Concern has been raised by the CBI (Confederation of British Industries) about final salary pension schemes and the impact on the UK in recession.
The recent report, surveyed the management of the UK‘s largest companies about pensions generally. The concern was raised about the costs to companies as many schemes have to contribute larger amounts each year into the company pension schemes. It is feared that this will have a large impact on companies as the UK comes out of recession.
The survey found that over 30% of businesses were expecting an increase in the costs to their pension schemes. A third of the companies surveyed felt that the schemes had an impact in their ability to operate.
John Cridland, CBI deputy director-general, said: 'During a recession it is vital that firms are able to restructure and realign to strengthen the business and prepare for future growth.
'However, the high and unpredictable cost of running final salary pensions is having far-reaching and damaging effects on UK competitiveness and the wider economy.'
The report also re-confirmed the view of many financial advisors. More employees may have to contribute more to existing arrangements if they wish to remain members of their scheme. In some cases employers are considering closing their final salary pension schemes altogether.
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