Not wanting to be outdone on reporting record deficit numbers the Pension Protection Fund (PPF) today released its funding position that revealed deficits had reached £408bn.
Growing by £24bn during July, the PPF deficits were at their highest ever level. But the aggregate proportion of assets to liabilities was not as low as in May 2012.
“Record lows in gilt yields continued to put pressure on pension scheme funding as the collective deficit of the UK’s private sector final-salary pension schemes," said a spokesperson for the PPF.
Critically, data was collected at the end of July before the Bank of England interest rate cut.
Other data has been released subsequent to the rate cut that indicates deficits have fallen further. It is likely that the PPF deficit will increase similarly, but the information is only released on a monthly basis.
“Total liabilities increased in cash terms but the ratio of assets to liabilities is still above the all-time low of 76.4% in May 2012.
"Members of defined benefit schemes have the protection the PPF offers in the event that their employer, or former employer, fails and the scheme cannot afford to pay their promised pension," said the spokesperson.
There were a total of 5,945 schemes in the PPF index – of which 5,025 were in deficit.