Experts in the pension field have today highlighted a passing comment by Gordon Brown in yesterday's party leaders debate. He spoke about restructuring pension tax relief for those earning in excess of £100,000 a year in the UK when the tax reliefs in question are currently available to those earning up to £130,000 a year. As a consequence, it is believed that an additional 300,000 people in the UK will suffer a loss of tax incentives on their pension fund arrangements.
A report by MGM Advantage claims that the average couple in the UK will require £600,000 to be able to enjoy 20 years of retirement. While there is a large variation in the cost between the South and the North of England, with London couples said to require £194,602 more than their northern counterparts, it will come as a shock to many in the UK.
As the UK pension fund industry gets set for major changes in the future the FSA (Financial Services Authority) has again questioned the quality of advice given to some pension fund members who transferred out of employee pension schemes. If you have recently transferred from an employee pension scheme into a private pension arrangement it may be worthwhile checking the terms of your transfer and whether indeed the advice which was given was correct at the time and correct for your circumstances.
The latest figures from the Pension Protection Fund, the government appointed scheme to secure underfunded employer pension schemes, shows that there is a surplus of £300 million in UK schemes. However, this surplus figure is slightly misleading because if you take the schemes which are underfunded on their own, the figure actually stands at £73.3 billion which is down from £79.5 billion at the end of February.
The issue of pensions and retirement is set to become more and more important to every citizen in the UK in the months and years ahead. Last week's announcement by the FSA regarding the allegedly poor level of pensions advice available in some areas of the market is a concern which needs to be addressed sooner rather than later. Very often it is easy to look at the short-term picture when indeed your pension should be a very long-term arrangement, able to give you a suitable standard of living after you finish working.
The FSA is currently following up on reports produced in 2008 which drew the attention of regulators to the UK pension market and potentially detrimental pension switching advice. The FSA has found a number of cases whereby pension fund members have been advised to switch out of company pension schemes with the short-term benefits often negated by long-term consequences.
It has been revealed that AA patrolman will strike for the first time in the company's 105 year history amid plans by the company to restructure the final salary pension scheme. The Independent Democratic Union revealed that 57% of members who have voted so far have voted in favour of industrial action as a means of trying to protect their pension arrangements. Whether the company will come back with a counteroffer to avoid a potentially damaging strike remains to be seen but the problems with UK final salary pension schemes continue.
The Confederation of British Industry (CBI) has today called for a review of UK public sector pension schemes which are set to cost each and every worker in the UK an additional £330 a year to plug the ever-growing blackhole. The total cost of "unfunded" public sector pension schemes has now reached £1 trillion and is set to grow in the future. This comes at a time when many UK citizens are struggling to make ends meet and in financial difficulties themselves.
Despite the fact that Kraft Foods made various promises during the takeover of UK icon Cadbury it appears as though there will be significant changes in the short-term. The company has come under fire for giving Cadbury workers a stark ultimatum of accepting a three-year pay freeze or leaving the company's final salary pension scheme. This is just the latest in a line of controversial decisions by the American giant which has already backtracked on a promise not to close the Cadbury factory near Bristol with the loss of 400 jobs.
It has been revealed that the UK's 200 largest privately sponsored pension schemes are set to show an accumulated deficit of around £93 million at the end of March 2010 in what is another bitter blow for the UK private pension sector. Despite the fact that pension fund assets have increased by over £118 billion over the last year, there has been an increase in accounting liabilities in the region of £175 billion.
