The prospects for the UK’s largest company pension schemes have brightened and their combined ‘black hole’ of deficit has shrunk to a five-year low of £21bn, according to a report from Deloitte and Touche.

In addition, Deloitte and Touche found that a quarter of schemes were running at a surplus, thanks to a recovery in the stock market and higher contributions from employees.

Many schemes have also taken steps to reduce future pension liabilities by preventing new staff from joining and increasing the age at which pension benefits are paid.

David Robbins, pensions partner at Deloitte, said: “For the first time since 2001 we are starting to deal with schemes that have surpluses.

“Surprisingly, a surplus can be a headache for the company, as it is near impossible for the employer to take a refund from a pension scheme.”

He continued: “Many companies have now closed their schemes, so may find it increasingly difficult to use up the surplus, with the surplus effectively stranded,” he added.

Most UK company pension schemes have declined dramatically since the late 1990s, with three years of stock market falls between 2000 and 2003, combined with rising life expectancies, hitting many of the plans hard.

The rise of money purchase schemes, where workers pay in and their money is played on the stock markets with no guarantee of final income, stems from these factors.