The total deficit of U.K. corporate pension funds increased 21.9% for the month and 96.9% for the year ended Aug. 31, to £459.4 billion ($601.3 billion), showed the Pension Protection Fund's 7800 index.
The PPF said the funded status of the 5,945 pension funds included in the index fell to 76.1%, down from 79.2% as of July 31 and 84.3% as of Aug. 31, 2015.
Total assets were £1.46 trillion as of Aug. 31, up 1.9% in the month. Compared with a year earlier, assets increased 16.2%. The PPF said it had revised its estimates of historic asset figures between April 2015 and July 2016. For that period, the PPF said in its latest 7800 index update that it believes “the estimate of scheme assets has been understated by approximately 2%, equivalent to £31.2 billion at July 2016.”
Assets were buoyed over the month by a 1.2% increase in the FTSE All-Share index, and 7.6% growth for the year.
However, asset growth was more than offset by a 6.1% increase in liabilities for the month, and a 28.8% increase for the year, to total £1.919 trillion as of Aug. 31. Conventional 15-year gilt yields fell 21 basis points and index-linked 15-year gilts fell 39 basis points for the month ended Aug. 31. For the year, 15-year gilt yields dropped 126 basis points and index-linked 15-year gilt yields fell 93 basis points. The PPF uses the annualized yield on the FTSE U.K. gilts 15-year fixed-interest index, and the index-linked equivalent, for its analysis.
The proportion of pension funds covered by the index that were in deficit as of Aug. 31 increased to 84.8%, up from 84.4% as of July 31, and from 78.7% as of Aug. 31, 2015.