UK gilt market

Jonathan Stapleton discusses re-risking

Bond heavyweights have begun shorting UK gilts ahead of an expected correction, warning yields have reached ‘extreme' lows.

Defined benefit scheme funding levels have plunged by one-fifth over the past year dragging a further 83 previously fully funded schemes into deficit, data shows.

Savers face a smaller retirement income despite positive fund performance, Aon Hewitt research reveals.

Gilt yields hit a new record low yesterday as investors continued to buy up UK debt amid concerns the European Union has not done enough to avert a financial meltdown.

Defined benefit funding ratios continued to fall last month with deficits rising by almost £65bn, according to the PPF 7800 Index.

Mercer has called on The Pensions Regulator to clarify trustees' role in an economic environment where low gilt yields are distorting funding levels.

Pension funds would suffer from liabilities increasing further if the Bank of England buys gilts in another round of quantitative easing, Pension Corporation says.

Any gains schemes might have made following the switch to the Consumer Prices Index have been wiped out by falling interest rates, JLT Benefit Solutions believes.