UK drinks giant Diageo has come up with a unique funding solution for its pension fund, which has a significant deficit at the moment. The company is set to hand over £430 million of scotch to its UK pension scheme and pay the fund £25 million a year for the right to use the whisky. All whisky used by the company will be replaced by Diageo and after 15 years the company will buy back the whisky for as much as £430 million, depending upon the pension fund deficit at the time.
It is believed that UK taxpayers have an ongoing pension liability for the overall UK public services sector of well over £1 trillion with some suggestions the figure could be as high as £2 trillion. These are liabilities which have built up over the years in the many final salary taxpayer-funded pension schemes in the public sector, at a time when final salary schemes have become very scarce in the private sector. So is the UK government right to tackle the issue and reduce taxpayer liabilities?
The BBC has become the first publicly funded organisation in the UK to announce changes to its final salary pension scheme which will limit the £2 billion deficit which has built up over time. The scheme will be closed to new entrants and the company will impose a cap of 1% a year on pension salary increases for existing members. This should, in due course, reduce the £2 billion deficit and allow the BBC to operate the pension scheme with more certainty and a much stricter financial straitjacket in the future.
The BBC has today announced plans to close its final salary pension scheme to new entrants and also limit pensionable salary increases to no more than 1% a year. This is the first major public sector operation to announce such a move and many believe that David Cameron will use this as a launchpad to attack public sector pensions which have built up massive deficits which UK taxpayers will need to cover.
There has been much mention of the UK pensions industry over the last few weeks, in both the public and private sectors, with many changes forecast in the future. However, it is becoming more and more apparent that many people in the UK are unwilling or unable to put aside savings for their retirement and will become more dependent upon the state to fund their later life. But should the state look after us in later life?
The Scottish Widows Pensions Report has revealed a disturbing trend which appears to have been exaggerated by the UK recession. The number of people in the UK saving for their retirement has fallen to its lowest level for four years and there is particular concern about ladies over the age of 50 who have been singled out as the most at risk area of society with regards to insufficient savings in their retirement. So what is happening?
After the emergency budget announced by George Osborne this week there is growing pressure on each and every individual in the UK to look at and review their pension arrangements. There have been significant changes to the pension industry and there will be more to follow in due course which could impact upon your relative wealth and relative spending power in the future. So is it time to review your pension arrangements?
Yesterday the UK government announced plans to increase the retirement age for men to 66 by 2016 with women following suit by 2020. However, there is a growing concern that many employees could find themselves forced into retirement prior to their 66th birthday which could see them out of a job but with no state pension.
The UK government has revealed that the age at which men can claim the state pension will increase to 66 years by 2016 which is around a decade earlier than the government had initially forecast. There is a growing feeling that the government is moving towards the abolishment of a statutory retirement age which many of the older generation have been calling out for. So when could this happen?
It is widely rumoured that the UK government is looking at introducing a pension levy on the public sector which would see public-sector workers contributing an additional 2.5% of their salary to be able to enjoy current benefits in the future. This move would raise around £3.2 billion a year for the UK government and begin to reduce the potential £1 trillion black hole in public finances caused by pension fund liabilities of the future.
