UK - The Pension Protection Fund's (PPF) second funding index showed aggregated pension fund surplus fell from £99bn (€146bn) at the end of June to £51bn only one month later, following market downturns in July.

However, the PPF points out the decreased surplus "is still a much improved position compared to July 2006 when schemes had a funding deficit of £31bn".

Aggregated assets of the pension funds have now reached £820bn, up 8.8% from last year but the deficit of underfunded pension schemes has worsened slightly over the last month and now stands at £45bn, up from £30bn. At the same time last year that deficit stood at £80bn.

The surpluses of well-funded schemes fell from £128bn to £96bn compared to £49bn last year but 5,394 schemes, or 70% of total defined benefit schemes in the sample, are still in deficit. This number is down from 6,238 in July 2006 but up from 4,750 at the end of June 2007.

Funding levels also improved over the last year as the FTSE All-Share rose 9.5% while higher bond yields cut aggregate liabilities by around 6.7%, the PPF pointed out.

However, these positive trends were offset slightly by a 3.4% fall of the FTSE All-Share over July 2007 and a 28 basis points fall in 10-year gilt yields.

"The fall in gilt yields in July 2007 led to an increase in liabilities of 4%, while slightly weaker equity markets caused assets to fall by roughly 2.4% from June 2007," the PPF calculated.

The UK pensions life-boat could not disclose figures illustrating the current market turbulences' effect on pension fund deficits.

Figures for the index are collected from the funds at the end of each month and released by the PPF in the second week of the following month.