The combined deficit of the UKs defined benefit pension schemes fell by almost one-third last month, according to figures published today by the Pension Protection Fund.
The latest data from the fund's PPF 7800 index reveals that the estimated aggregate deficit of the 6,316 schemes eligible for its protection was £185.5bn at the end of May. This was £70.1bn less than a month earlier, when its figures showed a £20bn increase in the deficit over the course of April.
Today's figures also show a year-on-year improvement from the £317bn deficit recorded at the end of May 2012.
Last month's narrowing of the aggregate deficit was reflected in an improved funding ratio, with schemes' assets as a percentage of their liabilities amounting to 85.9%, compared to 81.5% a month earlier.
In total, the aggregate assets of the schemes on the index were largely unchanged from the previous month, at £1.13 trillion. This reflected the combination of a rise in equity markets but a fall in bond prices, the PPF said.
However, the improvement in deficits was a result of scheme liabilities falling by 1.9%, from £1.387trn to £1.385trn. According to the fund, this was a result of higher nominal and index-linked gilt yields.
Today's figures show a continuing reduction in the proportion of schemes in the PPF 'universe' that are currently in deficit. At the end of May, 4,885, or 77.3%, of the schemes eligible for its support were in deficit, compared to 5,142 at the end of the previous month and 5,404 at the end of May 2012.
This was accompanied by a corresponding increase the number of schemes in surplus, which increased from 1,174 at the end of April to 1,431 at the end of May. A year earlier, just 912 schemes were in surplus.
The improvement in the PPF's data echoes the more positive picture reported by Mercer last week. According to the consultancy’s estimates for the UK's leading 350 listed companies, the FTSE 350, last month saw a £10bn reduction in the aggregate deficit, from £108bn to £98bn.