Company pensions 'vital for retirement'

Tue, 26 Aug 2008

Saving into a pension scheme is vital if people want to enjoy a good standard of living after their retirement, it is being claimed.

The National Association of Pension Funds (NAPF) maintains that company pensions are the way to best prepare for retirement.

"It can never be emphasised enough that members of company schemes enjoy tax relief on their contributions as well the benefit of any employer contribution," said Michelle Lewis, senior policy adviser of the NAPF.

Lane Clark and Peacock LLP, a European consultancy firm, revealed in its Accounting for Pensions report released this month that UK pension schemes of the FTSE 100 companies had a net deficit of £41 billion mid-July compared to a £12 billion surplus in July 2007.

The report found that the current economic downturn has caused the largest 12 month swing in FTSE 100 funding levels since the introduction of modern pensions accounting methods in June 2002.

It states the situation could have been worse but the IAS19 accounting standard had a "cushioning" effect on balance sheets.
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