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.
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. … Find out more
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