Page last updated at 10:52 GMT, Tuesday, 11 August 2009 11:52 UK

Pension deficits improve in July

Barclays staff lobby shareholders in August 2009
Workers from Barclays bank lobby Barclays shareholders at their AGM.

The combined deficit of the UK's private sector final salary pension schemes shrank in July, figures show.

The Pension Protection Fund (PPF) said the deficit fell from £200bn at the end of June to £158bn at the end if July.

The figures from the PPF cover 7,400 pension schemes, 85% of which were showing a deficit.

It said the improvement was mainly due to a sharp rise in share values during July, which had driven up the value of the pension schemes' assets.

"During the month of July there was a 3.8% increase in assets due to rises in both UK and global equities," said the PPF.

Ballooning deficits have been one reason behind the revived trend this year for employers to close their final salary pension schemes to existing members, not just new joiners.

Among firms that have done this, or have threatened to do so, have been Barclays, Fujitsu, Morrisons, Dairy Crest and IBM.

New retirement rules

Separately, a survey has suggested that three-quarters of workers are unaware that the law changes next April to prevent people retiring before the age of 55.

The survey, for the pension firm Aon Consulting, said only a third of those now aged between 45 and 54, and thus most likely to be affected by the change, knew about it.

Only 46% of those questioned knew that the state pension age for women was also going up to 65, rising gradually between next April and 2020.

"It is disappointing, but not entirely surprising, that so few people are aware of changes to the minimum retirement age and the state pension age," said Helen Dowsey of Aon Consulting.

"We have seen massive legislative changes to pensions and unprecedented volatility in pension investment: the workforce needs to forward-plan for retirement to understand and respond to these changes and market conditions," she added.

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