The aggregate surplus of DB pension schemes climbed to £239bn at the end of January, according to the latest Pension Protection Fund (PPF) 7800 Index.

That’s up by more than £12.9bn from a surplus of £226.2bn at the end of December.

The funding ratio rose to 127% in January, up from 125.7% in November. Total scheme assets climbed 1.8% to £1,125.2bn during the month while total liabilities rose 0.8% to £886.1bn. 

The deficit of the schemes in deficit at the end of January was £24.61bn, £1.5bn lower than the £25.6bn recorded at the end of December.

Shalin Bhagwan, PPF chief actuary said: “This month’s PPF 7800 Index indicates that aggregate defined benefit (DB) scheme funding strengthened in January.

“There was significant intra-month volatility in gilts, as markets tried to weigh up the impact of tariffs on growth and inflation, although yields settled a few basis points lower than at the end of December.”

He said the volatility, coupled with strong growth in UK and global equities, drove higher increases in both equity and bond asset values relative to the increase in liabilities, with the net result being improved overall funding.

Sarah Elwine, actuarial director at consultancy Broadstone, said: “The potential for a global trade war is driving continued macroeconomic uncertainty. Trustees and scheme managers will need to be aware of how this uncertainty, alongside the possibility of a return to inflation and a rocky economic outlook, could impact funding levels.”

Alex Oakley, BPA transaction manager at Standard Life, said: “DB schemes continue to be in a stronger funding position when compared to previous years and there has been a focus on the government’s plans to unlock scheme surpluses to help boost people’s retirement savings, and drive economic growth.”

He pointed out that further details of the government’s proposals won’t be known until the spring. “In the meantime, trustees will continue to focus on ensuring all members’ pension obligations are met in full and on time.”