Concerns over growing deficit at pensions lifeboat

THE future of the government's pensions lifeboat has been questioned after its deficit more than doubled in a year.

In its annual report, the Pension Protection Fund (PPF) yesterday said its deficit rose from £517 million to £1.23 billion in the year to March. Some 63 pension schemes were accepted into the PPF over the period and a further 342 schemes are currently being assessed. More than 100 schemes and over 30,000 members had transferred to the PPF by March, with 12,723 members receiving compensation.

Laith Khalaf, pensions analyst at Hargreaves Lansdown, said the size of the deficit cast doubt on the PPF's sustainability.

"Certainly it will mean that final-salary schemes will have to pay higher levies in the future when the PPF takes its recession gloves off," he said.

"Possibly it may prompt a rethink of the compensation on offer to members."

But PPF chairman Lawrence Churchill said he was unsurprised by the high figures. "More importantly, the pension protection framework has proved resilient in testing times and our confidence that we can continue to pay our members the compensation they are due is undiminished."