Fletcher, Senior Consultant at XPS Group said: “As we move into 2026, many DB pension schemes are well-funded and increasingly focused on what comes next. With the Pension Schemes Bill moving through Parliament, this year is set to be a defining moment for how the industry manages and uses surplus.

Careful planning will be essential to ensure that both members and sponsoring employers are able to benefit - and that strong funding positions translate into long-term value.”
 

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.

The publication of the PPF’s Purple Book 2025 has impacted the asset value in the XPS DB:UK model at 30 November 2025, which has been updated since our December 2025 press release.

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.​​