Defined benefit (DB) pension scheme funding levels continued to improve in June 2025, according to Broadstone, although further uncertainty and continued market volatility are likely ahead of further tariff announcements from and negotiations with the United States.

Whilst the first half of the year was characterised by "significant" market volatility in the wake of 'Liberation Day', the Broadstone Sirius Index, which monitors how various pension scheme strategies are performing on their journeys to self-sufficiency, showed improvements across both the fully hedged and half-hedged scheme amid calmer market conditions in June.

In particular, the funding level of the fully hedged scheme rose from 69.3 per cent at the end of May to 70.3 per cent at the end of June, representing more or less the entire gain for the first half of the year as funding rose from the end of December 2024 (69.2 per cent)

For the half-hedged scheme, the gains in funding were smaller through the previous month, but markedly larger through the first half of the year, rising from 103.4 per cent (December 2024) to 105.8 per cent (May 2025) before increasing again to 106.2 per cent at the end of June.

Commenting on the latest update, Broadstone head of trustee services, Chris Rice, said: "The key market event of H1 2025 was undoubtedly ‘Liberation Day’, which sent shockwaves through global economies and drove significant market volatility.

“Markets have since recovered and defined benefit pension schemes in the UK weathered that storm successfully to register overall funding level improvements through the first half of the year.

“The half also saw notable reforms to the defined benefit pension scheme market with, for example, the government confirming plans to allow schemes to access surpluses."

However, the firm warned that there are no guarantees of a smooth second half of the year.

“Looking ahead to the second half of the year, there is still uncertainty across the geo-political landscape and continued market volatility is likely ahead of further tariff announcements from and negotiations with the United States," Rice added.

“This combines to give trustees significant food for thought as they look to manage their investment strategy through this period. There are also opportunities in an insurance market that is offering new options while run-on also presents a more attractive pathway following reforms to the market.”

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