Published: February 6, 2025
On February 6, 2025, the Barclays Bank UK Retirement Fund (UKRF) released its Annual Report for the year ending September 30, 2024, detailing investment strategy adjustments, liability-driven investment (LDI) expansion, and an increased focus on sustainable investment strategies. The pension scheme, which reported £25.1 billion in total assets, continues its shift towards risk reduction and ESG-aligned investments while preparing for sectionalisation in July 2025.
Throughout the year, UKRF strengthened its LDI framework, increasing its hedge ratio to 105% of liabilities as of September 2024, compared to 107% in September 2023. This strategy aims to stabilize funding levels against interest rate and inflation fluctuations, ensuring predictable cash flow and long-term sustainability. The LDI allocation primarily consists of index-linked bonds, cash, and high-quality credit assets, which collectively accounted for 86% of the total portfolio at the reporting date.
In 2024, the fund continued its strategic shift towards responsible investing, reaffirming its commitment to reducing greenhouse gas emissions by at least 50% by 2030. UKRF remains a signatory to the UK Stewardship Code, emphasizing governance standards and sustainable asset management. Additionally, the fund reviewed its responsible investment strategy to align with evolving regulatory and market expectations.
A key structural change set for July 2025 is the division of UKRF into two sections, following regulatory requirements for ring-fenced banks. The Barclays UK Section will include active members employed by Barclays Bank UK PLC, while the Barclays Bank Section will cover other active, deferred, and pensioner members. Both sections will be supported by collateral agreements, ensuring continued funding stability.
Looking ahead, UKRF is expected to continue de-risking its portfolio, maintaining its liability-matching focus while increasing exposure to sustainable credit, private market assets, and contractual cash flow investments. The Trustee’s investment review in 2024 set the foundation for further asset realignment, with an emphasis on long-term capital preservation and ESG-led investment opportunities.
Key Highlights
- In September 2024, UKRF’s hedge ratio reached 105%, ensuring stability against interest rate and inflation risks.
- By July 2025, UKRF will be sectionalised into two separate entities, in line with regulatory requirements for ring-fenced banks.
- Throughout 2024, the fund strengthened its commitment to sustainable investments, reaffirming its goal of a 50% reduction in greenhouse gas emissions by 2030.
- Investment strategy shifts in 2024 led to increased exposure to contractual cash flow assets and sustainable credit, supporting long-term de-risking efforts.
- The total fund value stood at £25.1 billion as of September 30, 2024, with high-return assets reduced to 14%, signaling continued emphasis on capital stability.
This report signals potential opportunities for asset managers specializing in ESG-compliant credit, inflation-linked assets, and sustainable fixed-income solutions, as UKRF refines its long-term investment strategy.
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