Shortfall in pensions rises by £15bn

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The 200 biggest defined benefit schemes, including final salary pensions, saw their deficits widen to £77.6 billion during the month, broadly in line with August's record high of a £78 billion black hole.

Aon Consulting said the deterioration, which wiped out nearly all of the gains seen during September, was due to expectations that inflation would increase going forward.

The majority of pensions pay benefits that are linked to inflation, so a higher rate of inflation means increased costs for schemes, putting pressure on their finances.

The group added that there had also been a small dip in the value of assets held by pension schemes during the month.

Sarah Abraham, consultant and actuary at Aon Consulting, said: "Currently many investors believe that the Government will be unable to deliver its annual inflation target of 2%.

"This increases pension scheme deficits because most pension schemes promise to pay benefits that are linked to inflation.

"The position is very volatile because if this lack of confidence in achieving inflation targets worsens, then pension schemes can expect deficits to increase even further."

But she added that if the market thought inflation would remain below 2%, this would knock around £60 billion off pension scheme deficits.

The majority of final salary pension schemes have been closed to new members during the past few years, with employers replacing them with less generous defined contribution schemes, under which employees shoulder all the risk.

There is also a growing trend among companies to close their final salary schemes to existing members as well, as the pensions become increasingly expensive to offer.