On the go: UK pension schemes have beaten the January blues, with their total deficit down by £8.8bn, according to recent Pension Protection Fund figures.
The deficit of the 5,450 pension schemes in the PPF 7800 Index fell to £23.1bn at the end of January 2019, from a deficit of £31.9bn at the end of December 2018.
The funding level also improved, increasing from 98 per cent at the end of December 2018 to 98.6 per cent.
Total assets were £1,603bn and total liabilities were £1,626.1bn, with 3,190 schemes in deficit and 2,260 schemes in surplus.
Commenting on the figures, Andy Tunningley, head of UK strategic clients at BlackRock, said: “UK pension schemes have beaten the January blues with funding levels ending the month at 98.6 per cent, up 0.6 per cent from the end of 2018. Asset values increased as a result of the best January for stocks in 30 years, boosted by signs that the Federal Reserve were going to be more patient with regards to rate rises and a softening in rhetoric on China from the Trump administration.”
He added that despite bond yields falling once again (10-year gilts ended the month at their lowest month-end level since November 2017), the overall direction was positive for pension scheme funding.
“In fixed income more broadly, global investment-grade corporates have recovered 35 per cent of previous widening in spread, global high yield over 50 per cent and emerging market debt in hard currency around 72 per cent,” Mr Tunningley said.
