UK - UK defined benefit pension funds saw their aggregate funding position worsen last week to more than triple the deficit recorded in August, according to figures announced by the Pension Protection Fund.

Official data delivered through the PPF's monthly 7800 index this week showed the collective funding deficit of the 7800 pension funds tracked worsened between August and September 2008 from £36.7bn (€47.4bn) to £80.3bn.

However, conditions appear to have quickly deteriorated for pension funds within the space of just a week, as Martin Clarke, director of financial risk at the PPF, told delegates at the National Association of Pension Funds' (NAPF) annual conference last week the wild turbulence of the markets - on the back of the banking crisis - increased the aggregate funding position deficit to £125bn by last week - three times higher than the deficit recorded in August.

Data presented this week by the PPF revealed the total deficit of schemes in deficit increased from £91.6bn in August 2008 to £113.5bn by the end of September, as the number of schemes in deficit increased from to 6,435 and accounted for 82% of the DB schemes in the PPF's sample.

At the same time, the total surplus of schemes in surplus also reduced from £54.9bn to £33.2bn at the end of September while the number of schemes in surplus appears to have dramatically fallen compared with September 2007, when there were 3,012 schemes in surplus compared with 1,397 last month.

The PPF noted total schemes assets decreased by 7.7% to £767.6bn in September 2008, and are now down 11.4% over the year.

This comes at the same time as scheme liabilities appear to have increased by 7.2% to £848bn, although the PPF points out scheme liabilities have actually fallen against August thanks to higher gilt yields.

Assets fell in value in September as UK and global equity markets losses were substantially higher than the gains in gilt yields, according to the PPF.

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