UK pension scheme trustees are growing increasingly concerned about the financial strength of the companies sponsoring their funds, according to a survey.

PTL, an independent professional trustee company, found almost a quarter (24%) of the 152 trustees it surveyed saw employer covenant as one of the top three risks to their scheme.

This compared to 14% who ranked it in their top three concerns when asked just three months earlier.

Richard Butcher, managing director of PTL, said these fears could lead to more conservative valuations and lower allocations to risky assets as trustees seek to reduce the need to call on sponsor contributions to achieve full funding.

Darren Redmayne, CEO of covenant advisers Lincoln Pensions, added that the covenant part of risk assessment had “moved from the sidelines to the mainstream”.

“With interest rates rising and Brexit trading risks on the horizon, trustees are understandably asking how much risk their covenant can support and what they can do to make their pension scheme safer,” Redmayne said.

The PTL survey found that 11% of respondents ranked Brexit among their top three concerns, but this was lower than three months ago.

A separate survey of independent trustees by Hymans Robertson conducted earlier this year found that 43% felt long-term covenant risk was not integrated into strategic investment and funding decisions at UK pension schemes.

Hymans Robertson claimed the cost of covenant risk equated to a “£450bn reduction in the value of benefits”.

A 2016 CREATE-Research poll found that 68% of European pension plans expected increased funding deficits following the UK’s decision to leave the EU. In addition, 54% expected lower investment returns, increasing the pressure on employers to make good the shortfall.

The PTL survey also showed trustees were growing more concerned about potential new deficit funding rules. Butcher said this could reflect the expected content of a government white paper about defined benefit schemes, due out in the next few months.

Respondents were less concerned about longevity increases than in PTL’s previous survey, which Butcher said was “consistent” with recent mortality data indicating a slowing of life expectancy increases.