Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

UK PENSIONS ARE AT RISK LIKE NEVER BEFORE FOLLOWING BREXIT

UK pensions face an unprecedented level of risk following the Brexit vote, warns the boss of one of the world’s largest independent financial advisory organisations.

deVere Group’s founder and CEO, Nigel Green, is speaking out as several contributing factors combine to negatively impact savers’ retirement funds.

Mr Green comments: “UK pensions face an unprecedented level of risk following the Brexit vote.  Those with UK pensions must be made aware that many of their hard earned savings are now in the eye of the perfect storm following the UK’s historic decision to leave the EU.”

 He continues: “There are four key factors that could seriously derail people’s retirement plans.

“First, gilt yields have reduced considerably since the Brexit vote and this has driven up transfer values.  This is good news for those wishing to take money out of the defined benefit scheme, but these larger pay-outs put extreme further pressure on the pension schemes themselves – many of which are already woefully underfunded.

“As more and more individuals seek to secure a transfer, the more likely it is that schemes will run into liquidity problems and could seek to freeze transfers altogether.”

“Second, these falling gilt yields will further drive up pension deficits –and this is the last thing they need.  It was widely reported last week that the UK’s pension funding hole has hit a record high of £935 billion.  This is likely to grow and will soon reach a trillion.

“The weight of these deficits brings into question the very survival of many company pension schemes and in order to survive they will need to make drastic changes to the terms of employees’ pension schemes.

“Of course, there is the Pension Protection Fund (PPF), the government’s lifeboat fund, but this is already close to sinking.  It simply isn’t in a position to handle any further high-profile collapses.”

Mr Green goes on to say: “Third is the downturn in the UK economy after the Brexit vote.  With some experts now forecasting a possible recession, it will become more and more difficult to fund pension schemes.  Many companies will find the true cost of operating them increasingly prohibitive.

“And fourth, the value of the assets that the schemes invest in and hold is likely to depreciate due to the economic downturn.  For instance there are real and justified concerns over a cooling property market and the banking and travel sectors, with companies across many different industries issuing profit warnings.

The deVere CEO concludes: “Brexit has helped create the worst of all worlds for pensions – and the true damage to pension schemes is not always immediately apparent as most schemes only carry out a full valuation every three years. As such, the ramifications of Brexit on pension schemes will only truly be felt over a period of years and by that point schemes may have already gone beyond the point of no return.

“Now more than ever savers must ensure they are properly diversified to mitigate the increasing threats to their retirement funds.”