The aggregate surplus of 5,050 defined benefit schemes in the PPF 7800 Index increased through December 2023, rising from a surplus of £425.5 billion at the end of November 2023 to £428.2 billion.
This means that the aggregate funding position has increased by £51.5 billion throughout 2023.
Broadstone senior actuarial director Jaime Norman says: “The PPF 7800 registered a small improvement in its aggregate surplus through December but the wider picture of vastly improved funding through the Defined Benefit scheme universe is clear.
“Rapidly rising gilt yields over the past two years have driven an aggregate surplus of over £400 billion at the end of 2023 combined to the deficit that was regularly recorded before 2021. It means for many schemes buy-out is now more affordable and achievable which has led to an intensely competitive de-risking market.
“Given congestion is likely to continue into 2024 and beyond, schemes within touching distance of buy-out should be focusing on their data to ensure they are in the best possible position to attract the attention of insurers. With rates now starting to fall, insurers will be laser-focused on choosing the most commercially attractive schemes to take on and preparation will be paramount.”
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