Defined benefit (DB) pension scheme funding levels deteriorated slightly in September amid heightened market volatility driven by political developments and inflation concerns, according to the latest Broadstone Sirius Index.

The index, which tracks the performance of different pension scheme investment strategies on their journeys towards low dependency, revealed that both its ‘growth focused’ and ‘matching focused’ schemes experienced modest declines in funding over the month.

The ‘growth focused’ scheme saw its funding level fall by 0.2 percentage points, from 94.2 per cent at the end of August to 94 per cent at the end of September.

Meanwhile, the more conservative ‘matching focused’ scheme fell slightly more, by 0.6 percentage points, from 89.8 per cent to 89.2 per cent over the same period.

Both schemes began 2026 with funding levels of 90 per cent, measured against a low dependency basis.

Despite the relatively small month-end changes, Broadstone noted that funding levels fluctuated throughout September, with the ‘growth focused’ scheme peaking at 1.2 percentage points above its trough.

The ‘matching focused’ scheme experienced less pronounced volatility, with a peak-to-trough fluctuation of 0.7 percentage points.

Broadstone attributed the volatility to interest rate movements, which initially fell after the Bank of England paused gilt sales, then rose amid concerns over diesel shortages and inflation.

Commenting on the findings, Broadstone head of trustee services, Christopher Rice, said: “September saw a volatile month for investment markets, caused largely by political actions and concerns both in the UK and internationally.

“It is reassuring that in the light of this turmoil, both schemes have managed to suffer only minor falls in their funding positions thanks to the protections that most schemes have put in place.

“The funding dip in the middle of the month serves as a reminder to trustees and employers that funding risk remains, but managing their investment strategy well can help protect funding as far as possible.”

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