The deficit of defined benefit schemes in the PPF 7800 Index decreased by £26.6bn over September, ending the month on £38.7bn.

The Pension Protection Fund’s latest update revealed that the deficit of the 5,588 schemes in the index fell from £65.3bn to £38.7bn, as of the end of September 2018. The position has improved from a year ago, when a deficit of £95.8bn was recorded at the end of September 2017.

The funding level (assets as a percentage of s179 liabilities) of schemes increased over this month from 96.1 per cent to 97.7 per cent at the end of September 2018. The funding level is higher than the 94.2 per cent recorded in September 2017.

Within the index, total scheme assets amounted to £1,614.6bn at the end of September 2018. Total scheme assets decreased by 0.8 per cent over the month and increased by 4.6 per cent over the year. Total scheme liabilities were £1,653.3bn at the end of September 2018, a decrease of 2.3 per cent over the month and an increase of 0.8 per cent over the year.

The aggregate deficit of all schemes in deficit at the end of September 2018 is estimated to have decreased to £170.3bn from £188.5bn at the end of August 2018. At the end of September 2017, the equivalent figure was £200.5bn.

At the end of September 2018, the total surplus of schemes in surplus increased to £131.6bn from £123.2bn at the end of August 2018. At the end of September 2017, the total surplus of all schemes in surplus stood at £104.7bn.

The number of schemes in deficit at the end of September 2018 decreased to 3,437, representing 61.5 per cent of the total 5,588 defined benefit schemes. There were 3,562 schemes in deficit at the end of August 2018 (63.7 per cent) and 3,698 schemes in deficit at the end of September 2017 (66.2 per cent).

The number of schemes in surplus increased to 2,151 at the end of September 2018 (38.5 per cent of schemes) from 2,026 at the end of August 2018 (36.3 per cent). There were 1,890 schemes in surplus at the end of September 2017 (33.8 per cent).

Commenting, BlackRock head of UK strategic clients Andy Tunningley said: “As Team Europe celebrated winning the Ryder Cup in September, so pension schemes also had a successful month with funding levels rising to their highest level for over a year.

"The PPF 7800 Index hit 97.7 per cent at the end of September, up from 96.1 per cent at the end of August and from 90.6 per cent this time last year, as gilt yields rose across the curve, reducing liabilities. Continued positive equity markets also helped to keep asset levels, and therefore funding levels high. However, we are still only 0.8 per cent above where funding levels were in January so schemes should not get complacent.”

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