The aggregate surplus of defined benefit (DB) pension schemes fell £17.2bn to £215.5bn as at the end of March 2025, the Pension Protection Fund’s (PPF) 7800 Index has revealed.

The update showed that total DB scheme assets fell by 3.3 per cent over the past month, from £1,124.1bn to £1,087.2bn, as a result of the recent market volatility.

This was partially offset by an increase in total liabilities, as the estimated liabilities of schemes eligible for the PPF fell by 2.2 per cent to £871.7bn.

"Yields in government bonds rose both globally and domestically through March, with the market digesting news that the German parliament agreed to an easing of their debt brake and substantial package of fiscal easing, whilst at home markets reacted to the increased forecast for aggregate gilt sales over the next 5 years following the Chancellor’s Spring Statement," PPF chief actuary, Shalin Bhagwan, explained

This resulted in a "modest" reduction in the estimated funding ratio, by 1.4 percentage points, to 124.7 per cent, while the estimated aggregated funding position fell by £17.2bn to a £215.5bn surplus.

The number of schemes in deficit remained unchanged at 4,969, although the deficit of schemes in deficit increased by £4.2bn to £29.8bn.

Despite the dip in the overall aggregate funding, Gallagher managing director, UK wealth consulting, Vishal Makkar, said that "the fact remains that DB schemes are largely performing well in the UK, with many sitting in a comfortable surplus".

"This buoyant uptick and the following stability will create a positive environment for members to receive their returns," he continued.

But further volatility could be on the horizon, as Broadstone actuarial director, Sarah Elwine, pointed out that the start of April has seen significant market volatility following President Trump’s announcement of wide-ranging and higher-than-expected tariffs.

"These market movements are likely to have impacted funding levels and the time horizon of this turbulence also remains uncertain depending on negotiations and retaliations," she continued, highlighting this as demonstration of the benefits of a matching investment strategy for schemes.

"Whilst we wouldn’t expect that trustees would need to take any immediate actions, they may want to consider in due course whether employer covenant for their schemes has been affected by the introduction of tariffs, particularly given the increase in employer National Insurance and minimum wage changes also coming into effect this month," she said.

“Regular strategic monitoring will, of course, continue to be important in helping trustees to understand any impacts that do require action moving forward as the macro-economic landscape shifts.”

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