Blue-chip pension schemes receive record £17.5 billion contribution
The UK's top 100 blue-chip companies last year pumped a record £17.5 billion into their struggling pension schemes which allowed the deficit to be almost halved, currently standing at around £51 billion when taking into account income and investment gains. Records indicate that Royal Dutch Shell injected around £3.3 billion into its own flagging scheme with the likes of Lloyds bank, Royal Bank of Scotland and Unilever increasing pension fund contributions to around £1 billion.
While there's no doubt that the additional pension fund contributions have made a difference to the standing of various UK final salary pension schemes, there is still much work to be done. There is also growing concern that additional pension fund contributions will begin to impact upon company cash flow, inward investment as well as payments to shareholders. If payments to shareholders of companies such as BP, and other major companies in the UK, are reduced or suspended then this will impact upon income for the UK's main pension schemes.
It will take some time for the UK pension fund arena to recover from the downturn in share prices and the reduction in investment returns over the last few years. Whether or not the UK government is in a position to reduce or loosen tight regulations with regards to pension fund liability calculations remains to be seen.
Share this..
Related stories
Government to review annuities for the elderly
George Osborne has announced a number of proposals with regards to future pension arrangements in the private sector and the public sector. One which has caught the eye of many in the UK is the proposal that those aged over 75 should not be forced to buy annuities to secure their income in later life. So what does this mean for those in retirement? At the moment those in retirement can buy an a...
Read MoreWho will protect older workers in the UK?
As the recession continues to hit many areas of the UK business arena there are concerns that many older workers in the workforce could encounter a recession double whammy. Amid concerns that many older workers could be jettisoned as costs are cut and unemployment rises, there are fears they will be forced to take their pensions even though many pension funds have been decimated over the last 18 m...
Read MoreFSA reveals concerns about UK SIPP market
The Financial Services Authority (FSA) has today reiterated concerns regarding the UK SIPP market which has grown significantly over the last decade. Self invested personal pensions (SIPPs) have become very popular with investors looking to take control of their own pension schemes and invest in the stock market and elsewhere. However, this is still a very young regulatory market and SIPP provider...
Read MoreEU pension timebomb starts ticking
As the UK government gets set to tackle the UK public sector pension deficit, with rumours that employees will be asked to contribute more in the future, there is growing concern about a similar situation in the European Union. Estimates with regards to Europe suggest that the ratio of pensioners to workers in Europe could double in the next 50 years which would place massive pressure upon state p...
Read MoreIs the UK on the brink of a pensions nightmare?
For many years we have heard the doom and gloom stories about the UK pension industry, how underfunded pensions are growing in number and the gold-plated arrangements available to the public sector are bleeding us dry. While many have dismissed these as scare stories there was a subtle movement this week when pension company Aviva announced significant changes in its own staff pension operations....
Read More