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Uks Top Pension Funds Lose 96billion

8 October, 2015



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I heard a BBC report a couple of days ago that claimed that the UK’s top 100 companies lost a combined total of 96 billion pounds from the value of their pension funds. Further digging around lead me discover the full source of this information and it makes for very interesting reading! Here is the introductory part of the article to give you a flavour and decide whether you want to read it or not:

The financial crisis has plunged FTSE 100 companies’ UK pension schemes into a £96 billion deficit, more than double the £41 billion estimated a year ago, according to the 16th annual Accounting for Pensions report from Lane Clark & Peacock LLP (LCP), a leading firm of consulting actuaries.

The deficit, which is calculated using data from mid-July 2009, is the largest recorded shortfall recorded under the IAS19 accounting standard currently used for pension schemes.

If you want to read it all, you can find the full article, published on the website of Lane, Clark and Peacock, Actuaries and Consultants here.

What surprises me though is not the actual amount of the deficit or the fact that employers and other pension fund providers are waking up to the fact that they are not going to be able to keep paying people well into retirement. What surprises me is the fact that the general populace in the UK still bemoan the losing of pension rights and benefits, yet don’t seem to want to do anything about it! Most people view share dealing as risky. I know I do! But for some reason it seems okay to hand over your hard-earned cash to a faceless nameless individual or group of individuals (those supposedly VERY clever people in the fund management industry in the City!) and expect them to do any better than you could throwing darts at a dartboard as a stock selection strategy.

I admit I do pay into my employers pension as they match my contributions up to 2%. It’s free money as far as I’m concerned (although I am worried about it’s true value when I come to take the benefit) and I would be silly not to take it. However I am not relying solely on pensions to provide for me and my family in my retirement. I look to other forms of investment, which people deem even riskier, like investing in overseas off-plan property.

Well I’ve done my due diligence on overseas off-plan property investment and I can say with confidence that the strategy and business plan the developer is employing is far safer than anything the UK Government (for my state pension) or my current employer can offer.  In about seven years time I should be able to officially “retire” on a “pension” of around 80,000 pounds a year (before tax!). Not bad for someone who’ll be aged only 50.

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Tagged with:Accounting Standard • Actuaries • Annual Accounting • Bbc Report • Business Plan • Consulting Actuaries • Dartboard • Due Diligence • Financial Crisis • Flavour • Free Money • Ftse 100 • Fund Management Industry • Peacock • Pension Fund • Pension Funds • Pension Rights • Pension Schemes • Pension Shortfall • Populace • Property Investment • Selection Strategy • Shortfall • State Pension • Stock Selection • Throwing Darts • Uk Government • Uk Pension

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