Pension safety net repairs its £1 billion hole

The UK's pensions safety net fund is back in the black after buoyant stock markets helped to turn a deficit of more than £1 billion into a surplus.

The Pension Protection Fund said it had a 400 million surplus at the end of the 2009-10 financial year, up from a deficit of 1.2bn 12 months earlier.

The fund, which pays retirement incomes to people who lose their pensions as a result of their company going under, credited the turnaround to improved financial markets and solid investment returns of 15 per cent during the year.

Alan Rubenstein, chief executive of the PPF, said: "The significant improvement in our funding reinforces our view that the PPF, and the protection system of which we are part, is sound.