A government scheme to guarantee the pensions of millions of workers is in danger of collapsing because of the huge growth in corporate pension shortfalls.
The Pensions Protection Fund was set up as a “lifeboat” scheme to step pay up to 90 percent of the pensions of workers whose former employers have gone bust.
But latest figures show a record £155 billion deficit in corporate pensions across Britain. This figure is three times larger than three years ago. Some 86 percent of corporate pension schemes are now underfunded.
The shortfall combined with the worsening recession could tip a record number of companies into bankruptcy.
This threatens to overwhelm the government protection scheme – leading to ordinary workers being robbed of their pensions contributions.