What negative UK yields and interest rates would mean for LDI hedging

Historically, pension schemes may have held a belief that there was a cap to how much pension schemes liabilities could grow due to an assumption of positive interest rates. This assumption can no longer be relied upon.

We have now entered a new phase in the funding of pension schemes, in which trustees must decide how they manage their scheme strategy in a radically different interest rate environment.

In this report we explore the potential ramifications of a negative interest rate scenario for UK LDI.