The total deficit of private sector final-salary pension schemes has risen to another record sum, reflecting the “stark and painful” burdens on the system, according to those in the industry.
The deficit is estimated to have increased to reach £255.2bn at the end of December, surpassing the previous record of £222.1bn at the end of the previous month, figures from the Pension Protection Fund (PPF) showed.
The National Association of Pension Funds (NAPF) said low interest rates and Bank of England quantitative easing were behind the figures, but argued that pension funds could manage “market volatility” over the longer term.
The latest figure is the largest deficit since the records began in March 2003, but the PPF has cautioned that direct comparisons are affected by changes made to its calculations from April 2011, which had the effect of raising liabilities.
Joanne Segars, chief executive of the NAPF, said: “Pension funds are falling even further into the red, and businesses will be under more pressure to fill in the deficits. “It’s a stark and painful reflection of the burdens on final salary pensions in the private sector.”
The PPF’s monitoring of 6,533 schemes showed that the number in deficit at the end of December increased from the previous month to 5,473, representing 83.8 per cent of schemes overall.
Ms Segars blamed low interest rates, a faltering economy and the side-effects of quantitative easing for the rise in liabilities.