Final salary pension scheme funding positions improved by a margin of £400bn against long-term funding targets over the year to 20 December 2022, latest analysis from XPS Pensions Group finds.
The consultancy's DB:UK funding tracker found that, based on assets of £1,456bn and liabilities of £1,394bn, the aggregate funding level of UK pension schemes on a long-term target basis was 104% as of 20 December 2022, representing a funding increase of just under 20 percentage points during 2022.
It said gilt yield rises of around 3% resulted in a 35% reduction in the value of pension scheme liabilities, moving many UK schemes into a surplus position for the first time since aggregated records began despite falls in asset portfolios of around 20% during the year.
XPS Pensions Group actuary Tom Birkin said: "From February's shock Russian invasion of Ukraine to the gilt market meltdown in October, 2022 has been a year of seismic market movements and the upshot for pension schemes is that most find themselves in a much healthier position than they were at the start of the year."
