Defined benefit (DB) pension schemes finished 2025 with an aggregate surplus of £259.7bn, according to the latest data from the Pension Protection Fund’s (PPF) 7800 index.
The 4,838 schemes in the index had combined assets of £1,120bn and total liabilities of almost £861bn, giving an overall funding ratio of 130.2%.
It comes after a volatile year for some financial markets after the US administration introduced trade tariffs on other countries and geopolitical tensions continued to affect the Middle East, Ukraine, and other areas.
The PPF 7800 index reflects the section 179 funding level of eligible schemes – the level at which pension schemes can pay benefits at least equivalent to PPF compensation.
Vishal Makkar, managing director for UK wealth consulting at Gallagher, said the data was “a testament to the UK’s DB pension schemes and their ongoing resilience”.
“It continues the upbeat trend seen throughout 2025, where schemes maintained a strong financial footing despite ongoing market volatility and wider fiscal uncertainty,” Makkar added.
“This strong foundation will encourage trustees and sponsors to progress their long-term strategies, whether that means further derisking, running on, or progressing towards buyout where appropriate.”
With significant pension policy changes expected this year through the introduction of the Pension Schemes Bill, Makkar said trustees would need to be able to respond to changes “while keeping long-term member outcomes and scheme objectives front and centre”.
Shalin Bhagwan, the PPF’s chief actuary, said there had been a “clear strengthening of aggregate funding” over the course of 2025.
A busy 2025 – with more to come
The strong funding position is encouraging news for schemes seeking to run on and potentially release surplus capital. The Pension Schemes Bill contains measures that will allow trustee boards to release surplus for payments to members and sponsoring employers, subject to guardrails and minimum funding requirements.
The PPF itself has also experienced significant changes over the past 12 months. It has charged a zero levy for most DB schemes for the first time, and legislative changes contained in the Pension Schemes Bill will allow this to be maintained as long as the lifeboat fund’s own strong funding position remains.
In the Budget at the end of November, chancellor Rachel Reeves announced plans to allow the PPF to pay indexation to those of its members with benefits accrued before April 1997.
