John Lewis’s defined benefit (DB) pension deficit increased by £567.6m year-on-year to £623.8m, as at 25 July 2020, its half year financial results report has revealed.

Over the half year from 25 January 2020, the deficit had risen by £206.4m from £417.4m.

Movements in the net DB liability over the six months included £206.3m in losses recognised in equity, £64.1m in interest on pension liabilities and £23m in operating costs.

Pension deficit recovery contributions totalled £2.5m in the first half of 2020, compared to £12m in the first six months of 2019.

On 1 April 2020, the DB section of the pension scheme closed to future accrual.

The pension scheme is operated by John Lewis Partnership Trust for Pensions. The scheme includes a DB section, with all contributions to the DB section funded by the partnership.

The scheme also includes a defined contribution (DC) section. Contributions to the DC section of the scheme are made by both partners and the partnership.

The next triennial actuarial valuation of the scheme will take place as at 31 March 2022.

Commenting on the results, Hargreaves Lansdown senior investment and markets analyst, Susannah Streeter, said: “The pandemic has brought about a revolutionary shift in shopping habits as consumers switch to online stores and opt for click and collect services from the high street.

“For retail giants like John Lewis who have dominated the sector with mega footprints across shopping centres and retail parks, pivoting quickly to keep up has been a huge challenge.

“The scale of the mountain to climb has become clear with these results which showed the partnership slumped to a pre-tax loss of £635m for the six months up to July 25 after being forced to write down the value of its stores by £470m.”

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