The deficit in U.K. defined benefit plans increased almost 10% to £900 billion ($1.3 trillion) in one day on the back of the country's decision to leave the European Union as the pound sterling plummeted vs. the dollar and markets fell, said Hymans Robertson.
The consulting firm said liabilities of these funds have increased to £2.2 trillion.
The U.K. voted June 23 to leave the EU, with 52% voting to leave.
“Whether you agreed with the decision of the U.K. electorate or not, it is hard to underestimate how momentous this is,” said Andy Green, chief investment officer at Hymans Robertson, in a statement accompanying the data. “The ramifications are likely to be felt not just in the U.K., but in Europe and indeed the rest of the world.”
Mr. Green added that what is certain is that the decision to leave the EU has led to “a huge amount of political and economic uncertainty. But risk never comes alone. It is always accompanied by opportunity. It is important that plans include scenarios in which those opportunities are grasped.”
He also warned there is the potential for a domino effect, were similar EU referendum votes to be held in countries across Europe. That would “place pressure on the makeup of the euro,” he said.
