17:55 19 March 2013
Pension Protection Fund is designed to help members of UK private sector defined benefit schemes which have insufficient assets and whose corporate sponsor fails.
When this happens, the fund will take over the pension scheme assets and will become responsible for paying former members of the scheme.
The problem is, with the ongoing recession, more and more businesses are now going into liquidation. Each time one pension scheme closes down, it would mean one less member contributing to PPF assets and one more needing a payout.
PPF now expects to pay out £300million a year. If the economy doesn’t improve anytime soon and if the fund continues to pay at that rate for more years to come, the fund will soon dwindle.
This means that none of us can no longer rely on the state to pay decent amount of pension that we can use to have comfortable retirement. Because of this, it’s important that we start making plans for ourselves.
There are different ways to plan for your retirement. The keys here are starting as early as possible and identifying the investment vehicles that will offer you the highest return of investment.
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