A new industry report has revealed that pension scheme surpluses in the UK have started 2024 on a on a high, regardless of increases to their liability.
According to the recent report, the aggregate surplus for UK pension schemes currently stands at around £98 billion for long-term targets. A drop in long-term gilt yields (0.5%) has led to the rise in the value of their liabilities, with the impact of reducing funding levels for pension schemes. However, this upswing was offset partially by aggregate pension scheme assets increasing last year in December, led by growth returns and hedging strategies of schemes.
Statistics from December 2023 UK show that overall funding positions for pension schemes declined by approximately £28 billion against long-term targets for funding.
Despite this fall, and considering assets totalling £1,446 billion and liabilities of £1,348 billion, aggregate funding levels for UK pension schemes using a long-term target basis have remained exceptionally positive, and were recorded at 107% of the long-term value for liabilities by the close of 2023.
UK consumers seeking advice regarding the pros and cons of specific pension schemes often look to retirement planning specialists in Shropshire, Yorkshire and other counties for guidance. As holistic financial advisors, wealth managers assist their clients with a full spectrum of services, from estate and retirement planning to portfolio management and inheritance tax advice.
Financial experts have weighed in on the current surpluses, commenting that schemes must continually re-evaluate their investment strategies to ensure they are protected against any fall in gilt yields.