The Universities Superannuation Scheme, the pension fund that covers the UK's higher-education sector, has warned of "difficult decisions in the coming year" as it grapples with a £7 billion funding shortfall.

With £41.6 billion of assets at March 31, its year-end accounting date, the scheme has overtaken the BT Pension Scheme, with £40 billion of assets, as the largest single pool of retirement assets in the country, according to analysis from Financial News.