The turmoil in the markets, originating in China during late February, resulted in the highest single day increase in deficits under FRS17 of £11bn. This prompted a resurgence in volatility levels, according to Aon, and weekly deficit changes of £10bn have been common.

In the past year, UK pension deficits have tumbled by 45% to £26bn, and British companies with 31 March accounting year ends will benefit from the improvement, according to Aon.

“£10bn swings in the national deficit have occurred from one week to the next,” said Marcus Hurd, senior consultant and actuary at Aon. “Companies reporting a few weeks earlier would have reported losses over the year at a time when the national deficit was almost double its current value at £50bn. This shows the shortcomings of using a short-term basis to measure long-term obligations under FRS17.”

While the overall pensions deficit has dropped over £40bn over the previous two years, this masks the underlying volatility.