The Pension Protection Fund (PPF) has revealed that the deficit of defined benefit pension schemes has decreased in January.

In the latest PPF 7800 Index, the PPF said that the aggregate deficit decreased to £211.2bn at the end of January 2013, from a deficit of £244.7bn at the end of December, increasing the funding ratio to 83.7%.

The PPF said the position has improved on the previous year, when a deficit of £265.4bn was recorded at the end of January 2012.

Within the index, total scheme assets were £1084.3bn at the end of January 2013. Scheme assets rose by 1.8% over the month and over the year there was an increase of 6.0%.

Total liabilities were £1295.5bn at the end of January 2013, a decrease of 1.1% over the month and an increase of 0.5% over the year.

Assets rose by 1.8% over the month due to "significant" increases with equity markets and a 1.1% drop in the value of liabilities in the same period, mainly reflected higher nominal gilt yields.

There were 5,031 schemes in deficit at the end of January 2013 representing 79.7% of the total 6,316 defined benefit schemes in comparison to the end of January 2012, where 5,244 schemes were in deficit.

The number of schemes in surplus increased to 1,285 schemes at the end of January 2013 from 1,143 at the end of December 2012. There were 1,072 schemes in surplus at the end of January 2012.

First published 13.02.2013

monique_simpson@wilmington.co.uk