Companies need an extra £10bn every year for the next decade to fund new pension deficits built up in 2016, according to Pricewaterhouse Coopers Skyval index.
According to PwC, the European Union referendum result had the biggest short-term impact on pension deficits in 2016, with a one-day £80bn increase.
Pension funds experienced strong asset performance in the year, but not enough to make up for lower expected future asset returns, the firm said.
PwC’s Skyval index, which is based on the Skyval platform used by pension funds, provides an aggregate health check of the UK’s roughly 6,000 defined benefit pension funds.
The funding measure is the approach used by pension fund trustees to determine the amount of company cash contributions.
Figures released today (6 January) from PwC's Skyval index show the deficit of defined benefit pension funds stood at £560bn at the end of 2016, £90bn more than at the start of 2016.
According to PwC, if companies tried to repair the additional deficits which arose during 2016 within 10 years, this would cost an extra £10bn per year.
Between 2000 and 2015, if the money that was used to plug private defined benefit pension deficits had instead been redirected towards wages, average salaries would be £1,473 higher, according to think tank the International Longevity Centre.