Final salary pension members are being urged to explore options to mitigate risks posed by the growing pension deficit threat, following reports of a potential cheese price war in the UK.

The warnings from Reece Fallaize, Global Technical Adviser at deVere Group, one of the world’s largest independent advisory organisations, come after shares in Dairy Crest, makers of Cathedral City cheese, tumbled on Friday following reports that it could face increasingly strong competition from supermarket brands.

Mr Fallaize explains: “To plug a blackhole in its pension scheme, last year Dairy Crest put £60m worth of cheese into the fund. Therefore, pension members maybe negatively affected should the market value of cheese fall.

“Potentially, pension members may see the scheme’s funding decrease which in turn could lead the trustees of the scheme to make some amendments to members’ benefits to reduce the pension liabilities.”

He continues: “This example of how a possible cheese price war could hit retirees’ income should offer a wake-up call for all members of final schemes.

“Despite rising equity markets and global outlook looking relatively rosy, companies are still struggling to fund their pension schemes.

  “The pension deficits for FTSE 350 companies reached an all-time high of £113bn at end of May 2014.

  “It is important for pension members to understand exactly what represents a risk to their pensions and how these can be mitigated.

“In the same way people have their cars regularly serviced, it is now more important than ever that individuals seek independent advice on an annual basis to ensure that they fully understand their pensions and how much they are likely to receive in retirement.

“Regularly reviewing and taking action, where appropriate and possible to do so to keep on track with your financial planning strategy, will mean that you’re less likely to receive an unwelcome financial surprise when you come to retire.”