Britain's biggest companies have seen the shortfall in their pension schemes halve during the past year due to rising share prices, research showed this morning.
Consultants Hewitt Bacon & Woodrow estimate that the pensions deficit faced by FTSE 100 companies has fallen from £100 billion sterling at the beginning of 2003 to under £50 billion now.
The group added that the FTSE 100 Index may only have to climb above the 5,000 threshold for the average company to find their deficit has been wiped out altogether.
But the group warned that, despite company schemes being boosted by rising share prices, they still faced many challenges.
The deficits were measured under the new accounting standard called FRS17 that takes a snapshot of a company on a particular day and does not allow firms to smooth out the effects of stock market volatility.
But pension schemes have also been hit by a number of other challenges in recent years, such as poor stock market returns and increased life expectancy.
The National Association of Pension Funds recently reported that one in four final salary schemes had closed to new members during the year to the end of April.