Barclays defined benefit pension deficit increased by £1.9bn in the year to 30 September 2016, its latest triennial valuation has revealed.

In its interim results, published 28 July, it revealed its deficit of its UK Retirement Fund, which is its main fund, had reached £7.9bn at 30 September 2016, compared to £6bn at 30 September 2015. Its triennial valuation revealed a funding level of 81.5 per cent.

It said the increase to the deficit was driven by the increase in liabilities due to changes in financial conditions, namely from falls in gilt yields and the lower outlook for future investment returns, offset by favourable asset returns over the year and payment of deficit reduction contributions.

Barclays has reached an agreement with the trustee on a revised scheme-specific funding target, statement of funding principles, schedule of contributions, a recovery plan to seek to eliminate the deficit relative to the funding target and some additional support measures.

The agreement with the UKRF Trustee also takes into account the changes to the group structure that will be implemented as a result of ring-fencing . The UKRF will remain in Barclays Bank PLC (BBPLC).

According to the group’s latest IAS19 valuation, as at 30 June 2017, there was a surplus of £0.4bn across all schemes, compared to a deficit of £0.4bn in December 2016. The UKRF had a surplus of £0.7bn (December 2016: £27m deficit). The movement for the UKRF was driven by payment of deficit reduction contributions over the last six months, with changes in market conditions largely being neutral.

Barclays said the main differences between the funding and IAS 19 assumptions were a different approach to setting the discount rate and a more conservative longevity assumption for funding.

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