Interest rate rises could impact sponsor covenants

Trustees urged to evaluate the sponsoring employer’s financial position

Martin Richmond
clock • 1 min read
Interest rate rises could impact sponsor covenants

Lane Clark & Peacock (LCP) has warned that whilst rising long-term rates are generally good news for scheme funding levels, trustees should carefully consider the impact on their scheme’s sponsoring employer.

The warning comes after the Bank of England's decision today (22 September) to raise interest rates to 2.25%. The increase has raised fears that employer covenant may be weakened, depending on t...

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Martin Richmond
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Martin Richmond

Reporter at Professional Pensions

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