UK – UK pension funds raised their purchases of longer dated UK government bonds to more than £10bn (€14.5bn) in the first quarter, official statistics show.

Data from the Office for National Statistics showed that self-administered pension funds bought £10.7bn of gilts with a maturity of 15 years or more in the period – up from £8.6bn in the first quarter of 2005.

Purchases of index-linked gilts were also up, at £10.6bn from £7.5bn, the ONS said. The total purchases of public sector securities were £38.1bn in the first quarter, up from £29.1bn a year before.

The acquisitions of corporate securities totalled £84.8bn compared to £64.9bn.

Overall net investment by pension funds, insurers and trusts was £20.6bn in the first quarter, £6.4bn lower than 2005’s fourth quarter.

The ONS said: “Net investment in short-term assets, British government sterling securities, overseas securities and other assets fell by £1.2bn, £0.2bn, £1.7bn and £2.3bn respectively, whilst net disinvestment in UK company securities of £0.4bn in the first quarter of 2006 compared with net investment of £0.5bn in the fourth quarter of 2005.

“The net investment figures, though lower than those for the fourth quarter, are still reasonably high compared with most recent observation particularly in relation to British government sterling securities and overseas securities.

The data also revealed that employer contributions to occupational schemes rose by 58% to £12.2bn.

Stephen Yeo, a senior consultant at Watson Wyatt, said: "The rise in employer contributions is happening earlier and to a greater extent than many people expected.

“Companies and trustees are anticipating the new structure for pension funding that will apply in future, and some companies are clearly deciding to pay in much more than the minimum that many commentators expected that they would.”