The aggregate surplus of defined benefit (DB) pension schemes rose from £221.1bn to £230.5bn in June, after a rise in liability values was outpaced by the growth in DB schemes' estimated asset values, data from the Pension Protection Fund (PPF) has revealed.

The PPF's 7800 Index showed that the average funding ratio had also increased from 125.6 per cent in May to 126.2 per cent in June.

This was driven by a 2.5 per cent increase in total scheme assets to £1,110.3bn, which more than offset the 2 per cent increase in total scheme liabilities to £879.8bn.

The deficit of schemes in deficit also fell by £2.2bn, from £30.9bn to £28.7bn.

PPF chief actuary, explained: "After a month of fluctuating fortunes in government bond markets, which ultimately ended with overall lower yields, the PPF-eligible DB universe experienced an increase in their estimated liability values.

"However, this rise in liability values was outpaced by the growth in DB schemes' estimated asset values, driven by positive returns over the month for all asset classes, and particularly overseas equities, on the back of favourable economic data and better-than-expected corporate earnings reports."

However, Broadstone actuarial director, Sarah Elwine, said that "as we look ahead to the second half of 2025, the only known appears to be more unknowns as uncertainty appears likely to persist amid ongoing tariff negotiations, volatile geopolitics and a challenging Autumn Budget for the UK Chancellor to deliver".

“This creates a difficult environment for trustees as they look to navigate through the turbulence," she stated.

"Investment strategies must be closely managed to achieve longer-term objectives however, opportunities continue to emerge in the insurance market, with new options on offer and reforms making run-on a more attractive route for many schemes."

The upcoming Pension Schemes Bill is also set to bring further change, prompting Gallagher UK wealth consulting managing director, Vishal Makkar, to suggest that, "with further parliamentary scrutiny and potential amendments expected, trustees should take this moment to reassess their de-risking timelines and member communications".

"As surplus conversations evolve, trustees must balance opportunity with caution, ensuring all decisions remain grounded in member security, transparency, and their long-term fiduciary duties," Makkar added.

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