The aggregate deficit of defined benefit (DB) schemes within the Pension Protection Fund (PPF) 7800 index increased by £48.9bn over January 2014.

In December 2013, the deficit fell from £59.7bn to £27.6bn, but it rose to £76.5bn at the end of January due to lower nominal and index-linked gilt yields.

Despite the increased deficit, the figures are an improvement from the previous year, when a deficit of £182.6bn was recorded at the end of January 2013.

Over the month, scheme assets remained largely unchanged at £1,130.4bn from £1,133.0bn in December 2013, however over the year there was an increase of 4.4%.

Total scheme liabilities increased by 4% over the month to £1,206.8bn, but decreased by 4.6% over the year.

As a result, the funding ratio fell from 97.6% in December to 93.7% at the end of January.

Over January 2014, 15-year gilt yields fell by 26 basis points, 15-year index-linked gilt yields fell by 5 basis points and the FTSE All-Share Index fell by 3.1%.

Out of the 6,150 schemes within the PPF 7800 index, 4,108 schemes were in deficit in comparison to the 3,701 in December 2013. The number of schemes in surplus decreased from 2,449 in December to 2,042 in January.

First published 11.02.2014

monique_simpson@wilmington.co.uk