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Pension fund deficit jumps to £228bn

The aggregate funding position of the UK’s defined benefit pension funds worsened to a deficit of £218.7bn at the end of February from a deficit of £190.6bn the previous month.

The total deficit of schemes in deficit in February is estimated to have increased £228.1bn from £204.1bn at the end of January. In February 2008, the aggregate deficit of all schemes in deficit stood at £109.6bn.

In February 2009, the total surpluses of schemes in surplus fell to £9.4bn from £13.5bn at the end of January 2009. In February 2008, the total surplus of all schemes in surplus stood at £42.6bn.

Liberal Democrat Shadow Work and Pensions Secretary Steve Webb says: “If the recession continues to deepen, the size of deficits in final salary schemes will keep growing. The PPF risks being overwhelmed by bankrupt schemes and may have to raise the levy on the remaining open schemes. This could prove to be the final nail in its coffin.

“The PPF already has a deficit of £500m. If the recession forces many more schemes to close, ministers will have to explain how the pensions lifeboat will be kept afloat.”

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