The aggregate deficit of the 6,316 schemes in the PPF 7800 index has increased over the month to £236.6bn at the end of March from £201.5bn at the end of February as lower nominal and index-linked gilt yields continue to have significant effects on scheme performance.

Latest data has revealed that total asset values were £1121.5bn with total liabilities of the schemes valued at £1358.1bn, a 10.3 per cent increase over the year. At the end of March 2012, the deficit was £204.2bn for schemes with a overall funding ratio of 83.4 per cent.

Funding ratios decreased from 84.6 per cent to 82.6 per cent over March 2013 and the overall funding ratio in 2012 was 83.4 per cent.

Over the month, 15 year gilt yields fell by 20 basis points, 15 year index-linked gilt yields fell by 17 basis points and the FTSE All-Share Index rose by 0.9 per cent. Over the year to March 2013, 15-year gilt yields were down by 39 basis points.

Towers Watson senior consultant Adam Boyes said: “For a significant minority of employers, this is the worst possible time to deficits to look so swollen. The question now is what to do about it.

“Even where employers can afford to pay a lot more than they had been doing – and many cannot-schemes may have to anticipate remaining underfunded for longer than previously planned. For some employers who closed their final salary schemes to new entrants a long time ago, this will be another reason to consider stopping existing members from building up further benefits as well. The more it is going to cost them to finance pensions promised in the past, the less money they may have available to pay for new final salary entitlements.”

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