Are we nearing the end of final salary pension schemes?
It has been revealed that 80% of company directors in the UK believe that final salary pension schemes will close their doors to new members in the short term. The ongoing recession coupled with the performance of investment markets over the last decade has seen more and more final salary pension schemes slip into deficit which has resulted in a very heavy burden for sponsoring companies.
While it is difficult to pinpoint the moment when the final salary pension scheme sector turned, many people look back to the time when Gordon Brown was Chancellor of the Exchequer and introduced a number of taxes on pension fund income and pension fund assets. In what was the classic "smash and grab" this resulted in a massive windfall for the government but saw pension funds stripped of vital income for the future. It's not just the short-term reduction in funds available for investment but the fact that the reinvestment of income and capital in the future was also impacted.
The move to defined contribution pension schemes is growing stronger as companies in the UK look to reduce their potentially growing burden from company pension schemes.
Share this..
Related stories
Absolute return funds 'not faultless'
The volatile markets and negative returns should not put off investors in absolute returns funds, an investments expert has said.Dan Mannix, head of sales at RWC Partners, pointed out that any investment that was not totally risk-free had the potential to lose money some months.Exceptionally large falls on stock markets have been seen over recent weeks, with the FTSE 100 dropping by over 21 per ce...
Read MoreTreasury defends stamp duty raises
The Halifax has released a report criticising stamp duty increases which mean that almost a fifth of homebuyers are now paying the tax at a higher rate than they did five years ago. Buyers who purchase properties valued at a minimum of £250,000 must pay a stamp duty rate of at least three per cent. The number of home sales now reaching that rate has risen from 73,403 in 2001 to 279,408 in 2006....
Read MoreIs it time to start saving for the kids
More and more people in the UK are looking to set up regular savings accounts for their children in the hope of putting aside a significant nest-egg when they reach 18, 21 or some other predefined age. While many have invested in the likes of unit trusts and other collective investments, more and more people are just opening plain bank accounts and paying relatively small but regular contributions...
Read MoreGoldman Sachs announces agreement with SEC
Goldman Sachs has this afternoon announced an agreement with the Securities Exchange Commission (SEC) which we see the financial powerhouse pay US$550 million in settlement of a civil fraud complaint although the company is not admitting or denying the charges. Many believe that the SEC was looking for "its day in court" although the agreement would appear to have put pay to any short-term plans t...
Read MoreWho will benefit from the so-called retail VAT freeze?
There is confusion and misinformation in the UK retail market this morning with allegations that the VAT freeze announced by a number of large retailers in the UK may not be as beneficial to UK consumers as it first looked. Allegations that a number of companies have increased the price of many products ahead of the "VAT freeze" have hit the headlines today although these are unsubstantiated claim...
Read More