Funding holes ease over 2010

Stock market gains over 2010 helped to narrow the combined shortfall faced by the UK's biggest corporate final salary pension schemes, according to figures from the consultancy and outsourcing firm Aon Hewitt.

Rising share prices meant that the aggregate pension deficit improved by £35bn to stand at £52bn at the end of December.

Though narrower, the shortfall still means that the 200 biggest final salary pension schemes remain far weaker than at the end of 2008, when they booked a £3bn surplus, or 2007, when the deficit stood at £2bn.

"Even though the pension black hole has ballooned over the past two years, it will be a happier new year for companies preparing their end of year accounts," Aon Hewitt's principal, Marcus Hurd, said. "Many will breathe a small sigh of relief that their pensions deficit has finally started to improve."

The boost comes on the back of a 9 per cent gain in London's benchmark FTSE 100 index over the past year. The mid-cap FTSE 250 index also recorded a strong 12 months, rising by more than 24 per cent over 2010.