Pension fund deficits continue to rise
It has been revealed that the U.K.'s top 200 pension schemes are in deficit to the tune of £100 billion. While there has been intense speculation over the last few weeks regarding the size of pension scheme deficits in the UK, the fact that the £100 billion figure has been breached for the first time ever is a massive blow to the sector.
Even though there are obviously enormous implications for pension scheme members of final salary schemes in the UK, where their scheme is in deficit, it will in many ways speed up a cleanup of the sector and a realignment of regulations. There are many reasons as to why the current pension fund deficit has ballooned so dramatically over the last few years, with a mixture of increased tax liabilities, extended life expectancy in the UK and reduced investment returns in the short term.
However, the real concern amongst UK employees is the fact that sponsoring companies will be forced to increase their pension fund contributions which could in some cases have a material impact upon the smooth running of the underlying business. Even the Pensions Regulator appears to be concerned about the short to medium term outlook and there is a lack of funding to cover all potential pension fund collapses in the short to medium term.
Share this..
Related stories
Are you saving enough for your retirement?
While the recent economic downturn has hit many people in the UK there are concerns that it has exposed a lack of preparation for the future and for retirement. It is believed that almost half of those over 55 do not have any monthly savings plans in place and indeed 20% are estimated to owe at least £75,000 on their mortgages. The very fact that the situation for those over 55, and struggling...
Read MoreUK house prices under pressure
The Royal Institute of Chartered Surveyors has today revealed pressure on UK house prices as more and more people look to dispose of their properties ahead of the election. This is something of a surprise as many people had initially assumed homebuyers and sellers would hold off until the election was over but it appears that there is pressure as more properties come onto the market. The report...
Read MoreUnemployment strikes at the heart of family life
A report from the Office for National Statistics has today cast a dark shadow over UK employment market with news that between April and June 2010 there were 3.9 million homes in the UK where no adults were in employment. This is a rise of 148,000 on the second quarter of 2009 and will place more pressure on the UK benefits system in the short to medium term. It is also believed that a large po...
Read MoreInvestors attack stock markets in Portugal, Spain and Greece
The ongoing budget deficit problem which is affecting Greece has seemingly spilled over into Portugal and Spain with investors selling off stocks in these three stock markets due to fears over fiscal stability. The situation regarding Greece is well known, with a budget deficit four times the size of any other in the Eurozone, but Portugal and Spain have seemingly been affected by falling investor...
Read MoreWould the city support a £10 billion rights issue by Lloyds bank?
As Lloyds bank continues its attempt to reduce the influence of the UK government over the operation, there are signs this evening that some influential institutional investors would possibly support a potential £10 mbillion fundraising. Lloyds bank is in need of a significant cash injection because of the multibillion pound cost of joining the government's bad debt insurance scheme which would u...
Read More