Final salary schemes could be finished in 3 years, experts warn
15 May 13
The combined deficit of UK pension funds increased by £20 billion in April to £256.6 billion, and experts have warned that final salary pension schemes could be finished within three years.
Final salary schemes are known for being incredibly expensive to run due to increased life expectancy, poor fund performance and low gilt yields.
What’s more, the single-tier pension soon to be introduced will add more to the cost of pensions for employers.
The Pensions Protection Fund (PPF) has warned that 5,142 of the 6,316 final salary pension schemes running in the UK were now in deficit, and 1,174 were in surplus. Across all schemes there were assets worth £1,130 billion compared with liabilities of £1,387 billion.
David Smith, wealth management director at BestInvest, told the Guardian that “the death knell is sounding now”.
"I don't envisage that there will be many, if any, final salary schemes open to new employees post 2016," he warned.
15 May 13 | Final salary schemes could be finished in 3 years, experts warn
The combined deficit of UK pension funds increased by £20 billion in April to £256.6 billion, and experts have warned that final salary pension schemes could be finished within three years.
25 Apr 13 | Equitable Life Policyholders
The Government is in danger of missing its March 2014 target to pay all traceable policyholders who lost out following the collapse of Equitable Life.
22 Apr 13 | MPs call for single pensions regulator
20 Apr 13 | Upper Tribunal confirms pension fund entitled to tax credits but out of time to bring statutory claim
The Upper Tribunal (tribunal) has upheld the decision of the First-tier Tribunal that an exempt UK resident pension scheme (BTPS) was entitled, in respect of in-date claims, to a payable tax credit for dividends paid by UK companies out of foreign income (FIDs) and for dividends paid by overseas companies. The tribunal determined that BTPS had enforceable Article 56 (free movement of capital) rights. As the UK rules stood, shareholders could be discouraged from investing in non-UK resident companies or UK resident companies with substantial non-UK investments, breaching Article 56.
