Monarch’s downfall is a warning to pension savers
As I recently told The Express, one of the UK’s biggest nations newspapers, the recent collapse of Monarch Airlines is a red flag that must not be ignored by individuals nearing retirement.
Indeed, since one of the UK’s largest holiday airlines went bust at the beginning of this month, coupled with accusations of asset-stripping, yet another pension fund is now in question.
Reports say that the pension – which is now within the government’s rescue fund, the Pension Protection Fund (PPF) – could have been left short when it went under in 2014.
Of course, the PPF, as a resource, is invaluable. However, as UK final salary schemes now have a concerning £1.6 trillion of liabilities, and a £224 billion deficit, with the problem only worsening, it could be reasonably argued that the PPF is certainly feeling the pinch.
There are only so many high-profile collapses it will be able to manage.
The problem is that a large number of firms are still fighting to fund their pension schemes, despite rising equity markets and a relatively favourable global outlook.
As such, it is imperative that pension members comprehend exactly what constitutes risk to their pensions, and know how such risks can be circumvented.
Indeed, it’s more important than ever before for people to seek professional, independent financial advice on a regular basis, to ensure they are fully aware of what’s happening with their pensions and how much they can expect to receive when they reach retirement. In the same way as going for a yearly medical check-up, pension reviews should also be given the same level of importance.
By undertaking frequent reviews and taking appropriate action on their financial planning strategy, individuals will be much less likely to suffer any unwanted surprises on retirement.
Now is most definitely the time for savers to make sure they are sufficiently diversified so as to mitigate mounting threats to their pension pots.