Nervous UK pension schemes want liquidity fixes – it’ll cost them

Asset managers are crafting new ways for schemes to raise cash in a crisis

It’s a Faustian bargain for UK defined benefit pension schemes – how to protect themselves against a liquidity squeeze like the one experienced in the 2022 gilt crisis.

While pension schemes are now far better placed to weather market swings than they were during the crisis, market participants fear the squeeze may not be a one-off. And some of the proposed measures to help see them through a similar storm have significant trade-offs – such as narrow availability or complexity of application – le