The Bank of England's Monetary Policy Committee decided yesterday to drop the Bank Rate to an historic low of 0.25% - breaking a record period of no change which stretched back over seven years.

Graham Vidler, director of external affairs at the Pensions and Lifetime Savings Association, said: “The Bank of England’s decision to cut interest rates will give pension schemes cause for concern.

“They have been battling historically low interest rates for over eight years and further cuts will put them under even greater pressure.

“The introduction of further quantitative easing (QE) will also put pressure on pension schemes.”

He called on the Pensions Regulator to use its existing powers to take a “proportionate and flexible approach to scheme funding in these uncertain times”.

The body said TPR should give particular consideration to schemes going through a valuation cycle at the moment.

Mr Vidler said the organisation recognised the level of QE was significantly lower than previous rounds and that the Bank of England is using some of the programme to purchase corporate bonds.

He said: “As these bonds are higher-yielding instruments they could provide more stimulus than the same amount of gilt purchases, but nonetheless the impact this will have on gilt yields will be an additional burden for many schemes already struggling.”

“While we recognise the need to protect the UK economy, strong consideration needs to be given to the negative impact this will have on the 6,000 private defined benefit pension schemes helping some 11 million savers.”