Pension funds of FTSE 100 and FTSE 350 companies have swung into deficit over the past year, and their deficits widened by 27 cent in the month of October alone, as the negative effect of falling bond yields more than outweighed the benefits of the recent surge in equities.

At the end of October, FTSE 100 companies had a combined pension deficit of £81bn, meaning they were only 83 per cent funded. This compares with a surplus of £22bn - a 107 per cent funding level - the same time last year. It is also a 27 per cent increase over the course of the month of October: at the end of September of this year, the deficit stood at only £64bn.

The situation is equally bad for FTSE 350 companies, where pensions swung from a surplus of £20bn this time last year to a deficit of £90bn â?? an annual shift from a 106 per cent funding level to an 83 per cent funding level. The deficit at FTSE 350 companies also jumped by 27 per cent in the month of October alone.