On the go: The aggregate deficit of the 5,422 defined benefit schemes in the Pension Protection Fund 7800 Index rose by £63.8bn in January.
This meant the shortfall increased to £74.7bn at the end of January from £10.9bn in December.
Section 179 liabilities, the level of assets needed to secure PPF-level benefits with an insurer, were 95.9 per cent in January, down from 99.4 per cent the previous month.
By the end of January the total assets in DB schemes were £1.73tn, while total liabilities stood at £1.81tn. There were 3,257 schemes in deficit and 2,165 schemes in surplus, the PPF stated.
According to Vishal Makkar, head of retirement consulting at Buck, “it appears that global markets are not immune to the coronavirus outbreak”.
He said: “The situation in China – the world’s second-largest economy and a key hub for global supply chains – has cast a shadow over the start of the year and has led to concerns about the potential impact on the global economy.
“Combined with this uncertainty, a sharp fall in gilt yields, which followed the post-election bump, has seen liabilities climb in January.”
Mr Makkar added that these wobbles showed that whatever position post-Brexit Britain decides to adopt on the world stage, it will remain closely tied to the ebbs and flows of the global economy.
“With increasing pressure being placed on the UK’s remaining [DB] schemes, trustees must keep on top of market fluctuations and the impact these may have on their schemes to ensure they are prepared for the uncertain road ahead.”
