Pensions - Articles - Impact of inflation figures on pensions


Future inflation expectations could rise again as a result of another record high CPI announcement.

 With increases in long-term inflation assumptions adding £140bn to liabilities of UK DB schemes since England’s final Covid lockdown rules were removed on 19 July 2021, according to an analysis from XPS Pensions Group’s DB:UK Funding Watch.

 With inflation hitting heights of over 5% for 3 consecutive months, increases on pensions, which are typically capped at 5% pa, have started to lag behind price inflation, which will be felt by pension scheme members who continue to be squeezed by the rising cost of living.
 
 Tom Birkin, Actuarial Consultant, XPS Pensions Group, commented: “The impact of soaring inflation has been felt right across the pensions industry, with rising inflation expectations adding to schemes’ liabilities and creating challenges for Trustees as they work toward long-term funding targets. It’s not all bad news for pension schemes, however, as the Bank of England’s recently announced hike in interest rates will have had a positive impact on liabilities and will work to counteract inflationary pressures to some extent.”
  

Back to Index


Similar News to this Story

Launch of the new Pensions Commission
Standard Life, Aegon, Aviva, Legal and General and PMI comment on the launch of the new Pensions Commission
Retirement confidence dips for 50 somethings
New research from Aegon reveals that only 33% of Britons aged 50–59 feel confident about retiring comfortably, the lowest of any age group. This midli
Pension Commission must deliver bold reforms
Comments from Kirsty Anderson, retirement specialist at Quilter on the DWP’s plan to revive the Pension Commission, including auto-enrolment reform an

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.