UK - UK defined benefit pension schemes fell in value and saw their liabilities increase during the first month of this year, on the back of a drop in equity market and bond yields.

Data supplied in the Pension Protection Fund (PPF) 7800 index revealed the aggregate funding position of UK DB schemes fell again by the end of January to a deficit of £51.9bn (€58.95bn) compared with a deficit of £32.6bn at the end of December 2009.

The number of schemes in deficit has risen again to 5,528 of the 7,400 schemes studies, giving a total deficit of schemes in deficit of £102.9bn, compared with £90.7bn in December. In contrast, there were 1,841 schemes in surplus, holding a collective surplus of £50.9bn.

At the same time, however, scheme liabilities increased in January 2010, after the 15-yaer gilt yields fell a fraction and UK and global equities lost 1.8% in value.

Over the year to January 2010, lower bond yields have increased liabilities by 2.3% yet stronger equity returns also increased returns in the sector by 13.5%, said the PPF.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com