14/1/2008 - 2007: A good year for pensions

2007 was a good year for pensions according to new research from Pension Capital Strategies, which has revealed that pension deficits improved by £27 billion over the course of last year.

Research from Pension Capital Strategies (PCS) has shown that the total deficit for pension funds in the UK's top 100 companies has fallen to £8 billion. This is from a level of £27 billion at the end of 2006.

Commenting on the findings, managing director at PCS Chris Cowling said: "Although equity markets have shown only modest increases in 2007, increases in interest rates have meant smaller pension liabilities."

He added that FTSE 100 companies have helped to reduce deficits further by paying extra contributions into their schemes.

However, Mr Cowling also noted that a number of changes to provision will have to be made throughout 2008 in order for pensions schemes to see continued improvements. Such changes include increases to life expectancy assumptions.