PPF 7800 deficit shrinks in January

The deficit stood at £194.5bn at the end of December, last year.

However, scheme funding is worse than it was a year ago when there was a deficit of £48.8bn in January 2008.

The total deficit of schemes in deficit in January 2009 is estimated to have improved to £204.1bn from £209.6bn at the end of December, last year. In January 2008, the aggregate deficit of all schemes in deficit stood at £98.1bn.

In January, the total surpluses of schemes in surplus fell to £13.5bn from £15.1bn at the end of December. In January last year, the total surplus of all schemes in surplus stood at £49.3bn.

The number of schemes in deficit in January 2009 stood at 6924 - up from 6914 schemes in December 2008, and representing 90% of total DB schemes in the sample.

The number of schemes in surplus was lower in January 2009 at 812 (10% of schemes), compared to the number in December 2008 at 823. There were 1627 schemes in surplus in January 2008.

The PPF said there was a 3.7% decrease in assets due to falling UK and global equities in January.

Meanwhile, higher gilt yields in general led to a decrease in liabilities of approximately 5.5 per cent. The FTSE All Share Index decreased by 5.9% over the course of the month.

"Over the past year, the falling equity markets and bond yields have led to an overall worsening of the funding position. Lower bond yields resulted in a 6.5% increase in aggregate liabilities, while weaker equities have reduced assets by 14.5%," the report said.