A wide-ranging survey of schemes' financial positions has revealed a significant rise in deficits - with the trend driven by the financial crisis.
Deficits at defined benefit workplace pension schemes worsened significantly over March, as the recession continued to take its toll on the markets.
The latest index from the Pension Protection Fund (PPF), measuring the financial position of 7,800 defined benefit (DB) schemes, revealed that net deficits hit £242 billion at the end of last month. In February, this aggregate deficit was £204.2 billion.
By way of contrast, deficits stood at just £22.9 billion at the end of March last year. However, in the intervening months the global financial markets have hit near-unprecedented turbulence, caused by the credit crunch and worldwide economic downturn.
In particular, stocks, to which many pension funds are heavily exposed, have lost much of their value due to the crisis. For example, London's FTSE 100 index is down by about 40 percent from its 2007 market peak.
DB schemes are also subject to financial pressures of their own. They generally oblige employers to contribute more towards the retirement savings of employees, due to the more stringent guarantees locked into the schemes' structure.
The PPF also said that the total deficit of schemes in deficit had worsened over March, going from £218 billion to £253.1 billion. Meanwhile, the total surplus of schemes in surplus reached £58.7 billion at the end of the month.
