The aggregate defined benefit (DB) pension scheme surplus in the UK increased by £60bn to £250bn in June, according to the PwC Pension Trustee Funding Index, marking the highest surplus recorded since the launch of the index in 2015.

The index showed that whilst asset values fell over the month amid market volatility, this was more than offset by a larger fall in liabilities, as long-term bond yields continued to rise.

Liabilities fell by £110bn to £1,340bn, while asset values declined by £50bn to £1,590bn.

The funding ratio increased by 6 percentage points to 119 per cent.

PwC’s Adjusted Funding Index, which incorporates strategic changes “available for most pension funds”, including a move away from low-yielding gilt investments to higher return, income-generating assets, and a different approach for the longevity assumption, showed an even higher surplus of £360bn.

According to the adjusted index, liabilties had falled by £90bn to £1,230bn, while the funding ratio was recorded at 129 per cent.

PwC global head of pensions, Raj Mody, highlighted the latest figures as a “stark reminder of what pension schemes are about”, emphasising that assets are invested not just for the sake of it, but to cover long-term pension liabilities.

However, Mody also clarified that whilst scheme surpluses are seemingly getting “bigger and bigger” at an aggregate level, the picture is different at an individual level.

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