The Local Government Pension Scheme (LGPS) has reached record funding levels, with the aggregate position for the 87 funds in England and Wales rising to 147 per cent as of 30 September 2025, according to Isio’s latest Low-Risk Funding Index.

The figures mark a sharp improvement from the 126 per cent recorded at 31 March 2025, the valuation date for the 2025 actuarial cycle.

The index also revealed a low-risk surplus of £147bn, the first time the LGPS surplus has exceeded £100bn.

Isio attronited the improvement to higher gilt yields, easing inflation expectations and rising asset values, which have pushed total LGPS assets above £450bn for the first time.

In addition, Isio reported that, as at the end of September, 86 of the 87 participating funds had a funding level of 100 per cent or more, ranging between 101 per cent and 226 per cent funded.

The only exception was the closed Environment Agency scheme.

By comparison, at the previous valuation in March 2022, the aggregate low-risk funding position stood at just 67 per cent, with no funds at or above full funding on a low-risk basis.

The consultancy argued the latest results provided a “unique opportunity” for employers, such as local authorities, police and fire authorities, school academies, universities and housing associations, to reassess contribution levels and risk exposure, particularly as many continue to face financial pressure.

Isio partner and public services leader, Steve Simkins, said the results demonstrated the "strength and security" of the LGPS in England and Wales and the need for "root-and-branch" reviews of funding strategies to enable employers to benefit from significant reductions to contribution rates and de-risking options.

“Funding levels, assets and surpluses are all higher than they have ever been,” he continued.

“As LGPS funds review funding strategy statements and share proposed contribution rates with employers, the outlook should be extremely positive and could enable transformational change for employers in the public sector who are under significant financial pressure.”

Simkins also urged funds to take the recent improvement into account before finalising their 2025 valuations, arguing that it was "normal practice" to consider post-valuation experience.

"We would encourage funds to take these improvements into account to support a positive approach to the 31 March 2025 valuation.

"Where decisions have been taken early on in the valuation process, these may need to be reconsidered in light of the 30 September 2025 position,” he concluded.

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