The latest Mercer’s Pensions Risk Survey data shows that the accounting deficit of defined benefit (DB) pension schemes and other post-retirement benefit plans for the UK’s 350 largest listed companies rose by £10 billion over the course of November to £104 billion.

The increase was driven by a £31 billion increase in liabilities to £962 billion at the end of November caused by a fall in corporate bond yields and an increase in market expectations of inflation.

Asset values increased to £858 billion from £837 billion at the end of October.

Tess Page, UK Wealth Trustee Leader at Mercer, said: “The impact on markets of the new Omicron variant served to highlight that the pandemic is not yet over.

“Alongside this fresh uncertainty, inflation remains a hot topic with significant increases observed and potentially more to come.

“Whilst some inflation drivers such as supply chain issues and reopening price pressures are arguably ‘temporary’, others may be longer term.

“As a pandemic-fatigued nation heads towards the Christmas break, this was a month in which unhedged assets again failed to keep pace with liabilities – risk management should be high on the agenda for all schemes in 2022.”

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.