The funding shortfall faced by the UK's biggest defined benefit pension schemes soared five-fold during May, figures showed yesterday.
The 200 largest defined benefit schemes, including final salary pensions, collectively had a £40 billion deficit at the end of the month, up from an £8 billion deficit at the end of April, according to consultancy firm Aon Consulting.
The huge increase in the funding blackhole came despite stock markets rising during the month.
But the group said these investment gains were more than offset by future projections for rising inflation, which increased the liabilities schemes face.
It warned that the Bank of England's programme of quantitative easing was likely to lead to a period of higher inflation in the medium term.
Rising inflation pushes up the cost of offering final salary pension schemes, as the benefits paid rise each year in line with inflation up to a cap.
Aon estimates that every 1 per cent rise in inflation could lead to the accounting deficit faced by the 200 biggest schemes increasing by around £85 billion, if there is not also a corresponding increase in investment returns.
Sarah Abraham, consultant and actuary at Aon Consulting, said: "Economists are debating the problems associated with deflation, but for pensions schemes we are switching our concerns to the spectre of looming high inflation.
"There is a real risk for sponsors that this level of inflation would have an adverse effect on their schemes."
A survey carried out for the group found that 49 per cent of pension scheme trustees are changing their asset allocation, while a fifth have undertaken a formal actuarial valuation due to the current economic turmoil.
Six out of 10 trustees said they had increased their holdings of UK corporate bonds, while 45% have moved money into UK Government bonds and 21 per cent have switched to UK index-linked bonds.
Only one in four schemes have decided to take advantage of depressed equity markets and increase the amount they have invested in UK and global shares.