Leading UK firms carry £96bn in pension deficits

by Gill Montia

Story link: Leading UK firms carry £96bn in pension deficits

The pension funds of the UK’s leading companies have seen a huge rise in deficits over the last 12 months.

A new report by consultants, Lane Clark & Peacock (LCP), based on the FTSE 100 stock index, concludes that the combined deficit rose to £96 billion last month, compared with total deficit of £41 billion a year earlier and a surplus of £12 billion in July 2007.

In addition LCP’s research reveals that only three of the FTSE top 100 companies still offer final-salary schemes to new members: Cadbury, Diageo and Tesco.

The firm warns that further closures of final salary schemes are only to be expected.

In related news, the Pension Protection Fund (PPF) recently reported that the aggregate funding position (total assets minus total liabilities) of the UK’s 7,400 defined benefit schemes had worsened.

At the end of June the deficit stood at £200.1 billion compared to £179.3 billion at the end of May.

The number of schemes in deficit in June 2009 stood at 6,461, up from 6,389 in May and representing 88% of total UK defined benefit schemes.