According to PwC’s Skyval Index
New figures released today from PwC’s Skyval Index show the deficit of defined benefit (DB) pension funds stood at £460bn at the end of August 2017, a £40bn 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 c.5,800 DB pension funds. The current Skyval Index figures are:
|Assets||Liability target||Deficit||Deficit change since last month|
|Funding measure (current)||£1,570bn||£2,030bn||£460bn||£40bn increase|
Steven Dicker, PwC’s chief actuary, said: “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 £60bn increase in liabilities. In contrast, assets have only grown very modestly by £20bn. Consequently, deficit has increased by £40bn.
“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.”