FTSE 100 Firms Pension Deficit Soars

Feb 22, 2017 | Retirement Planning


According to LCP FTSE 100 Firms Pension Deficit Increases Considerably in the last Twelve Months

In its annual report, LCP has highlighted that pension deficits among FTSE 100 firms have increased over the last year. As of the end of July, the deficit had reached the figure of £45 billion. A £ 21 billion increase on the 2015 figure. This gap has widened further over the last few weeks to £63 billion.

Current thinking is the Brexit vote has lowered the value of bond yields, where most company pensions are invested. As such this has impacted on FTSE 100 pension deficits. The Bank of England’s decision to cut interest rates has also negatively impacted the value of bond yields.

Conversely, the falling value of the pound has meant overseas investments have performed better.

The LCP report states: “FTSE 100 companies seem to have ridden out Brexit reasonably well, reflecting the level of protection that many put in place against fall interest rates.”

Recently it was highlighted that although many companies operated a pension deficit, shareholder payouts were still high, and few did little to address the problem. BHS and Tata Steel are two good examples of what can happen in extreme cases. Now more than ever independent financial planning advice is essential to avoid your pension falling into this trap.

Protecting your Pension against Deficits

It is not easy to protect your pension against deficits given that most companies seem to have one. That said, good financial planning advice can invest the money more prudently than in government bond schemes which appear to be at the mercy of factors beyond our control.

I have vast experience in making good investment decisions where pensions are concerned and my services are award winning. With more and more companies operating a worsening deficit, using my knowledge and know-how to get the best pension possible, is a good move.

Many companies are closing their pension schemes so it is important you take control of yours. Click here and complete the CALL BACK SERVICE form. Make sure your hard earned cash isn’t part of a blackhole.

Source: BBC

For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at [email protected]

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