Pensions 'fall into in the red'

06/08/2008

UK pension funds fell £41 billion into the red last month - a drop which might bring an end to more generous final-salary schemes.

In worrying news for savers, insurers Lane Clark & Peacock found that the overall net deficit of the pension funds held by the biggest 100 companies based in the UK had grown from a £12 billon overall surplus.

Most pension savings invested in stocks and other financial products, which means that many have lost a lot of their value over the past year as stock exchanges were hit by the credit crunch.

Independent pensions expert Ros Altmann said: "It is inevitable that employers will keep on closing schemes to both new and existing members, especially in the face of so much uncertainty around funding and costs. This is the final chapter."

Lane, Clark & Peacock partner Bob Scott added: "UK pension schemes of FTSE 100 companies enjoyed a brief period of surplus until early in 2008.

"Events of the last year demonstrate the importance of assessing and managing pension risks and being prepared to take opportunities when they present themselves."

Tags; Retirement Money Problems,

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