PPF 7800 deficit drops £22.8bn over July

The PPF 7800 deficit decreased by £22.8bn over July, dropping from £85.6bn at the end of June, to £62.8bn at the end of July.

The latest figures from the Pension Protection Fund revealed that the funding position has improved from a year ago, when the deficit stood at £117.2bn at the end of July 2017. The funding position of schemes increased from 94.9 per cent to 96.3 per cent; it is higher than the 92.9 per cent recorded at the end of July 2017.

Within the index, total scheme assets amounted to £1,621.4bn at the end of July 2018. Total scheme assets increased by 0.9 per cent over the month and increased by 4.9 per cent over the year. Total scheme liabilities were £1,684.2bn at the end of July 2018, a decrease of 0.5 per cent over the month and an increase of 1.3 per cent over the year.

The aggregate deficit of all schemes in deficit at the end of July 2018 is estimated to have decreased to £186.5 billion from £200.2bn at the end of June 2018. At the end of July 2017, the equivalent figure was £215.1bn.

At the end of July 2018, the total surplus of schemes in surplus increased to £123.6bn from £114.6bn at the end of June 2018. At the end of July 2017, the total surplus of all schemes in surplus stood at £97.9bn.

The number of schemes in deficit at the end of July 2018 decreased to 3,537, representing 63.3 per cent of the total 5,588 defined benefit schemes. There were 3,633 schemes in deficit at the end of June 2018 (65.0 per cent) and 3,797 schemes in deficit at the end of July 2017 (67.9 per cent).

The number of schemes in surplus increased to 2,051 at the end of July 2018 (36.7 per cent of schemes) from 1,955 at the end of June 2018 (35.0 per cent). There were 1,791 schemes in surplus at the end of July 2017 (32.1 per cent).

Commenting, BlackRock head of UK strategic clients Andy Tunningley said: “As temperatures have soared, so has the PPF 7800 index, which showed no signs of resting for the summer break, gaining 1.4 per cent to reach 96.3 per cent at the end of July.

“Global stock markets were positive for the month led by strong corporate earnings and reduced trade tensions, despite some sanctions coming into force, helping scheme funding levels to bounce higher. Whilst this is certainly an improvement on June’s closing level and since the beginning of 2017, schemes have not yet reached the heady funding heights of 96.9% experienced at the end of January – and with equity volatility expected to increase, gilt yields remaining stubbornly low and increasing Brexit and trade uncertainties causing concern, we may see these gains eroded over the remainder of the year.”

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