Pension Protection Fund deficit surges 230%

The total deficit of schemes in the Pension Protection Fund (PPF) 7800 index soared 230% year-on-year (YOY), according to the latest data.

The aggregate deficit of the 6,057 schemes was £49.9bn in October 2013m, but grew to £164.9bn at the end of last month. Additionally, there was a 17% increase in the number of schemes in deficit over the same period, up from 3,895 to 4,570. The funding shortfall rose 70% to £213bn.

The data also showed that the proportion of schemes in surplus fell 30% to 1,487. This corresponded with a 36% decrease in the total surplus from £75.7bn to £48.1bn over the 12-month period. The figures were less concerning month-on-month
though, with assets from September rising 1.1% being outpaced by an increase of 2.5% in liabilities.

Last month's update showed a five percentage point decline in the funding ratio of schemes from 92.9% to 87.8% YOY.

However, September's funding ratio was revised upwards to 89.2% to reflect a new dataset based on information in The Purple Book, published last month. October's funding ratio was 87.9%.