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
Barclays bank deals final salary pension schemes a killer blow
News that Barclays bank is not only closing its final salary pension scheme but also transferring assets into a cheaper scheme which will reduce future liabilities has received widespread criticism from the unions and employees. Just weeks after agreeing the sale of its iShares division the company is looking to reorganise and rebalance its assets and liabilities and the final salary pension schem...
Read MoreWill we see quantitative easing back on the agenda?
As the rate of inflation in the UK looks set to continue to trend downwards there is growing speculation as to whether the UK government will give the Bank of England the go-ahead to reintroduce quantitative easing. This is the £200 billion program which was at the centre of the previous government's attempt to refuel the UK economy effectively oiling the wheels of finance at a time when the bank...
Read MoreUK banking shares hit by fundraising fears
The UK banking sector has come under more pressure today with many investors fearful that the government will be left with the bulk of new shares to be released. The idea of the rescue package had been to instil confidence back into the sector by effectively putting the government forward as underwriter for the new share issues. With existing shareholders offered the chance to subscribe on a pro r...
Read MoreSunday Times Rich list reveals criticism of UK government
As the Sunday Times Rich list is about to be revealed a number of those on the list have stepped forward to criticise the introduction of a 50% tax rate in the UK. It is rumoured that the likes of Hugh Osmond, the pubs and insurance entrepreneur, Tim Waterstone, founder of the Waterstone's bookshop chain and Peter Hargreaves, a substantial name in the UK financial advice sector, are all rumoured t...
Read MoreAre we on the verge of a change in government?
The last couple of days have seen Parliament grab the headlines for the wrong reasons with scandal, resignations and internal bickering happening on all levels of UK government. It looks highly likely that we could see a significant change in the direction of the Labour Party and the UK government, with calls for an immediate general election growing stronger. So how will this affect the UK econom...
Read More