The total deficit of private sector UK defined benefit (DB) schemes increased by £100bn last month as rising inflation expectations pushed up liabilities, figures show.
According to Xafinity's corporate pension deficit tracker, the combined shortfall, estimated on an IAS19 basis, rose from £629bn to £729bn over August.
This was caused by a £74bn increase in liabilities driven by a worsening outlook for price inflation, and a £26bn fall in asset values, mainly due to poor stock market performance.
Xafinity corporate solutions director Hugh Creasy (pictured) said the deficit, which was equivalent to six months of the UK's gross domestic product, was too big to ignore.
He said: "Pension schemes have access to a range of options for managing price inflation risk. Those who have successfully hedged will be far more comfortable than those who have not.
"This is not a time for Schadenfreude though. Of course the deficit will wax and wane over time, but at this level it simply cannot be ignored. Today's news will make unwelcome reading for those yet to address the core financial risks in their pension schemes."
The latest figures from the Pensions Protection Fund (PPF) 7800 index make less grim reading though. The index measures the funding levels of schemes covered by the lifeboat fund on and s179 basis, which is approximately equivalent to the ability of a scheme to secure PPF level benefits from an insurer.
The aggregate shortfall of the 6,316 schemes on the index dropped slightly over the month from £115.7bn to £112.4bn, well below the deficit of £290.3bn reported in August 2012.
The funding level of schemes was almost unchanged over the month, but at 90.8% was significantly higher than this time last year when schemes were on average 78.4% funded on an s179 basis.
The main drivers for this month's figures were a 2% fall in assets, chiefly caused by falls on the FTSE and a 2% fall in liabilities, prompted by rising nominal gilt yields.
Over the month of August 2013, 15-year gilt yields rose by 23 basis points, 15 year index-linked gilt yields fell by 1 basis point and the FTSE All-Share Index fell by 2.8%t. Over the year to August 2013, 15-year gilt yields were up by 109 basis points and the FTSE All-Share Index rose by 14.7%.
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