to constantly learn, even if people think you are stupid or foolish”
Carillion liquidation news should act as a wake-up call for UK pension savers
As we wake up to news this morning of Carillion being forced into compulsory liquidation, this should trigger alarm bells for pension savers all over the UK.
Being one of the largest construction companies in the country, Carillion employs more than 20,000 people in the UK, and has several high-profile public sector contracts, but today said it has “no choice but to take steps to enter into liquidation with immediate effect”.
As I was quoted as saying in the Daily Mail, as well as other news outlets, this news should set alarm bells ringing for pension savers across Britain, as now the outcome of another major pension fund has been put into question.
Indeed, the Pension Protection Fund (PPF) is now taking over payment of Carillion’s retirement scheme members. However, it can be argued that individuals who are as yet to draw their Carillion pension, could suffer a fall of at least 10 per cent in their retirement income.
Quite a drop.
Of course, the PPF provides key, valued support. That said, with the massive deficit blackhole in UK final-salary pension schemes, just how much more can the PPF sustain?
As such, this news should act as a serious wake-up call for pension savers. This is predominantly due to the fact that regardless of rising stock markets and a positive global economic outlook, many organisations are fighting to fund their pension funds for numerous reasons.
One such reason is falling gilt yields which have driven up transfer values. Of course, this comes as good news for people wishing to draw money out of a defined benefit scheme, but large pay-outs are piling additional pressure on the pension schemes – a large number of which are gravely underfunded.
Consequently, to circumvent any unwanted shocks and surprises, it’s crucial that pension savers undertaken regular, thorough reviews of their pensions so as they’re fully aware of any risks to their retirement income.
Indeed, pension savers have put money aside throughout their working lives to be able to enjoy the retirement they desire and deserve. Therefore, they must ensure they are sufficiently diversified to avoid any potential risks to their treasured retirement income, as well as make the most of any opportunities.