American Express suspends contributions to UK pension scheme
In a move which many people hope will not be replicated across the UK business sector, American Express has today announced that company contributions into the UK final salary pension scheme have been suspended. The U.S.-based giant has, like so many other financial companies, suffered during the recession and confirmed plans to stop matching employee contributions for the next 18 months, something which will affect the company's 6000 strong UK workforce.
It is believed that the move is part of an overall cost-cutting initiative which will see £1.6 billion chopped from the company's cost base. However, pension advisers in the UK have reacted with surprise and scepticism to the move which while commonplace in America is often seen as a last resort in the UK. This follows a suspension of pension payments in the US, albeit only temporary, as the company strives to retain as much cash flow is possible in these difficult times. However, suspending the payment of pensions does not exactly give a signal of confidence for the future.
This latest move by American Express reflects the confusion and mystery surrounding the UK pensions industry, the future of which is becoming more difficult to forecast. Whatever will we see next?
Share this..
Related stories
Government wins alleged tax avoidance case
The UK authorities are today celebrating a potentially massive win in the courts when a judge ruled that retrospective tax legislation regarding offshore tax avoidance schemes was not against the human rights of those involved. The case centred round a self-employed IT contractor who was hit with a £100,000 tax bill by the UK authorities relating to income received through an offshore tax scheme....
Read MoreWhy it pays to shop around for your energy supplier
The last few days have seen energy costs in UK hitting the headlines with suggestions that the average energy bill could hit £5,000 over the next 10 years. However, we also saw British Gas introduced a 7% price cut which will impact upon 8 million customers immediately. So does it pay to shop around for your energy supplier? The energy supply market is very difficult to follow because of the v...
Read MoreUK government raises terrorist threat level
The UK government has tonight increased the UK terrorist threat from substantial to severe amid suggestions that the authorities have information regarding a potential Al Qaeda attack next week. It is possible that an increase in the terrorist threat around the globe could impact upon the worldwide economy which is still suffering from the economic downturn of 2009. There are also concerns that...
Read MoreUK government willing to be flexible on Icelandic debt
After the result of the Icelandic referendum on the debt repayment scheme for the UK government and the Netherlands government was announced, delivering a resounding "no" vote, the UK authorities have stepped forward with a proposed compromise. After £3.4 billion was loaned to the Icelandic authorities in order to repay savers who lost their savings in the financial meltdown a political argument...
Read MoreDo politics and economic strategies really mix?
As we mentioned in one of our earlier articles, the UK government has yet to set out a credible plan for reducing the UK budget deficit which is now at a high of £178 billion. One obvious reason why the government has not been as open about the future as it could be is simply because we are nearing a general election and the government needs the support of Labour voters across the UK. While wo...
Read More