UK corporate pension deficits fell from £621bn in January 2013 to £551bn in February 2013, due to the slowing outlook for price inflation and the strength of equity markets in 2013 according to Xafinity.

The value of scheme assets remained the same at £1,143bn over the same period, but scheme liabilities fell from £1,764bn to £1,694bn.

Deficits however were £68bn higher this year compared to a year earlier according to Xafinity’s Corporate Pensions Scheme model, based on all UK DB pensions, using FRS17 and IAS19 accounting rules.

Xafinity director Hugh Creasy said: “The last month has provided a glimmer of hope for pension schemes as the outlook for inflation edged down, but this is only one step forward after two steps back last month when expectations for inflation shot up considerably. The overall picture is for deficits to continue north of £0.5trn.

“The buoyant stock market in 2013 may present some optimism, but the real concern will be around whether the economy can deliver real growth. In the meantime, extremely low base rates, and the prospect that these are destined to remain low for some time presents depressing news for pension scheme sponsors.”

Share Story: