A recent survey has shown that over 60% of those in the UK wish to see the government abolish the statutory retirement age of 65. Ironically, the Conservative/Liberal Democrat coalition government had promised to phase out forced retirement but it looks as though David Cameron may have speed up this particular strategy. So why is there a move towards working into later life?
A report by PricewaterhouseCoopers has revealed that nine out of ten private sector businesses in the UK are set to close their final salary schemes to existing members. Many of the companies surveyed have already closed their final salary schemes to new members and are set to extend this to existing members. In simple terms, members will be encouraged to transfer to cheaper alternatives with bonuses and additional payments likely to be included in any transfer package.
The Pensions Regulator has today issued a raft of new guidelines aimed at defending the interests of pension fund members as more and more companies in the UK continue to struggle financially. We have seen a number of changes in the pensions industry over the last decade but the last couple of years we have seen more and more final salary schemes close to new members and indeed many have actually been converted into money purchase scheme.
There has been much talk in the press about the potential impact on pension funds from the fall in the BP share price. However, amidst all this doom and gloom it is easy to forget that any pension fund arrangement should be a long-term investment although there may be a need to protect income as retirement day approaches.
As problems at BP continue to grow there are fears that many people in the UK could be hit by the collapse in share price. This is a company which has for some time been one of the largest components of the FTSE 100 and therefore a main component of many tracker funds and pension arrangements. As a consequence, it is highly likely that any stock market-based pension arrangement will have some exposure to the BP share price although concerns about the overall impact on pension arrangements could be overdone.
In what many believe could be the start of a whole wave of adjustments to defined benefit pension scheme arrangements, United Utilities has this week announced changes for the future. The company had been running a deficit of £359 million at the end of September 2009 but this has now fallen to £271 million at the end of March 2010. So what changes are afoot?
A survey from Aviva Group has today confirmed that just under 70% of workers in the UK, around 33 million people, fully expect to work beyond their retirement age purely and simply as a way of making ends meet. This is yet another reflection of the growing difficulty facing many people in older age as the cost of living continues to rise in the UK and pensioners appear to be off the radar with regards to government assistance.
The percentage of UK employees who are part of an employer pension scheme has fallen from 55% to 50% between 1997 and 2009. It was also revealed, by the Office for National Statistics, that the percentage of self-employed men paying into a pension fund arrangement has also fallen from 64% to 45% over the same period. This is a worrying decline in pension scheme membership and pension fund arrangements which the UK government needs to address immediately.
In what is a very positive move in his early days in office, Marc Bolland, the new chief executive of Marks & Spencer, has confirmed the company will inject £800 million into the company's pension scheme between now and 2018. The pension scheme is rumoured to have a £1.3 billion shortfall and there were concerns about how the company would tackle this problem.
A report by the Pension Protection Fund has shown that the largest 7,400 pension schemes in the UK with defined-benefit arrangements are now around £2.2 billion undercapitalised after a £300 million surplus situation in March. The massive turnaround from a small surplus to a massive shortfall is purely and simply because of the large fall in the UK stock market since election concerns began to hit home.
