The Pension Protection Fund (PPF) has revealed that its deficit has risen to £1.2bn but that its protection framework has remained resilient through the recession, in its latest annual accounts report for 2008/09.

The UK pensions lifeboat fund, which has seen a dramatic increase in pension funds entering its books, has reported that its deficit has grown from £517m as at 31 March 2008 to £1.2bn as at 31 March 2009. The report, published on 5 November, also made public a funding ratio of 88 per cent, which has decreased from the 91 per cent recorded last year.

According to Lawrence Churchill, chairman of the PPF, the economic downturn has underlined how essential PPF protection has been. "None of us would want to go back to an era where people lost their pension as well as their jobs.

"We expect that this year's claims would be larger than our levy so we were not surprised by these figures which have been impacted by market volatility and low interest rates.

Churchill added that the liquidity of the PPF remains robust and that they have kept the levy unchanged in real terms for next year.

Neil Carberry, head of pensions policy at the Confederation of British Industry (CBI), added that the figures released in the PPF's Annual Report illustrate that "the PPF has suffered in the recession in line with other schemes, but has performed well on investment return in a difficult year".

"Businesses are worried about the future cost of the fund," Carberry continued, "and will be particularly pleased to see data in the report suggesting real-term rises in the total levy paid by business to fund the PPF may be unnecessary."

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