The aggregate surplus of UK defined benefit (DB) pension schemes against long-term funding targets remained “extremely positive” at £189bn in June, a fall of £2bn compared to the end of last month, analysis from XPS Group has revealed.

Aggregate scheme assets marginally increased over June 2025 as growth assets experienced positive returns, along with matching assets rising in line with liabilities.

Aggregate scheme liabilities also increased slightly, driven by decreases in gilt yields.

The latest figures indicate that funding levels have increased by £26bn (4 per cent) in the past year, with current assets totalling £1,151bn and liabilities of £962bn.

The past month has seen major policy announcements, including the Pension Schemes Bill, the government’s response to the DWP consultation on “Options for Defined Benefit Schemes”, and guidance from The Pensions Regulator (TPR) on endgame options.

XPS Group said trustees and employers are now revisiting their long-term objectives and assessing the opportunities available to them to improve outcomes for all stakeholders as they plan how to reach their chosen endgame.

For example, a recent XPS Group poll found that 76 per cent of trustees are more likely to adopt the new statutory override, which would give them the power to distribute surplus.

XPS Group senior consultant, Jill Fletcher, explained that, as many defined benefit (DB) schemes are fully funded on or above their long-term funding basis, they are now considering their objectives and strategy for reaching that endgame.

“While for some schemes the objective will continue to be working towards insuring benefits through buy-in or buy out, the potential to run-on a scheme and make use of the recently announced surplus flexibilities may now be a more attractive and feasible option for others,” she added.

However, Broadstone has warned that further uncertainty and continued market volatility are likely ahead, given further tariff announcements from and negotiations with the United States, which will provide trustees with “significant food for thought” as they manage their investment strategy through this period.

---