The PPF is no longer in debt.

A PPF report shows that the fund is free from its massive deficit.

The Pension Protection Fund (PPF), created to safeguard the pension schemes of collapsed companies, recorded a £400 million surplus last year against a £1.2 billion deficit in 2008-2009, according to its annual report.

The pensions lifeboat saw a rise in the ratio of its assets to liabilities from 88% to 103%.

The upturn is due to the performance of its investments and falling yield bonds as well as changes to the industry levy, which generated £529 million, and less costly claims.

Government changes to the way that pensions are estimated was also an important factor – the shift from the retail prices index, traditionally used to calculate pension figures, to the consumer prices index has meant smaller increases for pensioners but a possible £500 million gain for the PPF.

Alan Rubenstein, chief executive, said: “The significant improvement in our funding reinforces our view that the PPF, and the protection system of which we are part, is sound. But I would stress that the PPF is not a short-term undertaking, which is why this change must be seen in context of our aim to become financially self-sufficient by 2030. That is the way we will provide reassurance to the millions of people whose pensions we protect that… their compensation is safe in our hands”.

In March this year, just under 46,500 people had been transferred over to the PPF, over 15,000 more than the same time last year. However, Mr Rubenstein said that “while [the fund] had a reasonable number of new claims, [it] did not have any big new ones last year”.