The deficit of UK defined benefit (DB) pension schemes dropped from £220bn to £190bn during November, bringing it to its lowest point since May, according to the latest PwC Skyval Index.

The fall in the deficit was primarily driven by a boost in the global equity markets, while the ongoing volatility was attributed to the continued economic and political uncertainty.

The latest index also showed that the assets of the UK’s 5,450 corporate DB pension funds increased by £20bn to £1,740bn, while liabilities fell by £10bn to £1,930bn.

This is the third month of reductions following the deficit reaching its highest level since 2018 in August this year (£340bn). Since then, the deficit has fallen by a total of £150bn to reach its current level.

Commenting on the index, PwC’s chief actuary, Steven Dicker, said: “The reduction in deficit this month is mainly due to a rally in global equity markets boosting pension fund's assets over November. The measured liabilities link to gilt yields, which have moved little over the month.

“The volatility, including the recent run of deficit reductions, has been due to continued economic uncertainty impacting real asset values globally and UK government bond yields in different ways at different times."

PwC’s Skyval Index, based on the Skyval platform used by pension funds, provides an aggregate health check of the UK’s c.5,450 corporate DB pension funds.

The current Skyval Index figures are based on the 'gilts plus' method, widely used by scheme actuaries.

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