Tesco’s pension deficit has reportedly doubled to more than £5bn in the past year, which could threaten its ability to resume paying dividends.

The grocer’s pension deficit has soared by at least £3bn due to low interest rates and bond yields, analysts and pension experts estimate. 

“Tesco is not facing a short-term problem, but a long-term balance sheet problem due to its hefty pension obligation,” said Exane analyst Andrew Gwynn in a note.

Tesco’s pension scheme has around 350,000 members, which includes 203,000 active employees.

The grocer has been attempting to boost its balance sheet as it recovers from 2014’s accounting scandal. This has included selling its business in South Korea.

“If low bond yields persist, it’s possible that the cash demands from trustees will rise,” Gwynn added.

Tesco last paid a dividend to shareholders in December 2014. Experts believe the soaring deficit could threaten a return to payouts for shareholders.