Pensions deficit 'down to £3bn'

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The pension fund deficit for the largest 200 schemes in the UK has fallen to a record low.

In March 2003, the biggest final salary style schemes had a combined shortfall in their funds of more than Â£100bn.

That deficit has fallen to Â£3bn and almost half of the funds looked at by consultants AON are now in surplus.

The BBC's Richard Scott says the improvement is down to rising stock markets and increased contributions from firms.

AON believes the situation is likely to improve still further.

But it has warned that companies should be careful about putting too much money into pension funds.

If that happens they could risk being accused of ripping off shareholders or employees, the consultants say.