Defined benefit pension scheme deficit among FTSE 350 firms surged to £41bn by the end of 2018, up from £32bn the previous year, driven by falling asset prices.
The figure, a 28 per cent increase, came at the end of a volatile year which saw pension schemes in surplus for five months from May to September.
But December alone saw the deficit increase by £24bn to £41bn as stock markets tumbled throughout the month, according to consultancy Mercer.
Le Roy van Zyl, Partner at Mercer, said the volatility demonstrated “the importance of schemes locking in gains when opportunities to take risk off the table arise”.
“2018 was a turbulent year and it is disappointing to see it finish in deficit after finally reaching a surplus for the first time since Mercer began regularly monitoring the position,” he said.
“While the return to deficit is unwelcome, we are still in a markedly better position compared to the very large deficit following the 2016 Brexit vote.”
Mercer said the deficit was down to a £19bn fall in asset values from £766bn to £747bn, while liabilities were more steady, reducing by just £10bn - from £798bn the previous year to £788bn at the end of 2018.