No wonder our pensions are in CRISIS

Revealed: FTSE giants with vast pension black holes are still handing billions to shareholders

BRITAIN’S blue chips are dishing out billions more in dividends to shareholders despite a crisis in their pension funds.

analysis by investment group AJ Bell shows that 54 companies in the FTSE 100 index have handed out £48bn to investors in the last two years – despite having a £52bn pension black hole.

and 35 have been paying out more in dividends than the total size of their pension deficit.

Oil giant Royal Dutch Shell, for example, last year handed £8bn to shareholders despite figures showing it had a £6.7bn funding gap in 2014.

Drug company Astrazeneca had a £1.9bn deficit in 2014 but threw off £2.4bn of cash last year. Fellow pharmaceuticals firm GLAXOSMITHKLINE handed out £3.9bn in 2015, despite a £1.7bn gap for the previous year.

AJ Bell investment director Russ Mould said: ‘Insufficient contributions to the pension fund could leave the company with hefty liabilities which could drag on future performance and ultimately lead to staff receiving lower pensions if the business runs in to difficulties and enters administration.’

It came as official figures revealed pension funds have plummeted almost £25bn further into the red.

Falling bond yields piled pressure onto defined benefit pension schemes, which are meant to guarantee a solid income when members retire.

It means the 5,945 large schemes watched by the Pension Protection Fund (PPF) had a combined deficit of £294.6bn at the end of May – £24.4bn higher than a month earlier.

today, 4,864 of the schemes watched by the PPF are in deficit, but PPF bosses insist their scheme is robust and has reserves of £3.6bn.

But the figures highlight the extent of Britain’s pension crisis after fears for failed retailer BHS, which has a £571m black hole. and they come as a separate study reveals some of Britain’s biggest companies are paying shareholders a dividend bonanza despite huge deficits of their own.

the Pensions Regulator has issued a similar warning in the past. andrew Warwick-thompson, executive director of regulatory policy, said: ‘It is important that employers treat their pension scheme fairly. We expect trustees to ques- tion employers’ dividend policies where debt recovery contributions are constrained.’

experts have warned Britain faces a looming pension crisis.

Huge deficits mean around 600 pension funds are certain to collapse in the next decade, according to the Pensions Institute at Cass Business School. It says another 400 are also at risk.

these funds have combined deficits of around £45bn – a figure which could potentially overwhelm the PPF rescue fund, which acts as a backstop in cases of disaster.