Pensions Crisis

Pensions crisis:

96% of final salary schemes are doomed...
OAPs worst off in Britain...
and state funds withering on the vine

The extent of the pensions crisis was laid bare yesterday by a 'triple whammy' of worrying reports.

Almost all blue-chip companies now admit their final salary schemes are 'unsustainable', according to a major survey.

At the same time, two separate studies said that Britain's state pension was the worst in the Western world.

The reports confirm that private sector workers face a bleak future, with the state handout withering on the vine and dozens of generous company schemes on the verge of being wound up.
However, most gold-plated public sector schemes - funded by the taxpayer - remain untouched.
Almost 90 per cent of state employees receive final salary pensions, compared with just 16 per cent in the private sector.

Opposition parties and campaign groups said last night that the three studies provided yet more evidence of the growing crisis in pension provision.

Liberal Democrat work and pensions spokesman Lord Oakeshott said: 'Gordon Brown has been in charge of our pensions for the past 12 years.

'He should be ashamed of these shocking statistics, showing Britain's miserable means-tested state pension right at the bottom of the world pension league.'

Prior to 1997, Britain's state pension pot was in relatively good health. But in one of his first acts as chancellor, Mr Brown scrapped the tax relief on dividends paid into pension funds, costing them around £100billion.

It triggered the shutdown of final salary schemes covering hundreds of thousands of workers.
Yesterday's 'triple whammy' of bad news included:

A survey of 1,000 blue-chip companies by Pricewaterhouse Coopers, which found that 96 per cent believe their final salary schemes are unsustainable.

A study by the influential Organisation for Economic Cooperation and Development (OECD), placing Britain at the bottom of a 'pensions' league table for those yet to retire.

Research by the UK-based Office for National Statistics, which confirmed just how little the state pension is now worth.

The House of Lords also released a report yesterday criticising Chancellor Alistair Darling's Budget for removing a series of tax breaks on pension contributions.

Tory pensions spokesman Theresa May said: 'This is yet more bad news for cash-strapped pensioners who are the innocent victims of this recession.'

Some 16 per cent of the firms which responded to the PWC survey had already closed their final salary schemes to current members.

More:
http://www.dailymail.co.uk/news/article-1195092/Pensions-crisis-96-final-salary-schemes-doomed--OAPs-worst-Britain--state-funds-withering-vine.html