View more on these topics

DB pension deficits up £40bn

UK coins currency pounds growth 480The combined deficit of defined benefit pension funds in the UK now stands at £460bn, according to the latest figures from consultancy PwC.

Between July and August, deficits increased by £40bn, according to the firm’s Skyval Index, which tracks around 5,800 DB pension funds.

Together, the funds manage around £1,570bn in assets, with liability targets at £2,030bn.

PwC chief actuary Steven Dicker says: “August saw a small decrease in long-term real interest rates as measured by Government bond yields, which has led to a £60bn increase in liabilities. In contrast, assets have only grown very modestly by £20bn. Consequently, deficit has increased by £40bn.

“The deficit calculation is based on a ‘gilts+’ approach and is sensitive to even modest market movements. Compounding with the uncertain economic and political climate, the deficits calculated on this basis are likely to remain volatile.”

The deficit is lower than at the end of 2016, when it stood at £560bn. £40bn was erased from the deficit between June and July, its third consecutive monthly decrease.

DB funds end 2016 with £560bn deficit

Changes accounting for reduced life expectancy projections also led to a drop in the deficit measure of £10bn around May.

Recommended

1

Steve Webb: DB will be ‘dead’ without defined ambition

Pensions minister Steve Webb has warned defined benefit schemes will be “dead” unless the Government drives through reforms to reduce the risk borne by employers. The Government is currently assessing how it can ease the financial and regulatory burden placed on firms which want to offer DB pensions as part of its “defined ambition” reform […]

Deficit figure for defined-benefit plans surges to £10bn

Companies running defined-benefit pension schemes saw their combined deficits balloon by more than £10bn in April. Pension Protection Fund analysis shows the combined deficits of the 6,432 DB schemes potentially eligible for entry into the lifeboat scheme rose from £206.2bn at the end of March to £216.8bn at the end of April. The April 2012 […]

1

Openwork rivals SJP after adviser numbers increase

IFA network Openwork has passed the 3,500 adviser mark. The 3,521 total is an increase of 17 per cent on the same time last year, and adviser numbers were up in both Openwork and protection only subsidiary Owl Financial. Openwork is the latest large network to report a significant increase in adviser numbers. The network […]

Funeral-Flowers-Coffin-Life cover-2013
9

FSCS warns consumers over funeral plan coverage

Lifeboat fund the Financial Services Compensation Scheme has warned consumers that they may not be able to claim money back from the fund if their funeral plan provider goes bust. In a post on its website yesterday, the FSCS said that there were only “limited circumstances” in which it could pay out, and that it […]

Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. 460Bn, The schemes are being ripped apart by the impact of Transferring out, and therefore not recouping the mortality benefit, plus, The on going contributions towards the Protection Scheme, The industry must be closed down, or is it so big a problem its being kicked down the road. The Law set down by parliament is being obfuscated, So Add this figure to the “Quantify Easing” national debt and hey ho, we really are in the poo!!

  2. DB schemes have always been in an ever decreasing circle …. people living longer, people retiring earlier, staff attrition greater than increase’s, then added to market fluctuations and low yields and huge costs.

    Last time i saw a picture this bad was when Baldrick painted “his family and other friends”

Leave a comment