The accounting deficit of defined benefit (DB) pension schemes for FTSE 350 companies increased from £57bn to £68bn in February, according to Mercer.

Mercer’s Pensions Risk Survey showed that liability values fell by £2bn to £914bn over the second month of the year, having stood at £916bn at the end of January.

Over the month the deficit had reached as high as £80bn as liability values fluctuated.

Asset values ended the month at £846bn, down £13bn on the £859bn recorded at the end of January.

Mercer partner, Charles Cowling, said: “Funding positions have declined this month as the impact of the coronavirus has sent shock waves through global markets. The outbreak is causing major disruption to international trade and supply chains, particularly in China, with the impact quickly spreading across Europe.

“The UK economy is expected to be hit imminently – giving the Chancellor of the Exchequer a tough first Budget in a few weeks.”

Cowling noted that the outbreak would “have an unwelcome impact on interest rates” and added that “trustees must be alert to the impact that coronavirus is having on the strength of many sponsoring employers”.

He also commented that the challenging conditions had been added to by the “highest reduction in mortality rates since 2011”, though he admitted it was “too early to tell whether this is a blip or a new trend”.

“With asset values falling and pension liabilities increasing, 2020 may be a difficult year for actuarial valuations and trustees would be well advised to start their planning early,” Cowling concluded.

The survey’s data relates to about 50 per cent of all UK pension scheme liabilities and analyses pension deficits calculated using the approach companies must adopt for their corporate accounts.

The data underlying the survey is refreshed as companies report their year-end accounts.

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