The total deficit of all the defined benefit (DB) pension funds in the UK stood at £210bn at the end of January, a decrease of £80bn compared with the previous month.
This is according to figures contained in PWC's Skyval index, which comprises data from 5,450 UK DB schemes, showed pension fund assets of almost £1.6trn and liabilities of £1.8trn.
The deficit figure was reached by assuming a risk-free rate of return (typically assumed to be the return on gilts) and setting this against the risk premium expected to be achieved as a reward for holding riskier assets.
According to Steven Dicker, PWC's chief actuary, "January has seen a significant improvement in the funding level of the UK pension schemes".
He said: "The reduction in the deficit is largely attributed to the adoption of a new dataset - as published in the 2018 [Pension Protection Fund] PPF Purple Book, which shows the number of DB schemes has reduced to 5,450.
"Positive asset performance over the month also helped to boost the funding level."
Published in December, the PPF Purple Book showed that almost two thirds (63 per cent) of DB schemes in the UK are running at a deficit.
According to the pensions lifeboat, these pension funds had a combined shortfall of £161.8bn.
PPF figures are calculated on a s179 basis, representing the value that would have to be paid to an insurance company to take on PPF levels of compensation.
The Purple Book data revealed the number of DB schemes open to new members had stayed steady at 12 per cent, but the number of PPF eligible pension funds had decreased from 5,588 schemes in 2017 to 5,450 in 2018.