Bank Rate Cut: 3.75%

What This Means for Pension Schemes

Long-dated nominal gilt yields closed at 3.75% on 18 December 2025, down 0.25% on the week.

Falling gilt yields increase the present value of pension liabilities, putting pressure on funding levels. Schemes without adequate LDI hedging will see their funding position deteriorate. Trustees should review their hedging ratios and consider whether this represents a buying opportunity or a trend to position against.