29 September 2022
Following the Government's budget announcements on 23 September 2022, we have seen extreme volatility in financial markets, with the cost of government borrowing rising (and the value of government bonds, also called gilts, falling), strong reactions in UK stock markets, and sterling falling to record lows.
The International Monetary Fund has taken the unprecedented step of writing to the chancellor expressing concern, and the Bank of England has stepped in with temporary quantitative easing measures to stabilise the situation. There have also been news stories about pension funds being unable to sell their gilts in order to make payments.
We are providing an update to give assurance to all fund members of the financial stability of Wiltshire Pension Fund.
The Wiltshire Pension Fund maintains holdings in ample cash and liquid investments and there will be no problems in paying pensions. The Fund does hold UK gilts, which represents c10% of the total fund value, and this forms just one part of a well-diversified investment portfolio. The fund does not use a liability driven investment strategy (LDI) which has been highlighted as a cause of problems for many UK pension funds.
Fund officers are actively monitoring the situation to understand any implications for the fund.
Visit the Investments section of our website to read more about how we manage our investments.
Investment Pages by Wiltshire Pension Fund