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Welfare Reform on the Web (January 2009): Pensions - UK

Pensions plan on track despite credit crisis

N. Timmins

Financial Times, Dec. 8th 2008, p. 4

Starting in 2012, millions of employees are set to be automatically enrolled into a new system of personal pension accounts. If successful, the scheme could have 100bn to 150bn under management by 2050. But Royal assent to legislation, aimed at providing a pension for up to 7m people who are saving little or nothing for their old age, has coincided with the recent major falls in the stock market. This means large sums have been wiped off the value of just the sort of pension into which it is planned to recruit those millions of low to middle income earners. Tim Jones, chief executive of the Personal Accounts Delivery Authority, concedes that now is not a good time to persuade people to invest in the stock market for their old age but he is optimistic that by the time the new pension saving system is phased in, in 2012, the economy could be experiencing a new wave of macro-economic growth.

Pensions lifeboat risks being swamped

N. Cohen

Financial Times, Dec. 9th 2008, p. 1

Britain's corporate pension funds are facing mounting shortfalls that are growing so rapidly that they now threaten to swamp the government-created lifeboat designed to guarantee the retirement funds of millions of workers. New figures from the Pension Protection Fund show the total shortfall of UK underfunded company schemes - which account for 86 per cent of all final salary plans - rose to a record 155bn at the end of November.

Thousands of pensioners face cuts after firm overpaid for 30 years

A. Stratton

The Guardian, Dec. 16th 2008, p. 1 & 9

Xafinity, the company responsible for 5% of all public sector pensions may have been overpaying for 30 years, leaving thousands of former NHS staff to face a cut in their income. A total of 100,000 people are likely to be affected.

(See also The Times, Dec. 16th 2008, p. 9; The Guardian, Dec. 17th 2008, p. 11)

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