International Finance
Wealth Management

Monarch’s collapse is a red flag for pension savers

Monarch Airlines was once one of the UK’s biggest holiday airlines, but ceased trading at the beginning of October

The collapse of Monarch is ‘a not-to-be-ignored red flag’ for people on the cusp of retirement. Monarch Airlines was once one of the UK’s biggest holiday airlines, but ceased trading at the beginning of October.

The high profile collapse of the airline company, together with the accusations of asset-stripping, leaves yet another pension fund in question. Indeed, its collapse should serve as a not-to-be-ignored red flag for people on the cusp of retirement.

It has been reported that the pension fund, which is in the government’s lifeboat rescue fund, the Pension Protection Fund (PPF), could have been left short when it went under back in 2014.

The PPF is an invaluable resource. But with UK final-salary pension schemes now having an alarming £1.6tn of liabilities and a £224bn deficit, and the problem only getting worse, it can be reasonably assumed that it is perhaps seriously feeling the squeeze. How many more high profile collapses could it sustain?

ALSO READ
Chaos in Catalonia is a wake-up call for global investors

The truth is despite rising equity markets and a global outlook looking relatively rosy, many firms are still battling to fund their pension schemes.

It is crucial for pension members to understand exactly what represents a risk to their pensions and how these can be mitigated.

In the same way people have their cars regularly serviced, it is now more important than ever that individuals seek independent advice on an annual basis to ensure that they are completely aware of their pensions and how much they should expect to receive in retirement.

Regularly reviewing and taking action on your financial planning strategy, where appropriate and possible to do so, will mean that you’re less likely to receive an unwelcome shock upon retirement.

Now is the time for savers to ensure that they are properly diversified to mitigate the increasing threats to their retirement funds.

Nigel Green is the founder and CEO of deVere Group

 

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.