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Why are our pensions in crisis?

Huge deficits mean around 600 pension funds are certain to collapse in the next decade, according to the Pensions Institute at Cass Business School. It says another 400 are also at risk. These funds have combined deficits of around £45 billion, a figure which could potentially overwhelm the PPF rescue fund.

Britain’s blue chips are dishing out billions more in dividends to shareholders despite a crisis in their pension funds. One investment group analysis shows that 54 companies in the FTSE 100 index have handed out £48billion to investors in the last two years despite having a £52 billion pension black hole.

Another commentator said that insufficient contributions to pension funds could leave companies with hefty liabilities which could drag on future performance and, ultimately, lead to staff receiving lower pensions if the business runs in to difficulties and enters administration.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

Other News

Will Writing, an Important Part of Expat Financial Planning

Ink pen and writingA full evaluation of your Will writing options should be an essential aspect of any expat financial services plan. If you have interests across two or more jurisdictions, whether they are business, investment, familial or lifestyle you need to be educated and aware of the implications that this can bring.

For example, when you have assets in both Britain and another country, it can be confusing to know whether you should write a single Will covering all the assets in both jurisdictions or whether you should write separate Wills: one for each jurisdiction in the language of that region/country.

Unfortunately, without expert legal and expat financial services advice, it may not be possible to answer the question with any confidence. You should consider all of the following:

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Do you have a Final Salary (Defined Benefit) UK pension scheme?

Is your final salary scheme safe?  Are you aware that many of these schemes are seriously underfunded? What is the exact deficit of your final salary scheme? Brexit and the BHS scandal have brought the pension deficit story in to the media spotlight again. However, the issues with defined benefit schemes have been brewing for some time. The UK faces a very real pension crisis with several schemes close to collapse unless serious steps are taken to address the growing problem.

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