Pension liabilities hit a record high

The liabilities faced by defined benefit pension schemes soared to a record high during August as market conditions continued to deteriorate, according to Aon Consulting.

The consultants have calculated that liabilities of the UK's private defined benefit schemes, including final salary pensions, has jumped to £1.2 trillion, due to a drop in gilt yields, which are used as a benchmark for assessing future pension liabilities.

The fall in gilt yields – with the 20-year gilts yield falling to 3.76 per cent – has led to the deficit faced by the UK's 200 biggest defined benefit pension schemes rising to £97bn at the end of August, up from £74bn in July.