Pension schemes remain “well funded” with an aggregate funding level of 97 per cent, despite current market turbulence, the report has shown.

The current deficit marks a £37 billion reduction from the figures taken in December 2006.

John Hawkins, Principal at Mercer, called the figures “encouraging”, noting that “it is little surprise that many schemes and their sponsors continue to seek ways to mitigate pension risks, especially those that are poorly rewarded”.

However, the Pension Protection Fund 7800 Index had conflicting data, recording the aggregate funding deficit at £19.6 billion at the close of 2007.

The PPF 7800 provides the latest estimated funding position of mostly private sector defined benefit pension schemes in the UK.

This discrepancy is due to the different methods that the two surveys employ to calculate deficits and surpluses, Pensions & Investments reports.

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