The consultant said DB payments, which consisted of £4.7bn of deficit contributions and £3.4bn of DB pension accrual contributions, were lower as a result of improved funding positions.

It said this meant lower deficit contributions, which was just over half of the amount paid in the 2022 financial year.

Over the next three years, Barnett Waddingham said it expected a further 20% of these schemes to reach full funding.

The analysis also found around 33 of these companies could fund more than five years of DC contributions from their DB surpluses, and half of these could fund this for a decade or more.

Principal Lewys Curteis said the analysis represents a “decisive moment” for the industry, following several years where companies chose to pay DC contributions.

“To be clear, this is the consequence of a large fall in DB contributions, reflecting the material improvement in funding positions and the reduction in the cost of DB pension accrual, rather than a step up in the level of DC contributions being paid.

“Concerns about DC pension adequacy remain, with the level of contributions generally considered to be too low to support good member outcomes. The reduction in DB pension costs and the emergence of DB scheme surpluses could provide companies with the means to redress this imbalance without materially impacting the bottom line.”

Source: Professional Pensions