The collective deficit of the UK's private sector final-salary pension schemes worsened in May, according to data released by the Pension Protection Fund (PPF).
At the end of May the deficit of over 7,000 schemes monitored increased to £42 from just £2bn in April.
The worsening of their financial position was caused by a 1.9% drop in the value of schemes' assets during the month, due to falling equity markets. At the same time, a change in gilt yields increased the value of the liabilities they face by 2.1%.
The combination of these factors dragged nearly 400 pension schemes that had been in surplus into deficit, leaving 74% of all defined benefit schemes facing a shortfall.
However, the position of the schemes is still much better than a year ago when the combined deficit stood at £179bn.
The PPF said the deterioration in the past month was due to the falling value of assets such as shares.
"Total scheme assets amounted to £895.8bn in May 2010, representing a decrease of 1.9% over the month and an increase of 15% over the year to May 2010," said a spokesman for the PPF.
