The aggregate deficit of corporate UK pension funds reached more than £250bn in March, setting a record for a shortfall due in large part to the drop in gilt yields.

According to the Pension Protection Fund (PPF), the insurance scheme for the underfunded pension plans of insolvent employers, the aggregate gap between the value of scheme assets and the value of liabilities it guarantees rose to £253.1bn.

That reflects the aggregate shortfall of schemes in deficit, which is 90 per cent of all plans. Overall, the shortfall is £242bn, but that number has little meaning because the surplus of one scheme cannot be used to cover the deficit on another.

The PPF calculates its 7800 Index â?? named for the number of schemes it insures â?? based on average asset mix and interest rates prevailing on long-term conventional and index-linked gilts. In March, rising equities markets increased the value of assets by 2.8 per cent from their levels in February. However, this was too little to cancel out the effect of falling gilt yields as the Bank undertook its purchases of about £25bn in gilts.