UK pension fund deficits see slight fall

Cash in hand
Image caption The big rise in estimated cost of providing pensions has put many funds under pressure

The collective deficit of the UK's private sector final-salary pension schemes fell slightly in October.

The Pension Protection Fund (PPF) said the deficit fell by £2bn to £227bn.

Schemes have been heavily in deficit since the summer of 2011, mainly due to the government's policy of quantitative easing.

This has cut the returns on investing in government bonds, and raised the estimated cost of paying for current and future pensions.

The deficit is the balance between the value of scheme assets - such as shares, bonds, property and cash - and the liabilities of schemes.

The liabilities are the estimated stock of assets needed now, to pay all current and future pensions.

The PPF explained that although the value of scheme assets had risen by 7% in the past year, their liabilities had risen even faster, by 10.7%.

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