UK defined benefit (DB) pension scheme funding levels fell back in March 2026 amid heightened geopolitical and market volatility, although overall positions remain robust, according to Broadstone’s Sirius Index.

The index, which tracks how different investment strategies are progressing towards low dependency, showed that gains made earlier in the year were partially reversed during March as economic uncertainty intensified.

Broadstone recently rebased its Sirius Index for 2026 to reflect two contrasting strategies: a ‘growth-focused’ approach and a more conservative ‘matching-focused’ strategy, both starting the year at 90 per cent funded.

By the end of February, the ‘growth-focused’ strategy had improved to a funding level of 90.8 per cent, while the ‘matching-focused’ approach reached 90.3 per cent.

However, both experienced declines in March.

The ‘growth-focused’ scheme saw its funding level fall by 1.8 percentage points to 89.0 per cent, while the ‘matching-focused’ scheme dropped by 1.7 percentage points to 88.6 per cent.

Despite the sharper fall, the growth-focused approach remained marginally ahead by the end of the quarter.

Broadstone attributed the deterioration to “considerable economic and market volatility”, with geopolitical tensions, including conflict in the Middle East, contributing to the shift in market conditions.

However, Broadstone head of trustee services, Chris Rice, warned that the recent volatility should not obscure the broader strength of DB scheme funding positions.

“The last few years have been incredibly strong for the health of DB schemes, allowing many investment strategies to be derisked to protect scheme funding positions,” he stated.

He added that most schemes were unlikely to have experienced significant funding changes overall in the first quarter of 2026, as March’s deterioration largely offset improvements seen in January and February.

Despite this, Rice noted that the recent instability could still be a concern for trustees and sponsors, urging continued vigilance.

“The instability will no doubt cause concerns for trustees and sponsors; however, trustees should be regularly monitoring their liquidity, hedging levels and LDI resilience."

This article was first published on our sister website, Pensions Age.

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