The accounting deficit of defined benefit (DB) pension schemes for the UK’s 350 largest listed companies was £80 billion at the end of March 2021, up from £79 billion at the end of February, according to the latest data from Mercer’s Pensions Risk Survey.

Mercer said liability values for the pension schemes increased to £863 billion at the end of March 2021 “driven by an increase in inflation expectations offset by a small rise in corporate bond yields.”

Asset values were £783 billion.

Mercer chief actuary Charles Cowling said: “Markets are holding up well despite last month’s budget from Chancellor Rishi Sunak highlighting the huge scale of Government borrowing in response to COVID-19.

“This level of Government debt is going to have to be managed, but with interest rates so low, the cost of servicing this debt is not causing any immediate headaches.

“In spite of the economic shocks of the last 12 months, pension scheme funding levels remain stable. However, trustees and companies should not become complacent.

“There are fears that inflation will rise again as governments around the world pump billions of pounds of stimulus into the global economy.

“There are also worries that as we emerge from lockdown, and furlough and mortgage interest support is eventually eliminated, the scale of the problems facing many businesses and individuals will become apparent.

“The likelihood is that even if the economy makes a full recovery from the pandemic, it has irrevocably changed some parts of the economy.

“Pension trustees should consider taking opportunities to reduce risk when and where possible.”

Mercer’s Pensions Risk Survey data relates to about 50% of all UK pension scheme liabilities, with analysis focused on pension deficits calculated using the approach companies have to adopt for their corporate accounts.