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DB deficits hold steady at £460bn

The combined deficit of the UK’s defined benefit pension schemes has fallen by 35 per cent in the last year, according to the latest figures from PwC, but has not improved in the most recent data.

The consultancy firm’s monthly Skyval Index, which tracks the levels of assets, liabilities and deficit of the UK’s 5,800 DB schemes, reports a stable deficit level of £460bn in September. The level was the same in the previous month.

But the comparable figure for September 2016 was £710bn, showing a significant reduction.

Total assets held in the schemes now stands at £1.52trn, with PwC posting a liability target of £1.98trn.

PwC chief actuary Steven Dicker says: “Long-term real interest rates as measured by government bond yields have increased over September, which has led to a £50bn reduction to liabilities since August month end. However, there was no impact on the deficit due to falling asset values over the month.

“The swing in the size of deficit from month to month is sensitive to small market movements, as demonstrated by the month to month volatility.”

The Skyval Index is based on the Skyval pensions platform used by trustees, sponsors and advisers to administer and manage funding, investment, analytics and benchmarking of their individual schemes.

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