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FTSE 100 companies see pension deficits increase

In another blow for the UK pensions sector it has been revealed that the cumulative deficit of FTSE 100 company pension schemes has increased from £41 billion in August 2008 to a massive £96 billion today. This is by far and away the largest cumulative pension deficit ever seen in the history of the UK pension industry and is starting to cause significant concern in corporate circles.

When you consider that the likes of Shell had a £6.8 billion pension fund surplus just 12 months ago, this has now reversed into a £5.6 billion deficit due in the main to the funds excessive exposure to the worldwide share market. While few companies will have a deficit the size of Shell it does perfectly illustrate how a surplus just 12 months ago could have disappeared and been replaced by a massive deficit. It will be up to these companies to make up a shortfall over the coming years which will obviously take cash out of the business and reduce shareholder income, paid out in the form of dividends.

There will be significant changes in the UK pensions sector over the next decade as the subject of deficits and pensions shortfalls needs to be addressed as soon as possible.

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