Under a deadly backdrop of COVID-19, you might expect the UK private pensions sector to have suffered enormously, with the national economy shrinking by almost 10 percent in 2020.

Opinion is mixed on the ramifications of the pandemic – and Brexit uncertainty – on the sector, which in 2018 had a total worth of £6.1 trillion ($8.2 trillion USD).

The accounting deficit of defined benefit (DB) pension schemes for the UK's 350 largest listed companies rose by 75 percent in 2020.

A leading actuary has called those losses "dramatic," but one of the country's top financial advisors told CGTN he predicts a boom for pension funds and other forms of savings this year.

A DB pension scheme is one where the amount policyholders receive when they retire from work is based on how many years they have worked for an employer - and their salary.

Last month Mercer's Pensions Risk Survey released data relating to half of all UK pension scheme liabilities, showing the accounting deficit rising from £40 billion ($54 bilion USD) in 2019 to £70 billion ($94 billion USD).

Charles Cowling, Chief Actuary at Mercer, said: "Though it could appear there was no major impact on pension schemes, the relatively modest reduction in funding levels hides far more dramatic consequences of a really challenging year for some."

He added: "By 2018 pension schemes had clawed themselves back into an overall surplus, only for COVID to strike at a time when a fragile UK economy was also struggling with Brexit."

Cowling says that although the impact appears less than that of the 2008 financial crisis, there are two major concerns for pension scheme trustees.

"Firstly, total pension liabilities are more than twice the size of pension liabilities in 2009," said Cowling. "Second, many businesses have suffered very significant shocks, that threaten the strength of the employer covenant available to support the pension scheme and even threaten the very existence of many businesses, particularly in the hospitality, retail and travel sectors."

Rob Yuille, head of long-term savings at the Association of British Insurers, says the picture is less clear. "The impact on defined benefit scheme deficits is varied, and partly depends on the scheme's investments," Yuille told CGTN. "It is too early to tell the overall impact on how the increased mortality affects pension schemes; the greater short-term impact arises from long-term interest rates being very low."

He added: "New pension and investment policies and premiums fell in the early stages of the pandemic, but opt-out rates from automatic enrolment into workplace pensions have not risen significantly."

The UK annual death toll in 2020 was its highest in more than 100 years. Despite this, Roy McLoughlin, associate director at Cavendish Ware wealth management group – and founder of the Income Protection task force - says it remains too early to predict its influence on fund deficits.

"Paradoxically, the earlier people die the better it is for pension schemes because obviously they don't have to be paid as much money," said McLoughlin. "The evidence of how COVID has affected mortality so far is interesting, because if you take life insurance, which is traditionally put alongside actuarial roles, so far it hasn't affected the prices."

Any shortages in pension funding might also be filled by what McLoughlin sees as the unexpected bonus of the pandemic – the freeing up of spare cash among those who have retained well-paid jobs, allied to growing fears among those people that their savings are inadequate and must be replenished.

"It's been estimated that people are saving 17 percent more than they normally do, mainly based on the fact that they're not going out. The financial industry has seen an uptake in people paying into ISAs and pensions," he said.

Yuille agrees. "Many people having increased disposable income may well convert to higher levels of investment for those in that position," he said.

McLoughlin says the insecurity created by the pandemic has increased the desire for insurance. "At the start a lot of advisers anticipated outflows of cash, mainly because people would need money to live on or were spooked by the market situation. That hasn't really happened.

"In the insurance industry the greatest challenge to people like myself was always a very simple line we would hear from people – 'this won't happen to me.' After this crisis who can honestly utter those words again? Therefore I would anticipate that the need for insurance based products will be arguably higher than it ever has before."