The aggregate surplus of DB pension schemes fell to £215.5bn at the end of March, according to the latest Pension Protection Fund (PPF) 7800 Index.

That’s down by £17.2bn from a surplus of £232.7bn at the end of February.

The funding ratio fell to 124.7% in March, down from 126.1% in February.

Total scheme assets fell 3.3% to £1,1087bn during the month while total liabilities fell 2.2% to £872bn.

The deficit of schemes in deficit at the end of March was £29.8bn, £4.2bn higher than the £25.6bn recorded at the end of February.

Shalin Bhagwan, PPF chief actuary, said: "Yields in government bonds rose both globally and domestically through March, with the market digesting news that the German parliament agreed to an easing of their debt brake and substantial package of fiscal easing, while at home markets reacted to the increased forecast for aggregate gilt sales over the next five years following the Chancellor’s Spring Statement.

"This saw the estimated liabilities of schemes eligible for the PPF fall by 2.2% in contrast to a larger 3.3% fall in estimated total scheme assets. The result being a modest reduction in the estimated funding ratio, by 1.4 percentage points, to 124.7 per cent, while the estimated aggregated funding position fell by £17.2bn to a £215.5bn surplus."

Sarah Elwine, actuarial director at Broadstone, said: “Defined benefit pension scheme funding levels saw a notable deterioration in March as Government bond yields rose off the back of the Spring Statement.

“The start of April has seen significant market volatility following President Trump’s announcement of wide-ranging and higher-than-expected tariffs. These market movements are likely to have impacted funding levels and the time horizon of this turbulence also remains uncertain depending on negotiations and retaliations.”

She said the volatility emphasises the benefits of a matching investment strategy for schemes. “While we wouldn’t expect that trustees would need to take any immediate actions, they may want to consider in due course whether employer covenant for their schemes has been affected by the introduction of tariffs, particularly given the increase in employer National Insurance and minimum wage changes also coming into effect this month.”

Alex Oakley, BPA transaction manager at Standard Life, said: “While there was some wider market volatility during this period, the overall impact on the funding positions of DB schemes has been fairly muted and we expect the vast majority of schemes will have adapted their investment approaches to protect against such risks.

"With continued market volatility following global trade tariffs, monitoring investment strategies will be key for trustees and schemes to ensure protection against market turbulence and maintain momentum towards long-term endgame objectives."