The UK’s largest defined benefit (DB) pension schemes now have a funding shortfall of more than £100 billion, according to new research.
Anew report from Aon Consulting has revealed that the 200 biggest DB pensions, including final salary schemes, have a collective deficit of £103 billion.
The figure represents a monthly increase of £15 billion after the deficit stood at £88 billion just four weeks ago.
This is due to the increased cost of providing pensions brought about by high levels of inflation, the group said.
Marcus Hurd, head of corporate solutions at Aon Consulting, said: "This is an unwelcome Christmas present for all of those with an interest in UK final salary pensions."
"Despite rising equity markets, the costs of providing those final salary pensions already promised has risen incommensurately. The aggregate deficit continues to rise and the pensions black hole is deepening.
"Companies and pension scheme trustees can no longer put off managing their risks."
Rising pension deficits in pension schemes could encourage workers to seek alternative methods of funding their retirement.
In turn, this could lead to a rise in the popularity of pension supplement programmes such as equity release schemes.
Such schemes allow pensioners to add to the income with money drawn against the value of their homes.
Posted by Tom Papworth
