We regularly check how much money is in the Scheme (our assets) and how much we might need in the future to pay everyone’s benefits (our liabilities). The Scheme’s actuary carries out a formal review every three years – the last one was based on our funding position on 30 September 2022.

In the years in between, we share a funding update to summarise the funding position of the Scheme. Here’s your update on the funding position of the Scheme on 30 September 2023.

Our funding level has risen to 111% from 109%

As you can see in the table, our assets were lower this year at £2.80 billion. Our liabilities are also lower at £2.52 billion so we have a surplus of £0.28 billion or, as a percentage, a funding level of 111%. This means we can be very confident of being able to continue paying members’ benefits, now and in the future.

Our investment strategy continues to work well

The Scheme’s investment strategy anticipates and balances movements in the assets and liabilities so that the funding position remains stable, and that’s worked well, even in a time of high interest rates and inflation.

The Scheme holds some of its assets in government bonds (loans to governments). A lot of pension schemes do this, as bonds are considered one of the most secure places to put money.

Last year, the value of our government bonds decreased but the value of some of our other assets increased. And our liabilities also decreased. Overall, our funding level improved.

Our second way of valuing the Scheme also shows a stronger position

We also estimate the cost of paying an insurer to take responsibility for all future pension payments to members. Legally we have to do this calculation. As of 30 September 2022, we calculated our assets were £0.11 billion short of what would be required.

Our 30 September 2023 valuation saw an improvement in funding on this basis, and we now estimate the Scheme has enough to pay an insurer to take over the liabilities. This calculation allows for insurers taking a very cautious view of the future and pricing accordingly. That can change over time as insurance companies change their prices.

How money comes in and out of the Scheme

The Scheme pays pensions and some lump sum benefits for all members and eligible dependants. The money in the Scheme comes from:

• contributions from members
• our investments, which are managed by the Trustee
• the Bank, which makes contributions for a small number of active members still building up their benefits and pays for the costs of running the Scheme.

We review the contribution arrangements during formal actuarial valuations. The next review is scheduled for 30 September 2025.

There have been no other changes since our last update

We’re legally required to inform you that, since our last update, the Scheme hasn’t paid any money to the Bank. The Pensions Regulator hasn’t modified the Scheme and hasn’t imposed any directions or a schedule of contributions on the Scheme.

Want to know more?

You’ll find more information about how the Scheme works in our website’s document area.

Read about your pension and climate change

Our Climate Change Report outlines how the Trustee monitors and manages climate-related risks and opportunities. Read it online or ask the Scheme administrator to send you a hard copy.

Plus you can download our:

• Statement of Investment Principles (SIP): how the Trustee invests the money you pay into the Scheme.
• Implementation Statement: how the Scheme follows and acts on the principles outlined in the SIP.

Here to help with your questions

If you’d like any more information, please contact Capita, the Scheme’s administrator.