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The Actuary The magazine of the Institute & Faculty of Actuaries

UK pension deficits soar as market falls

Figures from the Aon Hewitt 350 Index show a jump in the collective final salary pensions accounting deficit of the UK's FTSE 350 companies from £27 billion to £66 billion at the close of business yesterday.

Marcus Hurd, principal consultant at Aon Hewitt said:
"Yesterday alone saw an increase of £10 billion in the FTSE 350 UK pensions deficit as measured by the Aon Hewitt 350 index. After steady improvements in 2011 so far, the total deficit has now fallen back to its October 2010 level, potentially wiping out any gains made over that period.

"Pension schemes are a long term investment, but short term volatility such as this is hard to ignore. These dramatic swings will focus the minds of finance directors and trustees even more on the importance of de-risking."