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Blue-chip pension schemes receive record £17.5 billion contribution

The UK's top 100 blue-chip companies last year pumped a record £17.5 billion into their struggling pension schemes which allowed the deficit to be almost halved, currently standing at around £51 billion when taking into account income and investment gains. Records indicate that Royal Dutch Shell injected around £3.3 billion into its own flagging scheme with the likes of Lloyds bank, Royal Bank of Scotland and Unilever increasing pension fund contributions to around £1 billion.

While there's no doubt that the additional pension fund contributions have made a difference to the standing of various UK final salary pension schemes, there is still much work to be done. There is also growing concern that additional pension fund contributions will begin to impact upon company cash flow, inward investment as well as payments to shareholders. If payments to shareholders of companies such as BP, and other major companies in the UK, are reduced or suspended then this will impact upon income for the UK's main pension schemes.

It will take some time for the UK pension fund arena to recover from the downturn in share prices and the reduction in investment returns over the last few years. Whether or not the UK government is in a position to reduce or loosen tight regulations with regards to pension fund liability calculations remains to be seen.

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