Carillion’s collapse could highlight a much wider problem for UK pensions
Carillion’s pension savers will see a minimum of a 10 percent drop in their retirement income, but more broadly, the collapse of the firm should be a “wake-up call” for every U.K. pension saver, according to a financial consultancy.
“The collapse of Carillion further underscores the colossal black hole in many defined benefit pension schemes. For instance, the combined deficit of the FTSE 350 firms has now reached 70 percent of their profits,” Nigel Green, the chief executive and founder of deVere Group, told in CNBC via email. A defined pension scheme in the U.K., also known as a “final salary” pension, normally depends on an employee’s length of service and their earnings at retirement.
The British multinational firm Carillion, which focuses on government contracts, entered into compulsory liquidation on Monday after its creditors refused to lend more money to the debt-laden firm. Shares of Carillion stopped trading as a result and its biggest creditors, including HSBC and RBS, traded lower on the news.
Read more HERE: CNBC
