Defined benefit (DB) pension scheme funding levels decreased in October due to falling gilt yields, according to Broadstone’s Sirius Index.

The index measures how various scheme strategies are performing on their paths to low dependency through tracking a growth-focused model scheme and a more conservative matching-focused model scheme.

The latest update found that funding levels for both schemes fell over the month.

The growth-focused scheme funding level finished October lower, reducing from 94.0 per cent funded to 92.5 per cent, which Broadstone said was the biggest fall in a long time.

The matching-focused scheme funding fell from 89.2 per cent to 88.7 per cent over the same period.

Both schemes started 90.0 per cent funded at the start of 2026.

According to Broadstone, the falling gilt yield over the month caused liabilities to rise, most of which was offset by assets rising for the matching-focused scheme but only partially offset in the growth-focused scheme.

Growth assets fell slightly, negatively impacting both schemes’ funding positions particularly, the growth-focused scheme.

Broadstone head of trustee services, Christopher Rice, explained: “October unexpectedly saw gilt yields fall slightly, which was particularly surprising given the concerns in the lead up to the Budget. This would have negatively impacted schemes that had not fully hedged interest rate risk.

“Declining growth markets also would not have helped the funding positions of schemes holding equities and similar assets.

“Smoothing out volatility during September, and protecting against gilt yield falls in October have demonstrated the benefits of hedging and many schemes that have derisked will have seen relatively stable funding positions over 2026.”

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