New figures released from PwC’s Skyval Index show the deficit of defined benefit (DB) pension funds stood at GBP460 billion at the end of August 2017, a GBP40 billion increase since last month.
PwC’s Skyval Index, based on the Skyval platform used by pension funds, provides an aggregate health check of the UK’s circa 5,800 DB pension funds.
Steven Dicker (pictured), PwC’s chief actuary, says: “August saw a small decrease in long-term real interest rates (interest rates relative to inflation) as measured by Government bond yields, which has led to a GBP60bn increase in liabilities. In contrast, assets have only grown very modestly by GBP20 billion. Consequently, deficit has increased by GBP40 billion.
“The deficit calculation is based on a “gilts+” approach and is sensitive to even modest market movements. Compounding with the uncertain economic and political climate, the deficits calculated on this basis are likely to remain volatile.”