UK pensions 'under pressure' despite affordability
Britain's pension system has come sixth in a list of 25 European nations in a recent report by Aon Consulting comparing the overall long-term health of the pension system in those countries, but could face difficulties in the future.
Britain came bottom of the list comparing the state pension with average wages in the report, the Times notes, while it ranked highly for affordability and sustainability - coming third - as a result of the frugality of the system.
Donald Duval, chief actuary at Aon, told the Guardian that expenditure on state pensions will increase as populations age in the EU, with a greater focus on personally funded pension plans.
"Countries like the UK, with a tradition of strong funded pensions through corporate defined benefit schemes, will see their position coming under pressure as companies withdraw from these schemes because of their high cost and the unfavourable regulatory environment," he told the paper.
Last week, Aon warned companies to avoid complacency as they move into 2007, despite a recorded reduction in pensions deficits in 2006, stating that some companies will suffer a deterioration in pension scheme funding over the year.
The consulting firm predicted a wide range of performances from differing pension schemes in 2007.
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