The UK government has introduced new rules stating that businesses offering final-salary pension plans must switch to lower-risk investments from October. These pension plans pay workers a sum based on their final or average salaries, rather than the amount they contribute. However, with around 6,000 UK businesses still offering these plans, employers are left facing a black hole of up to £34bn ($45bn) to top up their final-salary pension schemes. Pension consultant LCP warns that 200 companies could become bankrupt if they have to meet these requirements. Michelle Wright, partner at LCP, has called for more time for employers to adjust to the new rules.
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