Brentwood, United Kingdom (PressExposure) November 14, 2009 -- Substantial concern this month in light of the announcement that the Pension Protection Fund is running an annual deficit of Â£1.23 billion, a staggering Â£517 million up from last year.
The governmentâs Pension Protection Fund â their âpension life raftâ - was set up to help members of failed pension schemes, but the significant rise in failed schemes and the spiralling financial burden taken on board by the Fund were not foreseen, leaving the life raft crying out for its own rescue party.
So what does the future hold for the nationâs retired population?
Â£600 million is all thatâs coming into the Pension Protection Fund, which means either the scheme needs additional finance from the government, or higher levies on UK companies are required. The latter of course is exceptionally dangerous and could threaten the recovery of the UK economy. However, the government hardly has an overflowing cup of capital to share.
Other methods of funding retirement need to be seriously considered and, says Geoff Charles of award winning equity release specialists Bower Retirement Services (http://www.brsequity.co.uk), the government needs to put some weight behind them. âThere are too many people heading for or just arrived at retirement facing significant financial strain due to failed pension schemes. Other sources of income need to be looked at and those â like equity release - that are safe and regulated simply have to be endorsed so that they become more widely accepted and understood. Your home can be your pension, or at the very least can top it up. Itâs so simple: pay into your property then let your property pay you.â
2009 has seen over 100 new pension scheme claims, forming a Â£1.3 billion combined deficit. It is obvious that the two options put forward so far are riddled with flaws and that something innovative needs to be done to solve the growing problem being faced by the retired population.