FTSE 350 pension deficits up by £30bn in May

The collective pension deficits of the UK’s FTSE 350 organisations have increased by £30 billion since the beginning of May, according to research by Towers Watson.

The report found that the total deficits are estimated to have gone from £62 billion at the end of April to £92 billion by 16 May.

John Ball, head of UK pensions at Tower Watson, said: “Although the stock market has taken a dive, almost three-quarters of the growth in deficits is due to liabilities getting bigger rather than assets losing value.

“Real interest rates are close to historic lows, especially now that inflation expectations have crept back up after softening earlier in May.

“Changing market conditions can present opportunities as well as threats. Employers and pension scheme trustees are increasingly thinking about how they might react to market movements to seize short-term opportunities and lock in future improvements in their funding position.”