Hannah Brenton looks at the danger caused by the shrinking pool of 'safe assets'
The Bank of England's move to increase quantitative easing by £50bn will prolong low gilt yields for a further 12 months, adding further strains on pension funding positions, experts say.
In our end-of-year round-up we asked industry spokespeople to preview the year ahead in pensions.
The aggregate deficit of UK defined benefit schemes improved by £15bn last month despite market volatility, thanks to price inflation outlook, Xafinity Corporate Solutions says.
FTSE350 companies' combined pensions deficit stood at £38bn at the end of July, down slightly from £44bn at the end of June after a volatile month.
Relying on market-implied figures for scheme inflation assumptions is a very poor way of estimating long-term risk factors, Hewitt Associates warns.
A static approach to asset allocation is bound to negatively affect pension funds' funding level, Hewitt says.