UK pensions deficit at $424.4b

LONDON - BRITAIN'S private sector pension schemes recorded a deficit of nearly 200 billion pounds (S$424.4 billion) at the end of last year, as the global financial crisis took its toll on the value of pension funds, official data showed on Tuesday.

The Office for National Statistics said the funding position of defined benefit pension schemes showed a deficit of 194.5 billion pounds in December 2008. That compares with a surplus of 130.4 billion pounds in June 2007 before the onset of the credit crunch.

'In 2008 falling equity markets and bond yields led to a worsening of the funding position,' the ONS said.

The ONS reported marked changes in the types of investments made by pension funds.

In 2007, 61 per cent of pension fund assets were in corporate securities, compared with over 70 per cent for most of the 1990s.

Within that total, the proportion of UK corporate securities assets held by pension funds fell to 58 per cent in 2007 from around 75 per cent in the 1990s. In 2007, pensions invested 42 per cent of funds in foreign corporate securities. -- THOMSON REUTERS