Three Million Savers With ‘Final Salary’ Pensions Have 50% Chance of Losing up to a Fifth of Their Income

New pension scheme rules challengedThree million workers with final salary pensions have a 50 per cent chance of losing up to fifth of their income because their employers have made unaffordable promises, a recent report has warned. Could you be one of them?
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FTSE 100 Pension Costs to Double Without ‘Drastic Action’, Retail Sector Pension Black Hole Widens by £6bn to Match Annual Profit

royal-dutch-shell-pension-deficitThe UK’s 100 largest listed companies face seeing their defined benefit pension costs double over the next three years unless “drastic action” is taken, according to JLT Employee Benefits.

In March this year, JLT put the combined FTSE 100 deficit at £87bn. It said only 29 companies disclosed a pension surplus in their most recent annual reports, while 59 companies disclosed pension deficits.

Royal Dutch Shell had the biggest pension liability, at £57bn, while 15 other companies had liabilities of more than £10bn.

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Sterling Plunges as Bank of England Cuts Interest Rates For First Time Since 2009, Pension Funding Gap Widens

BoE cuts interest ratesThe Bank of England has unveiled a fourpronged stimulus package designed to boost the economy and prevent a recession following the vote to leave the European Union.

Sterling tumbled and UK gilt yields dropped to fresh lows after the Bank surprised markets by restarting its money printing programme to buy government and corporate debt alongside the first interest rate cut in seven years.

Subsequently, the deficit of defined benefit or “final salary” pensions, which pay out an income linked to an employee’s final salary, jumped GBP70billion as a direct consequence of the decision to reduce interest rates by 0.25%.

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