3 million in pension peril

AROUND three million workers with final-salary pension schemes have just a 50-50 chance of getting a full payout, a powerful pensions body has warned.

increasing life expectancy, low interest rates and weaker investment returns have seen the total deficit for final- salary pension schemes balloon to more than £400 billion, says the Pension and lifetime Savings Association.

the soaring costs of honouring pension promises have seen firms such as Bt try to take drastic measures to lower bills.

the telecoms business is going to court to try to water down the benefits for thousands of staff with final-salary pensions.

But tom Selby, of pensions and investment firm AJ Bell, says: ‘Savers will understandably be shocked and worried by this, but employees shouldn’t panic.

‘the Pension Protection Fund offers a substantial safety net.’