Pension fund assets in the UK have hit an all-time high of £1.7trn in 2012, having grown 5 per cent during the year and more than doubling in the past decade, Towers Watson’s Global Pension Assets Study has found.

Pension assets in the 13 major markets, which make up more than 85 per cent of global pension assets, grew by 9 per cent and reached a record high of $30trn.

The UK accounts for 9 per cent of global pension assets, the study said, and it is therefore the third largest pension market in the world. Ten year figures show that the country has grown its pension assets as a portion of GDP by 42 per cent to reach 112 per cent of GDP.

On the investment side, the study showed that equity allocations by UK pension funds have fallen from 61 per cent in 2002 to 45 per cent in 2012, while exposure to alternative assets increased from 3 per cent to 17 per cent.

Towers Watson EMEA head of investment Chris Ford said: “Given the extreme economic and market volatility we have experienced during the past five years it was a relief for many pension funds to finish the year in better shape than when it started, for a change. While volatile markets are expected to continue for the foreseeable future, pension funds are now generally better equipped to deal with them.

“During the past five years we have seen many funds deal with their governance shortfalls and as a result a growing number of funds have either more qualified people working on their investments or they have outsourced the running of all or part of their portfolios to third parties. In addition, pension funds are implementing investment strategies that are more flexible and adaptable and which contain a broader view of risk so as to make greater allowance for extreme events.”

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