British Pension fund deficit could reach £200 billion in the next year

While financial crisis continues to hit Britain, it decayed as much as £97 billion in October and expected will become more then doubled to £200 billion in the next year. The pension fund deficit soars is due to relying too much the pension fund on the stock market. As we know, global stock markets have been slumping since the mortgage crisis in US drove market panic and even further, the contagion effect spread worldwide beyond the financial sectors. The Dow has been discounted almost 50% from October peak in 2007.

While Pension fund in jeopardy it could affect on how much pension workers will be paid. In an extreme scenario, companies will raise the retirement age to meet the shortfall. Additionally, workers may be forced to get compensation through the pension Fund Protection.

As a result, workers are also facing changing on the final salaries that will be settled when retire.

Sources :

The Telegraph: Pension fund deficits could double, economists warn, November 17, 2008 7:13PM GMT

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