Private sector defined benefit (DB) pension schemes carried a collective deficit of £0.8 trillion in 2015, around double the shortfall compared with roughly a decade ago, according to research out today.
The study by JLT Employee Benefits discovered that DB schemes had £1.3 trillion in assets in 2015, compared with £0.65 trillion in 2006, but the schemes also had liabilities of £2.1 trillion in 2015, compared with £1.1 trillion in 2006.
The deficit has widened despite employers pouring in contributions worth £160bn during that time period.
"Our analysis highlights that DB pension schemes across the UK should take a serious look at how they plan to close deficits," said Murray Wright, actuary and consultant at JLT Employee Benefits. "Pension schemes cannot continue to follow the same strategies that have been used for the last 10 years."
JLT also warned that continued low interest rates combined with improving life expectancy was placing additional pressure on DB schemes. For example, longevity at age 65 increased by around two years between 2006 and 2015, resulting in an increase to pension scheme liabilities of £135bn.
Wright added: "Trustees and employers should ensure they are using all of the levers available to them to stop pension shortfalls from spiralling out of control."