UK 'crisis easing'
The employers’ body the Confederation of British Insurers(CBI) says companies’ pension deficits under the FRS17 accounting measure have fallen by £60bn (E89.7bn). The CBI said the figures show the pension crisis is “still serious but easing”.
“Rises in the stock market and increased company pension contributions have wiped some £60bn off the UK pensions fund deficit,” the CBI says.
A CBI report found that the deficit was around £100bn at the end of 2003 – down from an estimated £160bn in June. Saying that this was “hugely encouraging”, it adds: “The overall deficit remains enormous and is still a major business concern.”
It said firms will still have to make additional contributions averaging £6bn a year over the next three years - half the amount estimated a year ago.
The CBI says that constraints on business investment caused by pensions funding problems were likely to moderate in 2005 and 2006.
“Amid all the bad news about pensions, these findings give reason for a little cautious optimism,” says Ian McCafferty, chief economic adviser at the CBI.
“Firms are still having to make sizeable financial provisions to make up the shortfalls in pensions schemes but the problem is more under control.