UK Defined Benefit Pension Deficits Worsen

Markets driven by Covid and then the US elections have played a big part, yet even with that, some pension schemes weathered it pretty well. Being mindful of yet further restrictions and lockdowns across the UK, we can expect a high possibility of continued markets volatility as more and more DB schemes get added to the list.

This highlights some key points of the up to date figures of the UK DB Pension Deficits, and the risk of companies collapsing and falling into the PPF, which is also underfunded.

• The combined deficit of UK DB Schemes in the PPF is now at £168.2bn
  
  
• The PPF Funding level is now at 91.2% (this means the PPF “lifeboat” can only afford to pay 91.2% of so-called “guaranteed” “protected” benefits)
  
  
• The number of schemes in deficit rose to 3617, which represents 67% of the 5422 DB schemes
  
  
• “Government initiatives have helped to prevent a surge of unemployment and company collapses; but the Treasury have signaled that these will not be around forever, and the threatof company collapses in particular, should be a major concern for poorly funded schemes”