Company pension funds climb back - then fall again

Buoyant stock markets and higher levels of contributions by employers helped pension funds at Britain's biggest companies move from a £36bn deficit to a £12bn surplus in the year to mid-July, a report from actuary Lane Clark & Peacock has found.

However, stock market volatility has since turned the surplus into a £6bn deficit, with the FTSE 100 down nearly 8 per cent by the end of July.

LCP partner Bob Scott said last month's fall in share prices had shown how fragile the previous surplus was, underlining the vulnerability of UK pension schemes to the performance of equities.