A monthly update from the Pension Protection Fund (PPF) has shown deficits in its universe of 6,057 defined benefit scheme spike up back towards £300bn (€416bn).

The PPF 7800 Index at the end of March showed DB deficits at £292.6bn, calculated on their ability to provide PPF-level benefits.

This was up 18% from £248.7bn at the end of February, and over 600% higher than a year earlier.

However, deficit levels are lower than the end of January when it reached a record £367.5bn.

The rise in March was fuelled by a 4% rise in liabilities to £1.58trn but slightly offset with 1.5% rise in assets to £1.28trn.

Of the 6,057 schemes in the universe, 82% are now in deficit, with average funding levels across the sector at 81.4%, a drop of 2.2 percentage points.

Falling gilt yields were once again the cause of the liability increase with 15-year Gilt yield falling 18 basis points over March, with the a 2.2% rise in the FTSE All-Share aiding asset increases.

Last year was a tumultuous one for UK DB funds with the universe starting in surplus before steadily falling to record lows by January 2015.

In other news, both main parties fighting the UK general election have looked towards cutting pensions tax relief as a way to fund election pledges.

However, The Institute of Fiscal Studies (IFS), an independent think tank, has warned the parties of continuous meddling, criticising both election pledges.

The currently governing Conservative Party has pledged to reduce tax relief on pension contributions above earnings between £150,000 to £210,000, meaning the annual allowance of £40,000 slowly reduces as earnings increases after the first cliff point.

It intends to do this to fund a tax-relief threshold for inheritance tax.

The opposition Labour Party pledged to reduce the rate of tax relief on those earning over £150,000, similar to its 2009 proposal the IFS said, which created a cliff edge impact on payable tax.

The party wants to fund a reduction in university tuition fees with the policy.

The IFS said the policies were as complex as one another, but warned they risked rushing towards chaos in pensions taxation.

“Both Conservative and Labour plans will have substantial incentive and behavioural effects for those with incomes in the £150,000 to £200,000 range – potentially bigger effects than [changes to] the income tax rate itself,” the IFS said.

“There is a danger that the tax proposals being put forward through this general election campaign will have a long term malign influence on our tax system and economic welfare.”

Labour also pledged support for the Budget freedoms which came into effect last week, allowing defined contribution (DC) savers over 55 to spend their pension pots as they will.

However, its manifesto said it would reform pensions markets to ensure savers were put first and ensure proper guidance was provided to those enacting pensions freedoms.