Back in red for pension schemes

The nearly 7,400 defined benefit schemes, including final salary pensions, collectively faced a funding shortfall of 2.2bn at the end of April, according to pensions safety net the Pension Protection Fund.

The return to a deficit comes after the schemes enjoyed their first surplus since June 2008 in March of 300m.

But despite dropping back into negative territory, their funding position was still far better than it was in April 2009, when they faced a shortfall of 188.5bn.

Much of the improvement seen during the past year has been due to new accounting assumptions which were introduced in October last year, which reduced pension scheme liabilities by around 70bn.

But rising stock markets have also boosted the value of schemes' assets by 16.4 per cent.

The change in the funding position seen during April was driven by a combination of a fall in the value of schemes' assets, which dipped by 0.2 per cent due to equity market falls, and a slight rise in liabilities.

Overall, 69 per cent of defined benefit pension schemes faced a deficit at the end of April.