Pensions - Articles - Updated PwC Skyval Index pension deficit numbers


Raj Mody, global head of pensions at PwC, commented: "Today's interest rate announcement and this week's inflation news signal a period of relative stability. Pension funds seem to have anticipated the challenging economic conditions ahead for now.

 PwC's Skyval Index shows the total funding deficit has shown early signs of recovery this month, with the deficit standing at £630bn, down from £710bn around the end of August - this is the measure of cash financing pension fund trustees require from companies over time, across the UK's c6,000 defined benefit private sector plans.

 "Pension funds should revisit their approach to how they measure their own deficit, and question whether gilt yield linked measures are still entirely relevant for them. Getting the right measure matters. It's like driving a car from A to B with a faulty fuel gauge - you might stop too often because you think you need to fill up the tank, when actually you don't, or equally you might run out of fuel unexpectedly. Having the wrong measures can lead to the wrong strategy.”

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