UK defined benefit (DB) pension scheme funding levels remained strong in October, with the aggregate surplus against long-term funding targets increasing to a further record high of £240bn, XPS Pensions Group has revealed.

The latest analysis from XPS showed that DB pension surpluses had risen by £4bn over the past month, with the continued funding improvements seen over the past year meaning that the aggregate surplus is now £57bn higher than it was in October 2024.

The latest improvements were primarily driven by an increase in aggregate scheme assets (totalling £1,207bn), as matching assets rose in value as bond yields decreased, while growth assets, such as global equities, also displayed positive performance.

Aggregate scheme liabilities also increased to £967bn, driven by a reduction in gilt yields.

However, this was more than offset by the increase in assets, resulting in a record aggregate funding level of 125 per cent of the long-term target value of liabilities, as at 31 October 2025.

Commenting on the improvements, XPS Group senior consultant, Jill Fletcher, said: “Funding levels of UK DB pension schemes remained strong throughout October 2025 supported by widespread hedging against gilt yield movements, which protected long-term funding positions, and kept long-term strategies on course, as gilt yields fell."

This is also in line with the latest update from the Pension Protection Fund's 7800 Index, which revealed that the aggregate DB funding ratio reached 129.8 per cent in September, a high not seen since December 2023.

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