View more on these topics

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 combined deficit figure represents an increase of more than £200bn compared with the £8.2bn deficit reported in April 2011.

Total assets of the schemes were worth £1,031.4bn and total liabilities were £1,248.2bn. There were 5,228 schemes in deficit and 1,204 schemes in surplus.

The PPF says declining asset values and gilt yields are primarily to blame for the worsening deficit position of DB schemes.

Over the past year, 15-year gilt yields have slumped by 131 basis points while the FTSE All-Share index fell by 5.4 per cent.

The Pensions Regulator recently confirmed it will allow some employers to pay back pension deficits over a longer period of time.

Hargreaves Lansdown head of advice Danny Cox says: “If the PPF runs into funding difficulties, it has a number of options, including removing indexation on compensation pension payments. Backing by the Government would be unpopular and expensive for the taxpayer.”



MM Leader: D2C and the RDR

F&C became the latest asset manager to declare its RDR intentions this week, predicting growth in both self-directed sales and multi-manager. It is fair to say no one really knows the extent to which the RDR will ultimately reshape the retail landscape – ask 10 different experts and get 10 different answers, often coloured by […]


Lawson: 10 reasons why the NAPF’s code will not work

Today, the National Association of Pension Funds published draft proposals for an industry code of conduct for pension charges. Here, Standard Life head of pensions policy John Lawson (pictured) explains why he thinks the code will not work in practice – and what policymakers and the industry can do to make charges more transparent. 10 […]

Hearthstone receives approval for Paif launch

Hearthstone Investments has received FSA approval to launch its UK residential property authorised investment fund. The TM Hearthstone UK residential property fund will be soft-launched in the summer with the full roll-out planned for September. The fund is structured as a Paif, a tax-efficient investment vehicle that allows funds to pay gross dividends from property […]

The curse of long-term cash

Trevor Greetham, Head of Multi Asset at Royal London Asset Management, reveals why clients should be seriously concerned when short-term holdings of cash turn into a long-term investment. There is nothing wrong with holding wealth in the form of cash on a short-term basis. For many people capital stability is important and access to ready cash […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm