Inflation to hit company pension schemes

The UK pensions industry has suffered a "significant" hit as a result of rising inflation, a spokesman for Aon Consulting has said.

Marcus Hurd, the firm’s head of corporate solutions, said as it had been predicted that the retail price index (RPI) would only rise to about three per cent, the pension funds industry would probably only have budgeted for a cost increase of approximately £15 billion.

Instead, the RPI has reached five per cent, meaning £25 billion in costs will have to be paid.

Mr Hurd remarked: "This additional significant financial burden comes at a time when most UK companies can least afford it."

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In other pensions news, Scottish Widows has found that women are not saving as much as men for their retirement.

The company conducted a survey that revealed only 46 per cent of females are investing enough money in their pensions, nine percentage points less than their male counterparts.