Brexit causes £80bn rise in DB deficit

Its Chief Investment Officer Andy Green said that "clearly there has been an immediate impact on markets and hence on the funding positions of Defined Benefit pension schemes; but the full, longer-term impact remains to be seen".

He believes that "financial markets have responded even more dramatically to the result than expected".

Following the outcome of the Referendum, the pound fell by over 10% to the lowest level seen since 1985 - the biggest single fall on record. The FTSE 100 also fell 7% within minutes of the stock exchange opening, equivalent to a £160bn loss.

Additionally, yields on Government bonds fell by around 0.25% and index-linked yields have fallen almost as far.

Hymans Robertson says that what is more challenging is the further fall in gilt yields, on top of what has been a "fairly persistent downward journey". Green says that lower yields will place further burden on the scale of UK pension fund deficits, adding that "the outlook for inflation expectations, and the associated implication for funding, is more uncertain".

He said that volatility will "no doubt continue, and there will be periods of further pain for pension funds but also opportunities".

In a statement, Hymans Robertson said: "While we’d advise schemes to avoid over-reaction to short term market volatility, as the dust settles, it will be necessary to consider how well the investment strategy stacks up to the new environment. Depending upon the economic outlook, we may enter another period of lower absolute returns for all assets, with consequences for the relative attractiveness of growth dependent assets versus assets that deliver more of the return through income. Trustees and sponsors should have the right balance between growth assets, income based assets and downside protection to meet their needs."