DB deficits fell £7bn in September

DB deficits fell £7bn in September

Deficits in the pension schemes for the UK’s 350 largest listed companies fell by £7bn in September, according to Mercer.

The accounting deficit of these DB pension schemes fell from £85bn at the end of August to £78bn on 30 September 2015.

This was driven by a fall in market implied inflation reducing liabilities, the company said, which offset the fall in equity markets over the month.

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Ali Tayyebi, senior partner in Mercer’s retirement business, said: “It might come as some relief that accounting deficits have improved further during September despite the continued fall in equity markets.

“However recent events have highlighted the large number of complex interlinked global and UK specific variables which will continue to drive the health of UK pension schemes.”

As of 30 September 2015, liability values were £702bn, representing a fall of £9bn compared to £711bn at the same date in August.

Meanwhile asset values were £624bn compared to £626bn as at 31 August 2015.

Adviser view

Dan Farrow, a financial adviser with Essex-based SBN Wealth Management, said: “A deficit isn’t necessarily a bad thing. Many schemes went into deficit as gilt yields went down so there are many variables an adviser has to consider.”