The funding position of all UK private sector defined benefit (DB) pension schemes has increased over the year to 85 per cent from 83 per cent, according to Pension Capital Strategies' (PCS) monthly index.

At the end of March 2010, the total deficit of all UK private sector DB schemes stood at £189bn, an increase of £19bn on March 2009's figures. While assets increased, from £788bn to £1,034bn, liabilities also increased, from £948bn to £1,223bn.

FTSE100 companies are in £92bn of deficit, while FTSE350 companies recorded £105bn of deficit. Both have a funding level of 82 per cent, compared to 83 per cent for both at 31 March 2009.

Charles Cowling, managing director at PCS, said the huge recovery in the equity markets over the last year, with investment returns of almost 50 per cent in 12 months for UK equities, fast-growing liabilities have continued to increase deficits. "Despite this spectacular investment performance leading to some big asset gains, DB pension liabilities have grown even faster. As a result pension deficits have widened in the last 12 months, with the total pension deficit in FTSE100 companies now at £92bn. For all UK private sector pension schemes we estimate the total deficit figure now stands at £189bn. We are continuing to see companies take big steps to reduce pension risks and liabilities, but 2010 looks like it will not be an easy year for UK pension schemes."

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