Pension risks

The recent damnation of the directors of the collapsed construction giant Carillion by the Work and Pensions, and Business, Energy and Industrial Strategy Committees of the House of Commons merely highlights the corporate greed by those directors.

But the collapse of Carillion affected so many employees, sub-contractors and those who have not yet accessed their pension pot from the Carillion Pension Scheme.

The devastating consequences of this collapse will hopefully be short term for most of the employees. However, for sub-contractors the pain could be long lasting, with many put on the brink due to Carillion’s nonpayment of monies due.

Another body affected is those currently in the Carillion pension scheme who have not yet released any income from their pot and have been informed that access to the Carillion Pension Scheme is currently frozen due to the collapse, affecting many, especially those over 55 who would have had automatic access to their pots.

Furthermore, there is no guarantee of the Government’s Pension Protection Fund, which is supposed to guarantee 90 per cent of expected pension, having sufficient funds to meet the deficit the Carillion Pension Fund currently has.

There are no certainties in life, but this case once again

exposes the risks of joining a workplace pension scheme with no guarantees, yet the Conservative Government has introduced “auto enrolment” into workplace pension schemes with no guarantee more Carillion cases will not follow or that pension contributions are being ringfenced.

The one security net for most is that the state pension is always there, albeit many are having to wait a bit longer to receive it – but for how long, is the auto enrolment merely the prelude to the Government doing away with state pensions as we know it?