Defined benefit (DB) pension scheme funding remained broadly stable in August, with funding levels changing only marginally over the month, according to Broadstone’s latest Sirius Index.

The index tracks two modelled schemes, a growth-focused scheme and a more conservative matching-focused scheme, to monitor how various strategies are performing on their paths to low dependency.

The growth-focused scheme edged up from 94.1 per cent at the end of July to 94.2 per cent, while the matching-focused scheme dipped slightly from 89.9 per cent to 89.8 per cent.

Funding levels showed little volatility during August, with the growth-focused scheme fluctuating by 0.6 percentage points and the matching-focused scheme by 0.4 percentage points.

Commenting on the results, Broadstone investment director, Andy Knight-Stephens, said: “August saw gilt yields reach levels not seen for decades. The move was part of a broader global government bond sell-off, driven by persistent inflation concerns and renewed focus on fiscal sustainability.

“Growth assets, particularly equities, delivered positive returns over August, with most major equity markets advancing in Sterling terms, despite the continued uncertain macroeconomic backdrop.

“Pension schemes will have seen mixed results over the month depending on their composition of fixed and inflation-linked liabilities and approach to investment strategy.”

He added: “Looking ahead we could see collateral calls for LDI arrangements, and schemes should consider asset allocation rebalancing needs in light of recent growth and matching asset performance.”

Broadstone said that both modelled schemes began the year 90.0 per cent funded.

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