The combined deficit of UK defined benefit pension schemes in the PPF 7800 Index is estimated to have halved during December, according to the Pension Protection Fund (PPF).

The latest data from the PPF showed a deficit of £35.4bn, a 50.2 per cent drop from the £71.1bn registered at the end of November.

However, December’s reading remained larger than the £31.9bn registered at the same point 12 months prior.

The monthly decline was driven by a £40bn drop in liabilities to £1,776bn, which more than offset the impact of assets edging £4.3bn lower to £1,740bn.

On the other hand, the slight yearly decline is due to an 11 per cent jump in liabilities, though assets have roughly kept pace as they climbed by the same percentage during the period.

Meanwhile, December also saw the number of schemes in deficit fall by 5 per cent to 3,168 compared to the end of November, with the figure having now dropped for four months in a row.

The funding level of the schemes increased from 96.1 per cent at the end of November to 98.0 per cent at the turn of the New Year.

Commenting on the figures, Buck head of retirement consulting, Vishal Makkar, said: “An indisputable UK general election result has put an end to the long-term political uncertainty which has dominated 2019.

“At the same time, the corresponding increase in gilt yields saw the aggregate liabilities of the UK’s DB schemes fall in December.”

However, Makker noted that deficits have worsened in the last year and added that he hoped the new government could “provide a steady hand to calm markets and bring a return to normalcy for the industry”.

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