Barclays has increased its pension surplus across all schemes from £1.8bn to £2.5bn in the first six months of 2020, according to the banking group’s half-year report.

The UK Retirement Fund (UKRF), which is the group’s main scheme, had a surplus of £2.8bn at the half year point, compared with £2.1bn at the end of December 2019.

This increase was attributed to higher than assumed asset returns and lower than expected long-term price inflation, partially offset by a decrease in the discount rate.

The UKRF scheme is made up of 10 sections, including defined benefit (DB), defined contribution and hybrid parts, and covers 220,000 members.

The most recent triennial actuarial valuation of the UKRF scheme was completed in February 2020 and showed a funding deficit of £2.3bn and a funding level of 94 per cent.

The next triennial actuarial valuation of the UKRF scheme is due to be completed in 2023 with an effective date of 30 September 2022.

A revised deficit recovery plan had been agreed with deficit reduction contributions of £500m required in 2019 and 2020, £700m in 2021, £294m in 2022 and £286m in 2023.

Barclays subsequently paid the £500m deficit reduction contribution agreed for 2020 on 12 July.

At the same time, the UKRF scheme subscribed for non-transferable listed senior fixed-rate notes for £750m, backed by UK gilts, which entitle the scheme to semi-annual coupon payments for five years and full repayment in cash in three equal tranches in 2023, 2024 and at final maturity in 2025.

This investment in senior notes means the regulatory capital impact of the £500m deficit reduction contribution paid on 12 June 2020 takes effect in 2023, 2024 and 2025 on the notes’ maturity.

Barclays DB pension fund assets rose from £1.6bn to £3.6bn in the first quarter, before dropping back down to £2.1bn by the end of June.

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