The total value of UK-funded occupational pension schemes has fallen by £232 billion since 2019, new data shows.
The dramatic slide comes despite the fact that overall membership grew by 1.6 million people in the same period.
The fall reveals the full impact of the 2022 Truss Mini-budget, from which UK defined benefit contributions have yet to recover.
Analysis by the deVere Group of ONS data shows a peak-to-trough of minus £757 bn, or −37.4 per cent.
The market-value measure (assets minus non-pension liabilities and net derivatives) tells the same story, peaking at £1,821 bn in Q4 2021 before reaching a nadir in Q1 2025, a fall of £722 bn, or 39.6 per cent.
Why UK Pension Funds Have Fallen
Funded Occupational Schemes appear to have been materially impacted by the 2022 Mini-budget, because so many DB schemes were invested in gilts.
The budget, which was seen as fiscally irresponsible by the gilt markets, caused investors’ yields to spike, forcing pension funds to sell more to repay their increasingly costly loans.
In a memo to its members, the Nestle UK pension fund admitted it “had to sell gilts in order to meet collateral calls from financial institutions,” causing “the value of the Fund’s assets to fall.”
That forced selling is widespread and has run so deep that DB funds have yet to recover. In-depth analysis by the deVere Group of the speed and scale of the decline, with index-linked gilt holdings collapsing from £386 bn in Q4 2021 to £233 bn in a single year, a £153 bn evaporation as long-end yields spiked.
At the same time, repos (the leverage layer of LDI) peaked at £210 bn in Q2 2022 and were forced down to £148 bn by Q4 2022, a £62 bn deleveraging in one quarter, the visible fingerprint of the Bank of England’s 28 September 2022 emergency intervention and its aftermath.
The Outlook for UK Pension Funds
The latest data also confirms a continuing shift away from defined benefit schemes, with defined contribution scheme members now numbering 17 for every DB member.
Private DB is in formal run-off mode. Active members are down by 24 per cent (from 0.91 m to 0.69 m), and Deferred members are down 31 per cent. Only pensioners are growing.
There are now 7.9 pensioners per active member in private DB schemes, up from 5.4 in 2019. By membership, the scheme set is now 54 per cent pensioners, 39% deferred, and just 7 per cent active.
The funded part of the public sector, essentially the Local Government Pension Scheme, has now overtaken DC in asset terms (£575 bn vs £380 bn). It is the only large UK-funded DB pool that is still growing in both members and assets.
However, while headline DB assets shrank, insurance policies held inside private DB schemes nearly doubled. Trustees have been transferring liabilities to insurers (buy-ins, then full buy-outs) at an unprecedented pace, helped by the fact that higher gilt yields improved funding levels in 2022–2024 even as headline asset values collapsed.
Sponsor “top-up” cash flows into private DB schemes have collapsed because most schemes no longer need them — many are now in surplus on a buy-out basis. This is a profound shift in corporate balance sheets across the FTSE 350.
We can also see that pension funds are increasingly concentrated across the Atlantic, with allocations to the US increasing dramatically over the past five years. The Herfindahl-Hirschman Index of overseas equity allocations has risen from 2,536 (Q4 2019) to 3,108 (Q3 2025).
The concentration is such that almost all growth in overseas UK equity holdings in the period, worth some £20 bn, can be accounted for by allocations to the US. In the same period, UK pension money fled Russia, following the invasion of Ukraine, with funds falling from a pre-war level of £477 million to just £2 million today, and significant funds have been pulled from China, with funds down 37 per cent since 2021.
