Corporate pension deficits in the UK stand at just under £700bn, according to Xafinity. Its corporate benefits pensions tracker shows deficits increased by £84bn in the last month to reach £695bn at the end of April.

The rise in deficits over the last month reflects expectations of a slower increase in bond yields than previously estimated. The change added £100bn to the liabilities, calculated according to the FRS17 standard.

Xafinity Corporate Solutions director Hugh Creasy, said: “The crumb of comfort is that this has come after 31 March. The often criticised ‘snapshot view’ has come to save the majority of businesses who report as at 31 March. The gradual progression of deficits during the last few years, however, will mean that few will feel able to ignore this continuing increase in deficits as simply some sort of blip.”

Finance directors must consider how likely upward expectations for borrowing costs were for the remainder of the financial year, Creasy said. He added that inflation continued to be a concern.

“While this has been relatively quiet during 2013, it would now just take an increase of little more than 0.25 per cent in the outlook for inflation to send reported pension costs past the £2trn mark.”

According to Xafinity’s calculations, liabilities in April increased to £1,887bn, from £1,787bn in March and £1,568bn in April last year. Assets increased to £1,192bn, from £1,176bn a month before and £1,061bn last year.

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